Q1 2024 Xcel Energy Inc Earnings Call

Melissa: Hello, and welcome to Xcel Energy's first quarter 2024 earnings conference call. My name is Melissa, and I will be your coordinator for today's event. Please note this conference is being recorded, and for the duration of the call, your lines will be in a listen-only mode. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star 1 on your telephone keypad to register your question.

Hello, and welcome to XL energy first quarter 'twenty 'twenty four earnings Conference call. My name is Melissa and I will be your coordinator for today's event.

Melissa: Please note. This conference is being recorded and for the duration of the call. Your lines will be in a listen only mode. However, you will have the opportunity to ask questions at the end of the presentation that can be done by pressing star one on your telephone keypad to register your questions questions will only be taken from institutional investors reap.

Melissa: Questions will only be taken from institutional investors. Reporters can contact media relations with inquiries, and individual investors and others can reach out to investor relations. If you require assistance at any point, please press star zero, and you'll be connected to an operator. I'll now turn the call over to Paul Johnson, Vice President, Treasurer, and Investor Relations. Please go ahead.

Paul Johnson: Can contact media relations with inquiries and individual investors and others can reach out to Investor relations.

Melissa: If you require assistance at any point, please press star zero and you'll be connected to an operator I'll now turn the call over to Paul Johnson, Vice President Treasurer, and Investor Relations. Please go ahead.

Paul Johnson: Good morning, and welcome to Xcel Energy's 2024 First Quarter Earnings Call. Joining me today are Bob Frenzel, Chairman, President, Chief Executive Officer, and Brian Van Abel, Executive Vice President, Chief Financial Officer. In addition, we have other members of the management team in the room to answer your questions if needed.

Paul Johnson: Good morning, welcome to XL Energy's 2024 first quarter earnings call.

Paul Johnson: Joining me today are Bob Frenzel, Chairman, President and Chief Executive Officer.

Paul Johnson: Brian Van Abel Executive Vice President and Chief Financial Officer.

Paul Johnson: In addition, we have other members of the management team in the room to answer your questions if needed.

Paul Johnson: This morning we will review our 24 first quarter results and highlights, discuss recent wildfires and our mitigation efforts, and share recent business developments. Slides accompanying today's call are available on our website. Please note that we've changed our presentation. As a result, we no longer refer to the electric and natural gas margin. Instead, we will discuss changes in revenue and cost of goods sold from the income statement. Please note that most fluctuations in the cost of electric fuel and natural gas are recovered through regulatory mechanisms and are generally earnings.

Paul Johnson: This morning, we will review our 24, our first quarter results and highlights discuss recent wildfires and our mitigation efforts and share our recent business developments slides.

Paul Johnson: Slides accompanying today's call are available on our website.

Paul Johnson: Please note that we changed the presentation as a result, we no longer referred to electric and natural gas margin instead will discuss changes in revenue and cost of goods sold from the income statement.

Paul Johnson: Please note that these most fluctuations in cost of electric fuel and natural gas are recovered through regulatory mechanisms and are generally earnings neutral.

Paul Johnson: As a reminder, some of the comments during today's call may contain forward-looking information. Significant factors that could cause results different from those anticipated are described in the earnings release and SEC file. Today we'll discuss certain, gap, and non-gap certain measures that are non-gap measures information on the comparable gap measures and reconciliations are included or, With that, I'll turn it over to Bob.

Paul Johnson: As a reminder, some of the comments during today's call may contain forward looking information.

Paul Johnson: Factors that could cause results to differ from Goldman's anticipate are described in our earnings release and SEC filings.

Bob: Today, we'll discuss certain GAAP.

Paul Johnson: <unk> not get certain measures that are non-GAAP measures information on comparable GAAP measures and reconciliations are included in our earnings release with that I'll turn it over to Bob.

Robert C. Frenzel: Thank you, Paul, and good morning, and welcome, everyone. It's been two months since wildfires impacted our Texas neighbors, and before Brian walks through our financial results, I'd like to discuss the actions we're taking to protect the public. Strengthen our Systems Resiliency in the States that we serve. In February, multiple wildfires were ignited in Texas; from the outset of those fires, our focus has been on the people and the communities in the panhandle and on the safety and the well-being of our co-workers and their families there. I want to thank all the first responders, emergency personnel, state and local employees, and our own SPS employees who worked tirelessly.

Bob: Thank you Paul and good morning, and welcome everyone. It's Ben.

Robert C. Frenzel: Two months and wildfires.

Robert C. Frenzel: Wildfires impacted our Texas neighbors and before Brian.

Robert C. Frenzel: Walks through our financial results I'd like to discuss the actions, we're taking to protect the public.

Robert C. Frenzel: And our system's resiliency in the states that we serve.

Robert C. Frenzel: In February multiple multiple wildfires for our guys in Texas and from the outset of our suppliers. Our focus has been on the people and the communities in the Panhandle and on the safety and the wellbeing of our coworkers and their families. There.

Robert C. Frenzel: I want to thank all the first responders emergency personnel state local employees and our own MTS employees, who work tirelessly in support of our customers and our communities.

Robert C. Frenzel: Support for our customers and our communities during and after the event. They provided wildfire response, community assistance, relief services, and worked tirelessly in the field to restore essential services. I've been to the Panhandle, and I've witnessed the impacted areas, and I can speak for the entire Xcel Energy team when I say that we are saddened by the loss of. And we will stand with the Panhandle community as we recover, rebuild, and renew that area as we have for over 100 years.

Robert C. Frenzel: And after the event.

Robert C. Frenzel: They provided wildfire response community assistance relief services worked tirelessly and appeal to restore essential services.

Robert C. Frenzel: And in the Panhandle, I've witnessed the impacted areas and I can speak for the entire XL energy team when I say that we are saddened.

Robert C. Frenzel: By the losses.

Robert C. Frenzel: And we will stay on with the Panhandle community as we recover rebuild and renew that area as we have for over 100 years.

Robert C. Frenzel: Xcel Energy has acknowledged that our distribution poles appear to have been involved in the ignition of the Smokehouse Creek fire and the smaller Reaper fire, which quickly burned into the Smokehouse Creek fire. We assume claims that Xcel Energy acted negligently in maintaining and operating its business. In addition, we do not believe that our facilities caused the Whitty Deuce or the Grapevine Creek fires and believe that their emissions were caused by distribution lines owned by other companies.

Robert C. Frenzel: <unk> LNG has acknowledged that our distribution poles appeared I've been involved in an ignition of the smokehouse Creek fire than smaller rebuild fire, which quickly burned into the smokehouse Creek fire departments.

Robert C. Frenzel: We assume claim that ex LNG acted negligently and maintaining and operating its infrastructure.

Robert C. Frenzel: In addition, we do not believe that our facilities caused will reduce or with a great find creek fires I believe that their addictions are caused by distribution lines owned by other companies.

Robert C. Frenzel: In an effort to expedite relief and recovery in the community, we've established a claims process for those who have property or livestock lost in the Smokehouse Creek fire and are actively settling a number of claims. So far, 46 claims have been submitted.

Robert C. Frenzel: In an effort to expedite that relief and recovery in the community. We've established the claims process is for those who have property or livestock, what's in the smokehouse Creek buyers.

Robert C. Frenzel: And are actively selling a number of claims.

Robert C. Frenzel: So far 46 claims have been submitted.

Robert C. Frenzel: And as of April 22, Xcel Energy and SPS have been named as defendants in 15 lawsuits. Based on the most current information, we believe it's probable that we will incur a loss due to the Sloan Cops Creek wildfire and have accrued a liability of $215 million, which is offset by an insurance receivable since it's lower than our approximately $500 million. Please note that the $215 million loss is a preliminary estimate that reflects the low end of a range and is subject to change based on new information.

Robert C. Frenzel: And as of April 22nd XL energy and MTS have been named as defendants in 15 markets.

Robert C. Frenzel: Based on the most current information we believe it's probable that we incur a loss due to the Suncorp Street wildfire.

Robert C. Frenzel: And of crude a liability of $215 million, which is offset by an insurance receivable since it's lower than our approximately $500 million of insurance.

Robert C. Frenzel: Please note that the $215 million loss accrual the preliminary estimate which reflects the low end of our range and is subject to change.

Robert C. Frenzel: That new information.

Robert C. Frenzel: For more information on Smokehouse Creek, please see our disclosures in our earnings release and our Form 10-Q. Like all utilities, we're experiencing profound changes in weather and climate-related impacts on our operations. As a result, we must continue to evolve our operations to address these unparalleled dynamics. Risk mitigation and system resiliency have long been a priority for Xcel Energy and will continue into the future. Our strategy consists of three phases. First, an immediate near-term response.

Robert C. Frenzel: More information on Smokehouse Creek.

Robert C. Frenzel: See our disclosures in our earnings release, and our Form 10-Q.

Robert C. Frenzel: Like all utilities were experiencing profound changes in weather and climate related impacts on our operations.

Robert C. Frenzel: As a result, we must continue to evolve our operations for these unparalleled dynamics.

Robert C. Frenzel: Risk mitigation and system resiliency has long been a priority for XL energy will continue into the future.

Robert C. Frenzel: Our strategy consists of three phases first immediate near term response.

Robert C. Frenzel: Second, regulatory activities needed to address comprehensive wildfire mitigation and resiliency plans. Third, additional state and federal legislation that could be valuable. As part of our first phase, we've accelerated risk reduction initiatives across our system, including accelerating full inspections and replacements, as well as operational actions such as proactive de-energizing of lines and adjusting recloser settings known as power safety power shutoffs and enhanced power line safety settings. We have been operating under an approved wildfire plan in Colorado since 2020.

Robert C. Frenzel: Regulatory activities needed to address comprehensive wildfire mitigation and resiliency plans third additional state and federal legislation that could be valuable.

Robert C. Frenzel: Part of our first phase, we've accelerated risk reduction initiatives across our system, including accelerating all expecting some replacements as well as operational actions such as proactive de energizing aligned and adjusting re closer settings.

Robert C. Frenzel: Power safety power shut offs and enhanced power lines safety settings.

Robert C. Frenzel: Well, we've been operating under an approved wildfire plant in Colorado since 2020.

Robert C. Frenzel: As part of our second phase strategy, we will file updated wildfire mitigation plans in our respective states, beginning with an updated Colorado WFP later this quarter. The plans incorporate industry learnings that are tailored to our unique geographies and risk profiles. Newly expanded actions include increased vegetation management, Xcelerated Polar Inspections, Hardening, and Replacement, Distribution, Undergrounding, Segmentation, and Covered Conductor Program, Transition Line Hardening and or

Robert C. Frenzel: As part of our second base strategy, we will file updated wildfire mitigation plans in our respective states beginning with an updated Colorado Wip later this quarter.

Robert C. Frenzel: The plans incorporate industry learning better tailored to our unique geographies and risk profiles.

Robert C. Frenzel: Newly expanded actions, including increased vegetation management.

Robert C. Frenzel: Accelerated pole inspections hardening and replacements.

Robert C. Frenzel: Distribution under grounding segmentation and covered conductor program.

Robert C. Frenzel: Transmission line hardening and or rebuilds.

Robert C. Frenzel: Enhanced recloser settings and proactive de-energizing of lines and situational awareness programs, including weather stations, cameras, and other monitoring software. Later this year, we intend to file a system resiliency plan that will include wildfire mitigation and SPS contemplated under recent Texas law. And the third component of our strategy is to continue to step up our efforts to innovate and plan for evolving climate and wildfire risk. We know that our ability to enable a clean energy transition and to deliver an affordable product to our customers is predicated on maintaining a reasonable cost of capital, and we believe that proactive legislation at the state and federal levels is a potential vehicle to ensure that our customers continue to receive affordable, reliable, sustainable, and safe power services. We are doing this alone.

Robert C. Frenzel: Enhanced re closers settings, and proactive de energizing, the wines and situational awareness programs, including weather stations cameras and other monitoring software.

Robert C. Frenzel: Later this year, we intend to file a system resiliency plan that will include wildfire mitigation at Sps as contemplated under recent Texas law.

Robert C. Frenzel: And the third part of our strategy to continue to step up our efforts to innovate and plan for evolving climate wildfire risks.

Robert C. Frenzel: We know that our ability to enable and clean energy transition and to deliver important product to our customers is predicated on maintaining a reasonable cost of capital and we believe that proactive legislation at the state and federal level as a potential vehicle to ensure that our customers continue to receive affordable reliable sustainable and safe power surge.

Robert C. Frenzel: Yes.

Robert C. Frenzel: We're working across the industry with pure utilities, industry groups such as EEI and EPRI, the Department of Energy, federal, state, and global agencies, first responders, our labor partners, and countless others. While we need to reduce wildfire risk, our core operations remain strong, and our investment opportunities robust. During the first quarter, we made significant progress on our clean energy transition and resources. In February, we filed our resource plan for the NSP system. We propose to add 6,400 megawatts of new resources and extend the lives of our Prairie Island and Monticello nuclear facilities past 2050. The proposed plan reduces carbon emissions by more than 80% while increasing customer bills by approximately 1% annually.

Robert C. Frenzel: We are doing this alone we're working across the industry with peer utilities.

Robert C. Frenzel: Industry groups, such as <unk> and <unk>.

Robert C. Frenzel: Energy Federal state local agencies first responders are labor partners and countless others.

Robert C. Frenzel: While we need to reduce wildfire risk our core operations remained strong.

Robert C. Frenzel: In our investment opportunities robust.

Robert C. Frenzel: During the first quarter, we made significant progress on our clean energy transition and resource plans.

Robert C. Frenzel: In February file our resource plan for the NSP system.

Robert C. Frenzel: We propose to add 6400 megawatts of new resources and extend the lives of our Prairie Island, and Monticello nuclear facility past 2015.

Robert C. Frenzel: So the competitive flame reduces carbon emissions by more than 80%, while increasing customer bills by approximately 1% annually.

Robert C. Frenzel: We anticipate decisions on our proposal by the Minnesota Commission in 2025. In New Mexico, the Commission accepted our resource plan when it proposed approximately 5 to 10,000 megawatts of new generation by 2030. We anticipate issuing an RFP for these resource needs this summer.

Robert C. Frenzel: We anticipate a decision on our proposal by the Minnesota Commission in 2025.

Robert C. Frenzel: In the Mexico. The Commission accepted our resource plan, we proposed approximately 5% to 10000 megawatts of new generation by 2030.

Robert C. Frenzel: We anticipate issuing an RFP for these resources this summer.

Robert C. Frenzel: And finally, the Minnesota Commission recently approved our updated transportation electrification plan, and we filed an updated transportation electrification plan in New Mexico in April. We've also made continued progress with several economic and commercial development projects. In February, we announced we're working with Microsoft to bring a new data center to our retiring Sherco coal facility, and its position to be one of our largest customers in Minnesota and is projected to bring jobs and investments to the community. Mark Mehta broke ground on its previously announced data center that will be powered by NSP Minnesota.

Robert C. Frenzel: And finally, the Minnesota Commission recently approved our updated transportation electrification plan.

Robert C. Frenzel: The updated transportation.

Robert C. Frenzel: Electrification plan in new Mexico in April.

Robert C. Frenzel: We've also made continued progress with several economic and commercial development projects in February we announced we're working with Microsoft to bring a new data center to a retiring sugarcoat coal facility.

Robert C. Frenzel: The proposed data set is positioned to be one of our largest customers in Minnesota and is projected to bring jobs and investment to the community.

Robert C. Frenzel: The March data broke ground on its previously announced data center that will be powered by NSP, Minnesota.

Robert C. Frenzel: META will provide funding for new infrastructure upgrades, including transmission lines, to support the project, and the facility is slated to open in late summer 2025, and Xcel Energy will proactively work with data center developers, communities, and stakeholders across our state to ensure that we can reliably and affordably serve this new demand, while providing benefits to our other customers. Several additional opportunities in the pipeline, we expect data settings to drive further growth for the foreseeable future.

Robert C. Frenzel: Matt will provide funding for new infrastructure upgrades, including transmission lines to support the project.

Robert C. Frenzel: The facility is slated to open in late summer 2025.

Robert C. Frenzel: So I have to proactively work with data center developer community stakeholders across our states to ensure that we can reliably and affordably served as new demand.

Robert C. Frenzel: While providing benefits.

Robert C. Frenzel: To our other customers.

Robert C. Frenzel: With several additional opportunities in the pipeline, we expect data center to drive further growth for the foreseeable future.

Robert C. Frenzel: Our employees are at the heart of these many accomplishments. Our team is composed of dedicated, hardworking, and courageous employees who are committed to serving our communities with safe, clean, reliable, and affordable energy. For the 11th year in a row, Xcel Energy was honored as one of the world's most admired companies by Fortune magazine, placing second overall amongst the most admired gas and electric companies in the country. And for the fifth year in a row, Xcel Energy has been named one of the world's most ethical companies by Episcope.

Robert C. Frenzel: Our employees are at the heart of these many accomplishments.

Robert C. Frenzel: Our team is composed of dedicated and hardworking and courageous employees are committed to serving our communities.

Robert C. Frenzel: Safe clean reliable and affordable energy.

Robert C. Frenzel: For the 11th year in a row external energy was honored as one of the world's most admired companies by Fortune magazine.

Robert C. Frenzel: Placing second overall once the most admired gas electric fleets in the country.

Robert C. Frenzel: And for the <unk>, but maybe one of the world's most ethical companies by Ethisphere.

Robert C. Frenzel: Xcel Energy is one of only five energy companies in the United States recognized this year. Xcel Energy also joined the Economic Opportunity Coalition, a public-private partnership with the US government, where we committed to allocating 15% of our US-based contract spending in the areas of energy supply, distribution, transmission, and clean energy to small and underserved businesses by 2025. With that, I'll turn it over to Brian.

Robert C. Frenzel: Exercising one of only five energy companies in United States recognize this year.

Robert C. Frenzel: Accelerating also joined the economic opportunity coalition, a public private partnership with the U S government, where we committed to allocating 15% of our U S based contract spending in the areas of energy supply and distribution transmission and clean energy small and other sort of businesses by 2025.

Brian J. Van Abel: Thanks, Bob. Good morning, everyone.

Robert C. Frenzel: With that I'll turn it over to Brian.

Brian: Thanks, Bob and good morning, everyone.

Brian J. Van Abel: Turning to our financial results, Xcel Energy had earnings of $0.88 per share for the first quarter of 2024, compared to 76 cents per share in 2023. The increase in earnings reflects our investment of approximately $8 billion over the last five quarters to improve resiliency and enable clean energy for our customers while delivering economic growth and vitality for our community. The most significant earnings drivers for the quarter included the following.

Brian: Turning to our financial results Excel energy had earnings of 88 per share for the first quarter of 2024.

Brian J. Van Abel: Compared to 76 per share in 2023.

Brian J. Van Abel: The increase in earnings reflects our investment of approximately $8 billion over the last five quarters to improve resiliency and enable clean energy for our customers, while delivering economic growth and vitality for our communities.

Brian J. Van Abel: The most significant earnings drivers for the quarter included the following.

Brian J. Van Abel: The impact of the electric and natural gas rates reduced to recover our capital investments increased earnings by 12 cents per share. Lower O&M expenses increased earnings by six cents per share, reflecting lower labor and benefit costs. Lower bad debt expenses and gains from a land sale for a data center. Non-fuel riders recover capital investment increased earnings by five cents per share. Offsetting these positive drivers were tired appreciation and amortization decreased earnings by five cents per share, reflecting our capital investment program. Higher interest charges decrease earnings by five cents per share. In addition, other items combined to decrease earnings by one cent per share.

Brian J. Van Abel: The impact of electric and natural gas rate reviews to recover our capital investments increased earnings by <unk> <unk> per share.

Brian J. Van Abel: Lower O&M expenses increased earnings by <unk> <unk> per share.

Brian J. Van Abel: Second lower labor and benefit costs lower.

Brian J. Van Abel: Lower bad debt expenses and gains for a land sale of our data center.

Brian J. Van Abel: Non fuel riders to recover capital investment group's earnings by <unk>.

Brian J. Van Abel: Offsetting these positive drivers were higher depreciation and amortization decreased earnings by <unk> <unk> per share, reflecting our capital investment programs.

Brian J. Van Abel: Higher interest charges decreased earnings by <unk> <unk> per share.

Brian J. Van Abel: Yes.

Brian J. Van Abel: Other items combined to decrease earnings by one side for sure.

Speaker Change: Turning to sales.

Brian J. Van Abel: Year to date weather and leap year adjusted electric sales decreased five 3%.

Brian J. Van Abel: [inaudible] Year-to-date weather and leap year adjusted electric sales decreased by 0.3%, and natural gas sales increased by 1.7% as compared to 2023. Please note that we revised our projected electric sales growth to 1-2% for the year, largely due to declining use per customer and timing delays for expansions for some of our large C&I customers.

Brian J. Van Abel: Natural gas sales increased by one 7% as compared to 2043.

Brian J. Van Abel: Please note that we have revised our projected electric sales growth of 1% to 2% for the year.

Brian J. Van Abel: Largely due to the declining use per customer.

Brian J. Van Abel: Timing delays for expansions for some of our large C&I customers.

Brian J. Van Abel: However, we can certainly expect long term electric sales growth 3% annually.

Brian J. Van Abel: However, we can certainly expect long-term electric sales to grow 3% annually. During the quarter, we also made progress on the relatively light-weight Xcel Energy. In April, the Texas Commission approved our electric brick heat settlement without modification.

Brian J. Van Abel: During the quarter. We also made progress on a relatively light rate case calendar.

Brian J. Van Abel: In April the Texas Commission approved our electric rate case settlement without modification.

Brian J. Van Abel: So that reflects a rate increase of $65 million based on a black box settlement, which includes a are we at nine 5% and an equity ratio of 54, 5% range you can see purposes.

Brian J. Van Abel: In our Minnesota natural gas rate case.

Brian J. Van Abel: The settlement reflects a rate increase of $65 million based on a Black Fox settlement, which includes a ROE of 9.55% and an equity ratio of 54.5% for AWC folks in our Minnesota-Nashville gas rate case. We received an interview here at Capstone last week, hearings are scheduled for July, and we expect a commission decision by year end or in the first quarter of next year. And in our Colorado natural gas rate case, a procedural schedule has been established that reflects interviewer testimony in July, hearings in September, and a commission decision in the fourth quarter.

Brian J. Van Abel: We received intervenor testimony last week.

Brian J. Van Abel: Hearings are scheduled for July and expect a commission decision by year end or in the first quarter of next year.

Brian J. Van Abel: And in our Colorado natural gas rate case procedural schedule has been established that reflects intervenor testimony in July hearings in September and a commission decision in the fourth quarter.

Brian J. Van Abel: Please see our earnings release for more details on our regulatory proceedings.

Brian J. Van Abel: We are reaffirming our 2020 core earnings guidance range of $3 50 to.

Brian J. Van Abel: The $3 60 per share, which is consistent with our long term EPS growth objective of five 7%.

Brian J. Van Abel: In addition, we've updated our key assumptions to reflect the latest information which are detailed in the earnings release.

Brian J. Van Abel: Please see our article for more details on our regulatory procedures. We are reaffirming our 2024 earnings guidance range of $3.50 to $3.60 per share, which is consistent with our long-term EPS growth objective of 5-7%. In addition, we've updated our key assumptions to reflect the latest information, which are detailed in our original email. With that, I'll wrap up with a quick summary.

Brian J. Van Abel: With that I'll wrap up with a great summary.

Brian J. Van Abel: We are proactively enhancing our operational and wildfire mitigation actions to manage the risk tort system to protect our customers from extreme weather.

Brian J. Van Abel: We continue to expect to deliver 2020 of our earnings within our guidance range of the Tam for the past 19 years.

Brian J. Van Abel: We are executing on our capital investment plan, including clean generation transmission and distribution to support reliability and resiliency and economic development to support our communities.

Brian J. Van Abel: And we remain confident we can deliver long term earnings growth at or above the top end of our 5% to 7% range starting in 2025 Disney grow at the low end of our five 7% objective range.

Brian J. Van Abel: We are proactively enhancing our operational and wildfire mitigation actions to manage the risks to our systems and protect our customers from extreme weather. We continue to expect to deliver 2024 earnings within our guidance range, as we have for the past 19 years. We are executing on our capital investment plan, including clean generation, transmission, and distribution to support reliability and resiliency, and economic development to support our community. And we remain confident we can deliver long-term earnings growth at or above the top end of our 5% to 7% range starting in 2025, and dividend growth at the low end of our 5% to 7% objective range. This concludes our prepared remarks. The operator will now take questions.

Brian J. Van Abel: This concludes our prepared remarks, operator, we will now take questions.

Speaker Change: Thank you.

Brian J. Van Abel: Linda if he would like to ask a question. Please press star one on your telephone keypad to withdraw your question for any reason you May press star two.

Brian J. Van Abel: You will be advised when to ask your question.

Brian J. Van Abel: Our first question is from Nick Campanella with Barclays. Please go ahead.

Speaker Change: Hey, Thanks for all the information today.

Speaker Change: If I could maybe a couple of questions. Yes. Thank you. Thank you.

Speaker Change: I guess, a couple of questions to kick it off.

Brian J. Van Abel: You have a lot of resource plan activity going on across Sps and the rfps seen seem like Theyre coming out this summer.

Brian J. Van Abel: How are you kind of thinking about competition for capital within the current Capex plan now that you are seemingly.

Melissa: Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. To withdraw your question for any reason, you may press star two. You will be advised when to ask your question. Our first question is from Nick Campanella with Barclays. Please go ahead.

Nicholas Campanella: Accelerating some resiliency plan that Sps and <unk>.

Nicholas Campanella: Maybe you can kind of remind us what's incremental versus not and then.

Nicholas Campanella: Also just touch on your financing plan and equity needs. Thanks.

Nicholas Campanella: Yes, certainly and making good morning.

Nicholas Campanella: Hey, thanks for all the information today. I've got maybe a couple... Yeah, thank you. Thank you. I guess a couple questions to kick it off. You know, you have a lot of resource plan activity going on across SPS, and the RFPs, you know, seem like they're coming out this summer. Just how are you kind of thinking about competition for capital within the current

Nicholas Campanella: I will touch upon all the multiple parts of that question just a feel.

Speaker Change: Feel free to follow up.

Speaker Change: Absolutely, we're pretty excited about the upcoming RFP in Sps, we've talked about before seeking a range of generation between 5000 10000 megawatts of.

Nicholas Campanella: Combination of our renewables and dispatch volt firming capacity.

Brian J. Van Abel: Yeah, certainly Nick, and good morning. You know, if I don't touch on all the multiple parts of that question, just please feel free to follow up. Absolutely, we're pretty excited about the upcoming RFP and SPS. You know, we've talked about it before, seeking a range of generation between 5,000 and 10,000 megawatts of a combination of renewables and dispatchable capacity, and we'll look to launch that RFP in July. So, that's how I think about that capital, but a really great opportunity; excited to get started on that.

Speaker Change: And we will look to launch that RFP in July.

Nick: It's a little bit of a longer timeline. So help me understand in terms of how we'll walk that July we would expect to file <unk> in the summer of 2020 by summer of next year.

Brian J. Van Abel: Decisions in Q1 of 2006, so that capital it really will be kind of in the 27 to 2030 type spend timeframe by adding water to elongate and adding to that some of the back end of our five year body long gating our growth opportunities beyond the five year, what we're seeing there.

Brian J. Van Abel: So that's how I think about our capital.

Brian J. Van Abel: Really great opportunity excited to get started on that.

Brian J. Van Abel: You touched a little bit on, you know, absolutely we're looking to continue to invest in resiliency and risk mitigation. Just a reminder, we have about $10 billion in our current CapEx plan around distribution and transition resiliency, but as we look to file our Colorado WMP here later in this Q2, there will certainly be incremental investment needs related to reducing overall wildfire risk.

Brian J. Van Abel: You talked a little bit on Youll, absolutely, we're looking to continue to invest in resiliency and risk mitigation spend.

Brian J. Van Abel: Just wanted to note, we have about $10 billion and our current Capex plan.

Brian J. Van Abel: Distribution and transmission resiliency.

Brian J. Van Abel: But as we look to file a Colorado <unk> here later in the SKU.

Brian J. Van Abel: Tubular sotheby's incremental investment needs related to reducing overall wildfire risks. So we will evaluate all of that within our kind of occurrence.

Brian J. Van Abel: So, we'll evaluate all of that within our kind of current, normal cadence when we come back in October of this year to provide a kind of roll forward for a 25 to 29 plan. And, you know, I think about competition for capital. You know, I think as we sit here today, we're, you know, very comfortable, comfortable with, you know, I reiterated, no, we'll be at or above the five, the top end of the five to 7% range.

Brian J. Van Abel: No full cadence when we come back in October of this year to provide a kind of roll forward for a 25% to $49 plan and.

Brian J. Van Abel: While competition for capital.

Brian J. Van Abel: We sit here today we're.

Brian J. Van Abel: Very comfortable comfortable with.

Brian J. Van Abel: I reiterated nor will be at or above the 5% top end of the 5% to 7% range I think I was looking at all the opportunities we have in front of us.

Brian J. Van Abel: I think that's looking at all the opportunities we have in front of us with rate-based self-opportunities above 9%, and we will let the finance do that as we always have been. So I think it's important to maintain a strong balance sheet and important to keep that going forward. And so we'll look at it, you know, financing incremental growth with creative equity at that kind of 64%. So hopefully, I've touched on everything you're asking about. Nick, I'll just add one thing to Brian's comments.

Brian J. Van Abel: Rate based growth opportunities above 9% and what was the finance that as we always have that well I think it's important to maintain a strong balance sheet.

Brian J. Van Abel: Important to keep that going forward and so we will look at it.

Brian J. Van Abel: Financing incremental growth with accretive equity at that kind of 60, 40% range.

Speaker Change: So always open to everything you're asking about and Nick I'll just add on one thing at a variety of comments I think you asked about sort of.

Robert C. Frenzel: I think you asked about sort of the relative competitiveness of the company. We would expect to offer in, you know, our own development projects into the SPS proposal. And we've proven that we, with our scale and utility-owned wind and our growing expertise in solar and storage, we think we'd be very competitive for some of the generation in the South. Public Service RFP process.

Robert C. Frenzel: Relative competitiveness of the company, we would expect to offer in our own development projects into the Sps proposal and we've proven that we.

Robert C. Frenzel: With our scale and utility owned wind at our growing expertise in solar and storage, we think will be very competitive for some of the generation of southwestern public service RFP process.

Nicholas Campanella: Got it. That's really helpful. And then I guess just, and you hit all the points. To put a finer point on the equity needs, I guess, do you just see really kind of no change to current plans, even with the multiple a little bit lower here? Thank you.

Nicholas Campanella: Got it that's really helpful and then I guess just.

Nicholas Campanella: And you did hit all the points.

Nicholas Campanella: To put a finer point on the equity needs I guess do you see really kind of no change to current plans, even with multiple a little bit a little bit lower here. Thank you.

Brian J. Van Abel: Yeah, so the way we think about it, obviously, like I said, and reiterated where we expect to be within the growth range. And that takes into account our lower multifold impacts over the past quarter.

Speaker Change: Yes, so the way we think about obviously like I said and reiterated where we expect to be within that growth range.

Brian J. Van Abel: And that takes into account our lower multiple of impacts over the past quarter, certainly as I mentioned and we think about there is significant investment opportunities going forward.

Brian J. Van Abel: Certainly, you know, we, as I mentioned, think about there are significant investment opportunities going forward. And it's important to have a strong balance sheet; we plan to maintain that strong balance sheet. But obviously, we'll look at what that strong balance sheet gives us some time and flexibility from an equity issuance perspective, and obviously, we'll evaluate that. And obviously, we'll evaluate whether there is some potential time and flexibility around capital in the near term.

Brian J. Van Abel: And as important had a strong balance sheet, we plan to maintain that strong balance sheet, but obviously you all look out what does that strong balance sheet gives us some timing flexibility from an equity issuance perspective, and obviously, we will evaluate that and obviously, we'll evaluate whether there is potential timing flexibility around capital in the near term, but I think overall as <unk>.

Brian J. Van Abel: We think fundamentally everything is intact from a long term perspective in terms of maintaining a strong balance sheet and funding.

Brian J. Van Abel: But I think overall, as we think fundamentally, everything's intact from a long-term perspective in terms of maintaining the strong balance sheet and funding the investment needs for the clean energy transition with equity as we need to maintain that balance.

Brian J. Van Abel: The investment needs of the clean energy transition with equity as we need to maintain that balance sheet.

Speaker Change: Thanks, a lot really appreciate the time.

Brian J. Van Abel: Yes.

Brian J. Van Abel: Thank you. Our next question is from Steve Fleishman with Wolfe Research. Please go ahead.

Nicholas Campanella: Thanks a lot. I really appreciate the time.

Steven Isaac Fleishman: Thank you. The next question is from Steve Fleishman with Wolf Research.

Speaker Change: Hi, good morning, Thank you.

Steven Isaac Fleishman: Hi, good morning. Thank you.

Steven Isaac Fleishman: So just on the.

Robert C. Frenzel: So just on the Texas Fire, you mentioned the legislative report coming out in May. Just what should we expect to be coming out, and that is that who caused it? Or not? How should we think about what's going to come out in that report? What will likely focus on? Good morning. Look, you know, at a macro level, I was pretty encouraged by the process we went through with the Texas House and the committee. You know, I think one of the tenets of good risk mitigation is involving all the stakeholders who have a hand in doing that. And I think the committee hearings are a pretty good example of getting all or mostly all of.

Steven Isaac Fleishman: Ed.

Steven Isaac Fleishman: Texas Fire you mentioned the Legislative report coming out and it may just what should we expect to be coming out and that is that.

Robert C. Frenzel: Is that.

Robert C. Frenzel: Caused it or what how should we think about what's going to come out in that report.

Robert C. Frenzel: Quickly.

Speaker Change: Thank you Bobby and good morning.

Robert C. Frenzel: Look at the macro level allowance I was pretty encouraged by the process. We went through with the Texas House in the committee.

Robert C. Frenzel: One of the tenants of good risk mitigation is involving all the stakeholders, who have a hand in doing that and I think the committee hearings were.

Robert C. Frenzel: Pretty good example of getting all mostly all of the interested parties and participants in our room are proactively talking about the issues and on balance.

Robert C. Frenzel: You know, I think the sessions were productive. I feel the committee was looking to be prospective and gathering information for future solutions, and I think that's how I'd expect the report in May to come out. You know, I think we'll see stuff on recommendations for utilities, emergency responders, proactive things we can be doing in the counties to mitigate fire risk. You know, I think there's already a Texas A&M Forest Service report on cause.

Robert C. Frenzel: I think the sessions were productive field.

Robert C. Frenzel: The committee was looking to be prospective and gathering information about our future solutions and I think that's how I would expect to report in may to come out.

Robert C. Frenzel: I think we will see stuff on recommendations for utilities emergency responders proactive and we can be doing the counties that to mitigate fire risk.

Robert C. Frenzel: I think theres already.

Robert C. Frenzel: Texas A&M for service report on causation I'm not certain we will see something else from the committee on that.

Robert C. Frenzel: I'm not certain we'll see anything else from the committee on that, but look, I think the report's going to be... in line with the sessions themselves with, you know, constructive recommendations for how to proceed going forward.

Robert C. Frenzel: Well look I think the report is going to be.

Robert C. Frenzel: In line with the sessions themselves.

Robert C. Frenzel: With constructive recommendations for how to proceed going forward.

Robert C. Frenzel: Okay.

Brian J. Van Abel: Okay, and then just on the damage estimate that you took, because you've noted, I think, in your release a lot of kind of what's in there, what's not in there. One clarification is, how about not punitive damages but non-economic?

Robert C. Frenzel: And then.

Robert C. Frenzel: Just on the on.

Brian J. Van Abel: The damage estimate that you took as you've noted I think in your release a lot of kind of what's in there what's not in there.

Brian J. Van Abel: One clarification, just as how about.

Brian J. Van Abel: Not punitive damages, but non economic damages.

Brian J. Van Abel: Yeah, Steve, I'll handle this one. And I'll give you, you know, first. Obviously, we'll point to our disclosures. But I'll give you a little bit more color in terms of, you know, that $250 million or $215 million at the lower end. Yeah, that would be great. And here's the, here's the big, some of the big pockets. Residential properties in the later losses, cattle and feed, agricultural structures and fencing, non-economic damages, and then a number of other items. So obviously, this is subject to change as we gain additional information since we're still early.

Brian J. Van Abel: Is that in your estimate or not in your estimate.

Speaker Change: Yes, Steve I'll handle this one Ed I'll give you a case for US obviously, we will point to our disclosures, but I'll give you a little bit more color in terms of.

Brian J. Van Abel: That 250 $215 million in the lower end that would be great.

Brian J. Van Abel: The large some of the larger pockets it includes.

Brian J. Van Abel: Residential properties and related losses.

Brian J. Van Abel: <unk> feed agricultural structures advancing non economic damages and there are a number of other items. So obviously this is subject to change as again additional information since we're still early in the process.

Steven Isaac Fleishman: That's helpful. Thank you.

Steve: That's helpful. Thank you.

Steven Isaac Fleishman: And then, just on a follow-up on the question about equity. Just given some of the overhang that's been caused by this, how are you... Are you kind of revisiting other options of getting equity than just issuing it? Are there, you know, asset sales or other things that you might consider? Or is that just not as attractive as just funding with equity?

Speaker Change: And then.

Steven Isaac Fleishman: Just on a follow up on the question about equity.

Steven Isaac Fleishman: Just given some of the overhang that's been caused by this how are you.

Steven Isaac Fleishman: Are you re kind of revisiting like other options of getting equity than just issuing it are there.

Steven Isaac Fleishman: Asset sales or other things that you might consider or is that just not.

Steven Isaac Fleishman: You know not as attractive.

Steven Isaac Fleishman: Attractive is just.

Brian J. Van Abel: You know, obviously, it's something you'd expect Bob and I to evaluate in the normal course, you know, what other options are there. I think we've been, what we've seen from us is that we were a pretty straightforward conservative financing plan from a company perspective. So I don't, I think right now that's our current plan of action. And I think I've been on record about not only being interested in minority interest sales and the like. So that's our current plan of action as we sit here today.

Steven Isaac Fleishman: I was just funded with equity.

Steven Isaac Fleishman: Yes.

Brian J. Van Abel: You would expect.

Brian J. Van Abel: Bob <unk> Evaluable weights.

Brian J. Van Abel: Under normal course, what other options are there I think we've been you've already seen from US is that we were a pretty straightforward.

Brian J. Van Abel: Conservative financing plan from a coffee perspective.

Brian J. Van Abel: I think right now Thats, our current plan of action.

Brian J. Van Abel: I think I've been on record about not all that interested in minority interest sale of it in the light that biomass right as we sit here today.

Steven Isaac Fleishman: Okay, and then last thing on data center growth. So just on the facility at the old Sherco site, how was that? How is that being served? And then just, Bob, you mentioned talking to a lot of others. Could you just talk to them about how they're viewing your territory and just making sure you're able to kind of do this in a way that is kind of good for the broader customer base? Yeah, no, that's a great question.

Brian J. Van Abel: Okay, and then last thing on the data center.

Steven Isaac Fleishman: So just on the on the facility at the old Charcot side, how is that.

Steven Isaac Fleishman: How is that being served and then just Bob you mentioned talking to a lot of others could you just talk to.

Steven Isaac Fleishman: How they're viewing your territory.

Steven Isaac Fleishman: And just making sure you're able to kind of do this in a way that is good for the broader customer base.

Robert C. Frenzel: Yeah, that's a great question and conversation, Steve, and it's very topical both inside the walls of the building as well as around the industry. On your specific questions with regard to the Circo site, you know, the site gets powered by grid energy, and as you know, we're the first company to commit to being 100% carbon-free electricity.

Bob: Yes, great question and in conversation, Steve and it's very topical both inside the walls of the building as well as around the industry.

Robert C. Frenzel: On your specific questions with regard to the circus site the site.

Robert C. Frenzel: Great.

Robert C. Frenzel: <unk> energy.

Robert C. Frenzel: And as you know, we're the first company to commit to being 100% carbon free electricity.

Robert C. Frenzel: So, we already have a significant importance in renewable energy on the system, and, you know, they'll benefit from all our system actions. More broadly, as we look across our footprint as a company, we think, depending on the operating company, we have really attractive dynamics for super scalers and other data center and high energy use customers. And whether it's, you know, very low cost C&I energy in the southwest or benign weather and higher renewables in Colorado or a similar footprint here in the upper Midwest, you know, I think that we're having conversations across our footprint.

Robert C. Frenzel: So we already have a significant.

Robert C. Frenzel: The importance of the renewable of our system.

Robert C. Frenzel: And that will benefit from all of our system actions.

Robert C. Frenzel: More broadly as we look across our footprint as a company.

Robert C. Frenzel: Depending on the operating company, we have really attractive dynamics for.

Robert C. Frenzel: Four Super scalar is another data center and high energy use customers and whether it's.

Robert C. Frenzel: Very low cost C&I energy in the southwest or weather and higher renewables in Colorado or similar footprint here in the upper Midwest I think that we're having conversations across our footprint and I think we've got.

Robert C. Frenzel: And I think we've got both access to water transmission infrastructure, land, and energy, and clean energy that they find attractive. So we've got a significant amount of interest from super scalers and others and look forward to sharing more of that as we develop our forecast. Yeah, thanks Steve. That's what it is.

Robert C. Frenzel: Both access to water transmission infrastructure.

Robert C. Frenzel: Land and energy and clean energy that they find attractive. So we've got a significant amount of interest from super scalar than others and look forward to sharing more of that as we develop our forecast.

Brian J. Van Abel: Just to add a little bit of color to that, because I think you kind of hinted at how we think about it from a current customer perspective. You know, I think, as we bring on new data centers, and this is something we did with META and the approval of META in Minnesota, we made sure it's a win-win for our existing customers. That's really important as we continue to move forward with this significant opportunity.

Robert C. Frenzel: Yes.

Speaker Change: Steve I just wanted to.

Brian J. Van Abel: Just add a little bit of color to that I think you've kind of hinted at how do we think about it from a from a current customer perspective.

Brian J. Van Abel: I think now as we bring on new data centers and this is something we did with meta and approval of matter admin accelerates. We made sure. It's a win win for our existing customers. That's really important as we continue to move forward with this significant opportunity and I think there's opportunity there to work with our policymakers and regulators to help drive.

Brian J. Van Abel: And I think there's an opportunity there to work with our policymakers and regulators to help drive that economic development within the right context and also ensure that we can move quickly, because you will need to build on infrastructure, both on the generation side and the wider side to ensure that we can serve some of these significant opportunities that we're seeing over the next 5 to 10 years.

Brian J. Van Abel: Economic development within the right context, but also ensuring that we can move quickly because you will need to build out infrastructure. Both on the generation side in the wire side to ensure that we can serve some of these significant opportunities that we're seeing over the next 510 years.

Jeremy Bryan Tonet: Thank you. Our next question is from Jeremy Tonet of J.P. Morgan. Please go ahead.

Speaker Change: Great. Thank you.

Jeremy Bryan Tonet: Thank you our next question from Jeremy Tonet JP Morgan. Please go ahead.

Jeremy Bryan Tonet: All right, thanks. Just want to continue with the data center question with one more finer point here, I guess, as it relates to SPS. You know, given the need for power and given the very cheap natural gas in that area, wouldn't necessarily think of SPS as a place that data centers would target, but just wondering if what you're seeing there is cheap power is a draw or just any thoughts in general.

Jeremy Bryan Tonet: Hi, good morning.

Jeremy Bryan Tonet: Hey, Jerry.

Speaker Change: Alright. Thanks.

Jeremy Bryan Tonet: Just wanted to continue with the data center question with one more finer point here I guess as it relates to Sps you know just given the need for power and given the very cheap natural gas in that area.

Jeremy Bryan Tonet: Don't wouldn't necessarily think of Sps is a place that way.

Jeremy Bryan Tonet: Data centers with target, but just wondering if what you're seeing there if cheap power is a draw just any thoughts in general.

Brian J. Van Abel: Yeah, and Jeremy, I think, as Bob mentioned, we're seeing data center interest across all of our service territories, and Eastern Service Territories have maybe a little different point of attractiveness. And then you hit it at SPS has one of the lowest C&I rates in the country. So, there is interest there.

Speaker Change: Hey, Jeremy.

Brian J. Van Abel: As Bob mentioned, we're seeing data center interest across all of our service territories and eastern servicer preferred debit maybe a little different.

Brian J. Van Abel: Retracted Miss and then you had hinted at Sps as one of the lowest C&I rates in the country.

Brian J. Van Abel: But I would say the other significant growth that we continue to see in SPS, and this is really what you're seeing come through our numbers now when you look at, you know, the year-on-year growth from the C&I perspective, is the oil and gas expansion in the Permian Basin there, and everything to do in terms of electrification. So, right now, that's the near-term growth in SPS with longer-term data center opportunities, and we're discussing this with some data centers down there.

Brian J. Van Abel: Interest there, but I would say the other significant growth that we continue to see an Sps and this is really what youre seeing come through our numbers now when you look at the year over year growth from the C&I perspective, as the oil and gas.

Brian J. Van Abel: Expansion in the Permian basin, there and averaging they're doing from electrification perspective, so right now thats the near term growth.

Brian J. Van Abel: And <unk>.

Brian J. Van Abel: <unk> with longer term data set of opportunity we're discussing with some data centers down there. We also had a fantastic renewable resources down there from our wind and solar perspective.

Brian J. Van Abel: We also have fantastic renewable resources down there, from a wind and solar perspective, and a little bit leads to that. When we talk about that RFP coming out for SPS in our resource plan, those are the reasons why we have a range of 5,000 to 10,000 megawatts and up to that range to ensure that we enable some of the growth that we're seeing.

Brian J. Van Abel: It leads to that when we talk about that RFP coming out in Sps in our resource plan. There is a reason why we got a range $5 or $10 a megawatt that upside to the range is ensure that we enable some of the growth that we're seeing.

Jeremy Bryan Tonet: Got it. Certainly, New Mexico, the low end of the cost curve for production in North America there. Yeah. Maybe continue with Texas a little bit more and follow up on the wildfires. Just wondering if Texas caps non-economic damages or just any other details you could provide there?

Brian J. Van Abel: Got it certainly new Mexico at the low end of the cost curve for production in North America there yes.

Jeremy Bryan Tonet: Yes.

Jeremy Bryan Tonet: Maybe maybe continuing with Texas, a little bit more in following up on the wildfires just wondering if Texas cap's non economic damages or just any other details you can provide there.

Brian J. Van Abel: Yeah, right now, there is no cap on non-economic damages in Texas. There's a cap on punitive damages, which is two times economic damages, plus up to $750K for non-economic damages.

Jeremy Bryan Tonet: Yes, right now there is no cap on non economic damages in Texas. There is a cap on punitive damages just two times economic damages.

Brian J. Van Abel: 750, K cap are not economic.

Jeremy Bryan Tonet: Got it. Thank you for that. And then I'm looking forward to the Colorado wildfire mitigation plan filing. There's been some press in the state around recent de-energization in Colorado. Can you speak to the opportunity for sexualization or other efforts to reduce customer impacts? Any other nuances to the filing you could share with us?

Speaker Change: Got it thank you for that and then.

Jeremy Bryan Tonet: Looking forward to the Colorado wildfire mitigation plan filing.

Jeremy Bryan Tonet: There's been some press in the state around recent D. <unk> in Colorado can you speak to the opportunity for sexualization or other efforts to reduce customer impacts any other nuances to the filing you could share with us.

Robert C. Frenzel: Yeah, Jeremy, thanks for the question. You know, first, I'm really proud of what the team did in Colorado and executing on behalf of public safety during a volatile weather event. If you can imagine it, the second filing of our wildfire mitigation plan is going to have a lot of continuation of the existing plan and probably incremental areas that we'd be looking for. But as I think about the big buckets of opportunity there, really early warning capabilities. We've already solved 21 panel cameras, but I think there's a real opportunity for increased early warning capabilities with AI-powered cameras, as well as weather stations in and around our territories and our equipment.

Jeremy Bryan Tonet: Yeah, Hey, Jeremy it's Bob Thanks for the question.

Robert C. Frenzel: First I'm really proud of what the team did in Colorado and executing on behalf of public safety during volatile weather event.

Robert C. Frenzel: As you can imagine the.

Robert C. Frenzel: The second filing of our wildfire mitigation plan, it's going to have a lot of continuation of the existing plan and probably incremental areas that we'd be looking for but as I think about the big buckets of opportunity there.

Robert C. Frenzel: Really.

Robert C. Frenzel: Early warning capabilities, we've already sold 21 handheld cameras, but I think there's a real opportunity for increase early warning capabilities with AI powered cameras as well as as weather stations in and around our territories and our equipment.

Robert C. Frenzel: Obviously, we have opportunities to improve our operating capabilities in public safety power shutoffs, as well as enhanced power line safety settings. But we're executing those today, and we're doing a pretty good job. We have more work to do there. I think about the third bucket and kind of where your question leads to, sort of asset resilience capabilities, and we can continue to inspect our poles and wires for plane stuff and maybe accelerate some of that.

Robert C. Frenzel: Obviously, we have opportunities to improve our operating capabilities and public safety power shutoff valves as well as even the power line.

Robert C. Frenzel: <unk> power Rois safety settings.

Robert C. Frenzel: But we're executing those today and we're doing a pretty good job we have more work to do there.

Robert C. Frenzel: I think by the third bucket, where kind of where your question leads to us.

Robert C. Frenzel: Sure asset resilient capabilities, and we can continue to expect our poles and wires replace stuff and maybe accelerating some of that but I think also system resiliency and this gets back to your comment on sexualizing. We've done some of that we have a real opportunity to do that more both our intelligence at a granular level of weather.

Robert C. Frenzel: But I think also of system resiliency, and this gets back to your comment on sectionalizing. We've done some of that. We have a real opportunity to do that more. Both our intelligence at a granular level about weather and what's happening in the weather, as well as our ability to control our system at a more micro level to mitigate customer impact is a real priority for us in this plan. And lastly, you know, part of the plan is other public policy opportunities that we might have to protect our customers.

Robert C. Frenzel: What's happening whether as well as our ability to control our system at a more micro level to mitigate customer impact is a real priority for us in this plan.

Robert C. Frenzel: And lastly, as part of the plan is other public policy opportunity that we might have to.

Robert C. Frenzel: So, big buckets there, but hopefully, I got to your sectionalizing question, as well as, you know, asset hardening like undergrounding, covered conductors, and other pieces of both the transmission and distribution systems. As we think about, protecting public safety is a priority for us.

Robert C. Frenzel: To protect our customers so a big buckets, there, but hopefully I got to your sexualizing question as well as asset hardening like underground covered conductors and other pieces of the both transmission and distribution systems as we think about protecting public safety is a priority for us.

Jeremy Bryan Tonet: Got it. Very helpful there. And just a last one, if I could, as it relates to gas cases in Minnesota and Colorado, any updates there that we should be thinking about or conversations with stakeholders and regulators on those cases and how you feel about them

Speaker Change: Got it very helpful. There and just a last one if I could as it relates to <unk>.

Jeremy Bryan Tonet: Gas cases in Minnesota, and Colorado any updates there that we should we think about our conversations with stakeholders and regulators on.

Brian J. Van Abel: Yeah, and just like I'll get on first with the Minnesota natural gas case, because that's probably the one that spurs us along, given that we just received intervener testimony. In the Department of Commerce, the Department of Commerce recommended a $44 million increase in the 9.4% ROE.

Jeremy Bryan Tonet: On those cases, and how you feel about those cases.

Brian J. Van Abel: Yes, and just slug, all get out first the munis over to natural gas case, because thats, probably the one that's furthest along given that we just received intervenor testimony.

Brian J. Van Abel: And the department of Commerce recommended.

Brian J. Van Abel: $44 million increase of nine 4% Roe.

Brian J. Van Abel: We have hearings in mid-July, but we'll certainly look for an opportunity to engage with our stakeholders to see if we can reach a settlement, which we did in the last Minnesota gas rate case. So we'll look to engage that. Like I said, hearings are in July. So from now until July, we'll want to engage on the net on the Colorado side.

Brian J. Van Abel: We had hearings in mid July although we'll certainly look this was an opportunity to engage with our with our stakeholders to see if we can reach reach a settlement, which we did in the last Minnesota gas rate case. So we want to do that like I said hearings are July so from now until July will want to engage there.

Brian J. Van Abel: We're still pretty early in the process. We haven't received intervener testimony yet. The procedural schedule just came out, so for us, it will be if there is a settlement. We get intervener testimony in mid-July. We get opportunity, there's a settlement deadline at the end of August, and then if we don't reach a settlement, we'll be hearing in mid-September for the decision in Q

Brian J. Van Abel: On the net on the Colorado side.

Brian J. Van Abel: We're still pretty early in the process. We haven't received intervenor testimony yet the procedural schedule just came out so for us it will be under the settlement, we get intervenor testimony in mid July we get opportunity Theres a settlement deadline at the end of August and then if we don't reach a settlement will be hearings in mid September.

Jeremy Bryan Tonet: You've got it. Very helpful.

Brian J. Van Abel: <unk> of their decision in Q4.

Carly Davenport: Thank you. Our next question is from Carly Davenport with Goldman Sachs. Please go ahead.

Speaker Change: Got it very helpful. Thank you.

Carly Davenport: Thank you. Our next question is from Carly Davenport with Goldman Sachs. Please go ahead.

Carly Davenport: Hey, good morning. Thanks for all the details so far. Maybe just on the resiliency plan filing at SPS that you expect in late 24, can you just remind us of the timing for getting that ultimately approved and when that spend would come into play? And then, I guess, any early views on kind of the sizing of that potential filing or, in addition to the wildfire mitigation piece that you flagged, what other buckets of spend do you think will be important there?

Carly Davenport: Hey, good morning, Thanks for all the detail so far.

Carly Davenport: Maybe just on the resiliency plan filing at Sps that you expect in late 'twenty. Four can you just remind us of the timing to getting that ultimately approved and one that spend would come into play and then I guess any early views on kind of the sizing of that potential filing or in addition to the wildfire mitigation piece that you flagged what other buck.

Brian J. Van Abel: Thank you, Carly. It's Brian.

Carly Davenport: That's of spend do you think will be important there.

Brian J. Van Abel: You know, as I said, we're just looking to put that filing together; it'd be late in Q4. So from a timing perspective, you're probably, you know, into Q3 of the following year for it to get approved. So I think from an overall perspective, I think you'd look at some of our kind of just distribution spend in SPS and you look at our five-year capital plan, and what you could be eligible for.

Speaker Change: Thanks, Charlie as Brian.

Brian J. Van Abel: We're just looking to.

Brian J. Van Abel: What can go put that filing together would be late in Q4 ourself.

Brian J. Van Abel: From a timing perspective, you're probably in the Q3 of the following year.

Brian J. Van Abel: To get approved so I think for the overall when you look at some of our kind of just distribution spend into Sps and you look at our five year capital plan and what could be <unk> or <unk>.

Brian J. Van Abel: Obviously were.

Brian J. Van Abel: Currently focused on the Colorado <unk> will take a lot of those.

Brian J. Van Abel: Obviously, we're currently focused on the Colorado WMP; we'll take a lot of those programs and apply them to SPS, but we'll tailor it because SPS is a very different geography than Texas is a very different geography when we think about what we should be doing to have risk mitigation from a wildfire perspective. And so we'll tailor it. But I think we'll get more color as we get further development of that resiliency plan later this year.

Brian J. Van Abel: Programs and apply it to Sps, but taylor, because STS very different geography than comp taxes, the very different geography, as we think about one what should we be doing to have risk mitigation for wildfire perspective, and so we will tailor it but I think we will give you more color as we get further development of that our brasilia.

Brian J. Van Abel: <unk> later this year.

Speaker Change: Got it Okay. That's helpful. Thank you and then the follow up is just on O&M.

Carly Davenport: Got it. Okay, that's helpful. Thank you.

Brian J. Van Abel: And then the follow up is just on O&M, you know, nice benefit during the quarter there. Is that just a function of kind of year over year timing, or is there potential downside to that annual guidance on O&M being up 1 to 2% for the year?

Brian J. Van Abel: Nice benefit during the quarter. There was that just a function of kind of year over year timing or is there potential downside to that annual guidance on O&M being up 1% to 2% for the year.

Speaker Change: Yeah. Good question I think from our perspective, where we had as you kind of noted we haven't changed our guidance for the year and even though we had a significant quarter over quarter change. So I look at it more from where we are from a budget perspective, which you don't see as it were slightly ahead of our budget for the first quarter.

Brian J. Van Abel: Yeah, good question. I think from our perspective, as you kind of noted, we haven't changed our guidance for the year-end, even though we had a significant quarter-over-quarter change. So I look at it more from where we are from a budget perspective, which you don't see, and we're slightly ahead of our budget for the first quarter. But from where we sit, I think it's early in the year, and our goal is just to land within that 1-2% O&M guidance range as we sit here.

Brian J. Van Abel: From what we where we sit I think it's early in the year that our goal is just to land within that 1%, 2% O&M guidance range.

Brian J. Van Abel: We sit here.

Speaker Change: Got it great. Thanks, so much for the color.

Brian J. Van Abel: Thank you. Our next question is from Anthony Powell with Mizuho. Please go ahead.

Carly Davenport: Got it. Great. Thanks so much for the caller.

Speaker Change: Hey, good morning, just two quick ones one is.

Anthony Crowdell: Thank you. Our next question is from Anthony Crowdell with Mizzou Hill. Please go ahead.

Carly Davenport: Any major change in the company's.

Anthony Crowdell: Cost to ensure.

Anthony Crowdell: The company's operations.

Anthony Crowdell: Hey, good morning, just two quick ones. One is, um, any major change in the company's cost to ensure the company's operation?

Anthony Crowdell: Okay.

Anthony Crowdell: Hey, Anthony.

Anthony Crowdell: Yes, that's a good question as we think about it so I assume youre, asking specifically about wildfire insurance for excess liability yes.

Brian J. Van Abel: Hey Anthony, Um, yeah, that's a good question, as we think about it. So I assume you're asking specifically about wildfire insurance or excess liability? Yeah, You know, all our other programs, I would say are relatively stable or don't have significant challenges, and I think about wildfire insurance. Just let's talk about wildfire insurance versus overall excess liability because there are two different things. I think this is a very key industry issue both at the state and federal level, and if you've been following the EEI, this is one of their top priorities this year from a federal perspective in terms of how do we think about getting a focus on damage limitations, you know, is there an insurance backstop or solution at the federal level, and think about specific criteria for wildfire mitigation plans in exchange for liability protections.

Brian J. Van Abel: Yes, I think yes, all of our other programs I would say a relatively stable or don't have significant.

Brian J. Van Abel: Challenges as I think about wildfire insurance and just.

Brian J. Van Abel: Let's shift over to wildfire insurance versus overall excess liability because there are two different things.

Brian J. Van Abel: I think this is a very key industry issue.

Brian J. Van Abel: Bold at the state and federal level and if you've been following this as one of their top priorities. This year from a firewall perspective.

Brian J. Van Abel: In terms of how do we think about moving.

Brian J. Van Abel: Focus on Dan's limitations or insurer backstop, our solutia Thunder level and think about specific criteria for wildfire mitigation plans in exchange for liability protection. So those are some of the broad buckets <unk> no I would say one thing you all from a state perspective, as we look forward.

Brian J. Van Abel: Our legislation legislative sessions are wrapping up here or have already wrapped up this year. So what we'll do is we'll look to work with our policymakers in our states.

Brian J. Van Abel: From here forward as we think about back to the <unk> session to see if there's any any state level solutions as we think about it now.

Brian J. Van Abel: So these are some of the broad buckets EEI is thinking about. Now I would say one thing from a state perspective as we look forward: legislative sessions are wrapping up here or have already wrapped up this year, so what we'll do is we'll look to work with our policymakers in our states kind of from here forward as we think about next year's legislative session to see if there are any state-level solutions as we think about it.

Brian J. Van Abel: Company perspective, or a commercial insurance perspective.

Brian J. Van Abel: Even prior to small cost creep.

Brian J. Van Abel: We were.

Brian J. Van Abel: <unk> clear understanding that from some of the commercial carriers. They were already looking to reduce their capacity and not just for us, but overall their exposure from a wildfire insurance perspective, and so that is going into the next policy cycle. These are annual renewals so far with normal isn't until Q4, So we will get more visibility.

Brian J. Van Abel: Now specifically from a company perspective or a commercial insurance perspective, even prior to Smokehouse Creek, we were seeing or understanding that from some of the commercial carriers, they were already looking to reduce their capacity, and not just for us, but overall their exposure from a wildfire insurance perspective. And so that's going into the next policy cycle. These are annual renewals, so our renewal is an Intel Q4. So we'll get more visibility into that.

Brian J. Van Abel: Intuit, but ill give yourself a little.

Brian J. Van Abel: A sense of where we sit today is we have.

Brian J. Van Abel: $500 million of coverage and we're paying a lot of $40 million premium for that coverage.

Brian J. Van Abel: Total excess liability, including wildfire, but I would expect that that covers that capacity, we called out and I expect premiums to be pressured absolutely. So.

Brian J. Van Abel: But, you know, I'll give you some, a little bit of a sense of where we sit today, above $500 million in coverage, and we're paying about a $40 million premium for that coverage. And that's total excess liability, including wildfire, but I would expect that that coverage that capacity to come down, and I expect premiums to be pressured. Absolutely. But you know, like I said, we're still a ways away from our renewal. So again, we'll provide more color as we get closer, but that's where we sit today.

Brian J. Van Abel: Like I said, we're still a ways away from our renewal.

Brian J. Van Abel: Again, we'll provide more color as we also but that's where we sit today.

Speaker Change: Great and then just one last one I think Bob you had mentioned.

Brian J. Van Abel: Pursuing some proactive legislation for wildfire risk.

Speaker Change: Would you be willing to bet, it's like Hey, maybe top three things or what are your goals in getting the legislation passed.

Brian J. Van Abel: Would you like to be included in the first wave of legislation passed whether it's.

Brian J. Van Abel: Limits on non economic.

Speaker Change: I'm just curious any color on that you would provide.

Anthony Crowdell: Great. And then just one last one.

Speaker Change: Yeah, Hey, good morning, Anthony and thanks for the question as Brian said this is a big an emerging national issue and we've seen pressure both on the retail side of insurance homeowners struggling to get homeowner insurance that protects from wildfire risk.

Anthony Crowdell: I think Bobby mentioned pursuing some proactive legislation for wildfire risk. Would you be willing to let us know, like, the maybe top three things, or what are your goals in getting legislation passed? Like, what's, you know, would you like to be included in your maybe first wave of legislation passed, whether it's, you know, limits on non-economic liability, or I'm just curious any color on that you would provide.

Anthony Crowdell: And you are seeing in the commercial side on the wholesale side as well so we've been active.

Anthony Crowdell: At the federal level in particular talking about sort of a natural opportunity we might have here.

Anthony Crowdell: <unk>.

Anthony Crowdell: I think about there are precedents at the federal level <unk>.

Robert C. Frenzel: Yeah, hey, Anthony, and thanks for the question. As Brian said, this is a big and emerging national issue, and we've seen pressure on the retail side of insurance, homeowners struggling to get homeowner insurance that protects them from wildfire risk, and you're seeing it on the commercial side, on the wholesale side as well. So we've been active at the federal level, in particular talking about sort of the national opportunity we might have here.

Anthony Crowdell: Where goods are really important for everybody likes the FDIC or FEMA or for flood insurance or other type programs or even nuclear backstop insurance from the price Anderson exited as federal precedents around.

Robert C. Frenzel: Texting.

Robert C. Frenzel: National goods like banking access like access to affordable electricity, so as I think about where the federal government could help in private lines at the state level, two which is.

Robert C. Frenzel: You know, I think about there are precedents at the federal level, you see stuff like where goods are really important for everybody, like the FDIC or FEMA or for flood insurance or other type programs or even nuclear backstop insurance from the Price-Anderson Act. So there's federal precedents around protecting national goods like banking access, like access to affordable electricity. So as I think about where the federal government could help, and this probably applies at the state level too, which is, Having an approved wildfire mitigation plan that can be reviewed by an agency of a state or federal level, and then if you're in compliance and current on that plan, then you have access to some form of backstop insurance program that provides protection and maybe access that maybe the commercial carriers aren't providing at an attractive or an affordable cost as that group of entities, you know, comes up to speed on risk and risk mitigation.

Robert C. Frenzel: <unk>.

Robert C. Frenzel: Having approved wildfire mitigation plan that can be.

Robert C. Frenzel: Viewed by an agency.

Robert C. Frenzel: On a federal level and then if you are in compliance.

Robert C. Frenzel: Current on that plan, then you have access to some form of fast off insurance program.

Robert C. Frenzel: That provides protection and may be accessed that they build cars the carriers are providing at an attractive or an affordable cost.

Robert C. Frenzel: That group of entities comes up to speed on risk and risk mitigation. So I think those are the big parameters, but I would think about.

Robert C. Frenzel: And certainly there are state precedent you can take you call or volatile or California laws and seed program square.

Robert C. Frenzel: No.

Robert C. Frenzel: Companies, along with their regulators and legislators are coming up with programs that provide more cost effective backstop for companies to bring down the risk and as I said in my prepared remarks at the end of the day.

Robert C. Frenzel: So I think those are the big parameters that I would think about, and certainly there are state precedents, you can take Utah or Nevada or California laws and see programs where, you know, companies, along with their regulators and legislators, are coming up with programs that provide more cost-effective backstops for companies to bring down the risk. And as I said in my prepared remarks, at the end of the day, you know, we have an enormous energy transition that we need to fund and make sure that our cost of capital is attractive to fund, which keeps the transition affordable for our customers and for the country.

Robert C. Frenzel: We have an enormous energy transition that we need to fund and making sure that our cost of capital is attractive to fund that Keith.

Robert C. Frenzel: The transition affordable for our customers and for the country.

Robert C. Frenzel: So I think it's important that we manage this risk we manage the financial cost of this risks and those are some of the areas that I would think are most important for us to go after.

Speaker Change: Yes, thanks for taking my questions.

Speaker Change: Yeah, just to add a little bit to that I think as Bob talked about the importance of kind of the insurance tax softened. Following AWS I think there's also an aspect. There is now of your follow up on the compliance of the Bellevue on Peter's a presumption of Prudence on which I think is important too and also looking at a lipid job liability of alumina limited on damages.

Robert C. Frenzel: And so I think it's important that we manage this risk, manage the financial cost of this risk, and those are some of the areas that I would think are most important for us to go after. Yeah, I'll read that. I think it's my question. Yeah, just to add a little bit to that, I think Bob talked about the importance of kind of the insurance tax stop and filing a WMP, but I think there's also an aspect there is, you know, if you're filing a WMP, there's a presumption, which I think is important too. And also looking at a limit on liability or limit on damage.

Speaker Change: Great. Thank you.

Robert C. Frenzel: Thank you. Our next question is from Sophie Karp with Keybanc. Please go ahead.

Robert C. Frenzel: Yeah.

Speaker Change: Hi, Good morning, Thank you for taking my question.

Robert C. Frenzel: I have a couple of Morningstar.

Speaker Change: Yeah. So on the Texas fire can you clarify how I guess the claim system and the litigation that's been filed against you again, well work together for a lack of a better word.

Sophie Karp: Thank you. Our next question is from Sophie Karp with KeyBank. Please go ahead.

Sophie Karp: Paul Coy litigating not filing claims talking they do both like how does it work.

Sophie Karp: Hi, good morning. Thank you for taking my question. I have a couple of questions today. Yeah, so on the Texas fire, can you clarify how, I guess, the claims system and the litigation that have been filed against you are going to, well, work together for lack of a better word? Like, are people who are litigating not filing claims, or can they do both?

Sophie Karp: Okay.

Speaker Change: Yes, I mean, so first of all I'll talk about the claims process and still early but we hope to encourage people to submit claims at 246, so far.

Sophie Karp: But how it works as anyone can submitted claims and when they submit that claim they don't waive their right to pursue a lawsuit but if.

Brian J. Van Abel: Hey Sophie, good morning. Yeah, I mean, first of all, let's talk about the claims process. It's still early, but we actually encourage people to submit claims. We've received 46 so far, but how it works is, you know, anyone can submit a claim, and when they submit that claim, they don't waive the right to pursue a lawsuit, but if there's a claim settlement, then that absolves or relieves any other potential lawsuits that they could file.

Sophie Karp: If those are claims settlement than that.

Brian J. Van Abel: Solves or relieves any other other potential lawsuits that they could file so thats how it could work, but also promote solar filed a lawsuit it certainly could be an opportunity to sell through that losses too so like I.

Brian J. Van Abel: We're encouraging people to enter the claims process and that we have settled a couple already and are in active settlement discussions with others.

Sophie Karp: Got it got it. Thank you and then my other question was on Colorado and excellent gas.

Brian J. Van Abel: So that's how it could work, but also, if someone files a lawsuit, you know, it certainly could be an opportunity to settle through that lawsuit, too. So, like I said, we're encouraging people to enter the claims process, and we've settled with a couple already, and we're in active settlement discussions with others.

Brian J. Van Abel: Got this clarification from the commission there that you know they are they want their utilities to pursue.

Brian J. Van Abel: Pipeline alternatives I guess for gas in Colorado could you comment on that.

Brian J. Van Abel: And just sort of how that will impact cure.

Sophie Karp: Got it, got it. Thank you. And then my other question is on Colorado and gas. I got this clarification from the commission there that, you know, they want the utilities to pursue non-pipeline alternatives, I guess, for gas in Colorado. Could you comment on that and just sort of how that will impact your investment in that state, particularly with gas?

Brian J. Van Abel: Investment in that state, particularly with gas.

Speaker Change: Hey, Tobey.

Sophie Karp: Look we've got a number of gas proceedings in Colorado over the last year.

Sophie Karp: Youre, referring to our clean heat plan and.

Sophie Karp: But we think that that was industry, leading or very unique filing and proactive on the company and the commission's parks to move forward that.

Sophie Karp: Big picture I think they are sitting there looking at the gas system as an effective delivery of energy, but making sure that if we got capacity needs from a growing customer base out there that we're looking at something other than pipeline alternatives and we're actively engaged net something we've always has the company looked at.

Robert C. Frenzel: Hey, Sophie. Look, we've done a number of gas proceedings in Colorado over the last year. I think you're referring to our clean heat plan, and we think that that was an industry-leading or very unique filing and proactive on the company and the Commission's part to move forward that big picture. I think they're sitting there looking at the gas system as an effective delivery of energy, whether that's more beneficial electrification, more powering up of homes for home heating and other needs. And we're certainly engaged in that process with them.

Robert C. Frenzel: But I don't think it's going to affect necessarily going forward in terms of significant changes in capital forecast from where we sit today.

Robert C. Frenzel: But maybe a more proactive approach with stakeholders and communities about finding maybe different types of solutions to solve the similar issues, whether that's more beneficial electrification more empowering the Av homes for home heating and other needs and we're certainly engaged in that process with them.

Sophie Karp: So the non-pipeline alternative is basically a word for electrification, or could that be something like increasing compression station output or something like that, like just kind of, what is that? It's, yeah, okay, so, I mean, actually, you bring up increasing compression stations, certainly an opportunity, I think generally it's thought of, you know, what are the electrification opportunities, say there's going to be a new neighborhood built, what are the old protocols, you know, it's, okay, sort of that neighborhood gas and expansion of a pipeline or what are the alternatives from an electrification perspective?

Sophie Karp: So the non pipeline I'm proud of is basically it works for electrification or could that be something like increasing like compression station now taught us something like that like just kind of.

Sophie Karp: What is that.

Speaker Change: Yes, so I'll answer.

Sophie Karp: As you bring up increasing compression station Serbian opportunity I think generally that's thoughtful what are the electrification opportunity say theres going to be a new neighborhood builds what is the alternative dose.

Sophie Karp: It's sort of the idea of oil and gas and expansion of our pipeline or what are the alternatives for more station perspective.

Sophie Karp: So that's probably the best way to think about it. I think there's probably one other bucket out there, and it's a very important project for the governor and the geothermal, whether at a district level or a residential level or a community level, exploring the possibilities of geothermal in the state is something we're willing to work with, or we're going to work with our customers and our stakeholders in the state. So it's not necessarily just electrification; it could be more different forms of heat for homes and communities. Thank you so much.

Sophie Karp: The best way to think about it I'd say, there's probably one other bucket out there and its severity.

Sophie Karp: A very important project for the governor and the geothermal whether at a district level or a residential level our community level exploring the possibilities of geothermal in the state are something we're willing to work with or we're going to work with our customers and our stakeholders in the state. So it's not necessarily just electrification it can be.

Sophie Karp: Or more different forms of.

Ryan Levine: Thank you. Our next question is from Ryan Levine with Citi. Please go ahead.

Sophie Karp: Inc for homes and communities.

Speaker Change: Got it. Thank you so much that's all from me.

Ryan Levine: Thank you. Our next question is from Ryan Levine with Citi. Please go ahead.

Robert C. Frenzel: Good morning. What role do you see PSPS having in terms of your wildfire mitigation plans, and are there any initiatives that you can take proactively to gain more stakeholder support to be able to implement it on a go-forward basis?

Ryan Levine: Good morning.

Ryan Levine: What role do you see PSTN, having in terms of your wildfire mitigation plans and are there any initiatives that you could take proactively to gain more stakeholder support to be able to implement that on a go forward basis.

Ryan Levine: Hey, Ryan, it's Bob. Certainly, we think of PSPS as kind of a tool of last resort, but public safety is our priority, and making sure that our communities are protected in volatile wind events and wildfire risk gains is really important to us as well. So are there opportunities for us to gain more public support? Of course there are, and there are ways that we can improve our own performance as we, you know, I hate to say gain more muscle here because it's something that I don't love to do, but when we have to do it, I think there are areas of improvement that we as a company have identified and are working with our Colorado Commission to do so.

Bob: Hey, Brian it's Bob.

Ryan Levine: Certainly we think.

Ryan Levine: PSP as kind of.

Ryan Levine: A tool of last resort.

Ryan Levine: But public safety is our priority in making sure their communities are protected and volatile wind events.

Ryan Levine: And while if our risk days, it's really important to us as well so are there opportunities for us to gain more public support of course, there are ways that we can improve our own performance.

Ryan Levine: <unk>.

Ryan Levine: <unk> gained more muscle here, because it's something that I don't want to do but we have to do it I think theres areas of improvement that we as a company have identified and are working with our Colorado Commission to do so and that includes.

Ryan Levine: And that includes, you know, early notification, excellence in outage maps, something I talked about earlier on segmentation. So all of this comes as a function of our wildfire mitigation plan: if we have better early warning devices like cameras, and weather stations, our ability to affect on a more localized level where the risk is and where the outage would need to be can get better. But that's going to take some time, some effort, and some partnership with our agencies and stakeholders in Colorado, for sure.

Ryan Levine: Early notification.

Ryan Levine: Excellent and outage map something I talked about earlier on segmentation.

Ryan Levine: So all of this comes as a function of our wildfire mitigation plan. If we have better early warning devices like cameras weather stations, our ability to effect on a more localized level, where the risk is and where the outage would need to be.

Ryan Levine: Get better, but that's going to take some times metric some partnership with our agencies and stakeholders in Colorado for sure.

Brian J. Van Abel: And then shifting gears on the financing plan, as security prices continue to move. How do you look at maybe assessing a time to come to market for capital raises? I think an earlier question, so you suggested avoidance of asset sales, but any color around response to maybe different security prices and how that can impact your financing?

Ryan Levine: And then shifting gears on the financing plan as the carrier prices continue to move.

Brian J. Van Abel: How do you look at maybe assessing a time to come to market or for capital raises I think an earlier question. You suggested is avoidance of asset sales, but.

Brian J. Van Abel: Any color around response to maybe different security prices and how that can impact your financing plan.

Ryan Levine: Hey, Ryan, I think a little bit as the color provided before is obviously, you know, overall, we believe our growth plans from an investment perspective, a long-term EBS growth perspective, impact our stance of maintaining a strong balance sheet. What I talked about, not necessarily an avoidance, but how do we look at the timing of equity and the timing of capital, particularly the timing of equity, given that we have a strong balance sheet? We can look at being flexible there.

Ryan Levine: Hey, Brian I think a little bit as the color I provided before is obviously one.

Ryan Levine: Overall, we believe our growth plans from an investment perspective, or long term EPS growth perspective of the impact in our sands and maintaining a strong balance sheet, what I talked about not necessarily an avoidance, but how do we look at the timing.

Ryan Levine: All the equity and the timing of capital are pretty clear on the timing of equity given that we have a strong balance sheet.

Ryan Levine: But I would expect that, you know, when we're investing $39 billion of capital at a 9% rate of growth, that does come with the financing. And generally, you'll require financing year in and year out that's aligned with the capital spend. So that's the best way to think about it. But obviously, you know, we're looking to understand what happened to the cost of equity here. And also with the cost of that, where that's gone up over the short term in terms of our trading rates, so that's factored into all of our plans. And I sit here today and talk about reiterating, reiterating being at or above our 570.

Ryan Levine: As we can look at being flexible there, but I would expect that you know when we're investing $39 billion of capital at a 9% rate base growth that does come with the financings in January over prior financings here and in Europe, that's aligned with the capital spend so that's the best way to think about it but obviously you know.

Ryan Levine: And what happened to the cost of equity here and also with the cost of that where that's gone up over the short term in terms of our treasury rates have gone, so, but thats factored into all of our plans as I sit here today and talk about reiterating reiterating all being at or above our five 7%.

Speaker Change: Okay and then just last question in terms of Capex outlook, given maybe acceleration of <unk> infrastructure build out in North America, you are seeing any.

Robert C. Frenzel: Okay, and then just last question in terms of CapEx Outlook, given maybe the acceleration of infrastructure build out in North America, are you seeing any indications that maybe costs will come higher for what's already slated to be built in the coming years? Any color you could share on that?

Robert C. Frenzel: Indications that may be cost will come higher.

Robert C. Frenzel: For what's already slated to be built in the coming years or any color you could Sharon.

Speaker Change: Okay Ryan.

Robert C. Frenzel: Look I think as we see rate realization as we see data center build outs.

Ryan Levine: Hey, Ryan, look, I think as we see reindustrialization, we see data center build out. Certainly, there can be cost pressures that come from, you know, basic materials and construction materials like concrete, steel, and things like that. I think we take our best estimates, we put our capital forecast out, but it's something we watch pretty closely.

Ryan Levine: Certainly there can be cost pressures that come from basic materials and construction materials like concrete steel and things like that I think we take our best estimate as we put our capital forecast out, but something we watch pretty closely.

Ryan Levine: Labor is another area of Av.

Robert C. Frenzel: You know, labor is another area of opportunity there. I think that, you know, one of the things we're very focused on is we see an energy sector transition, making sure that there's a pipeline of talent, starting early on in trade schools and partnering with our labor unions and business partners there to make sure that the pipeline of linemen and pipefitters and welders is capable of keeping up with the demand. And so we try to send early demand signals to them and help them in their recruitment processes across our territories and really partner on a national level to make sure that we're seeing enough trade come into the business broadly so that we don't see an immense amount of labor.

Ryan Levine: Opportunity there I think that.

Robert C. Frenzel: One of the things, we're very focused on DC and energy.

Robert C. Frenzel: Sector transition, making sure that there is a pipeline of talent.

Robert C. Frenzel: Early on in trade schools, and partnering with our labor unions and business partners there to make sure that the pipeline of line pipe Fitters welders are capable of keeping up with the demand. So we tried to send early demand signals to them.

Robert C. Frenzel: And held them in recruitment processes across our territories and really partner on a national level to make sure that we're seeing enough trained come into the business broadly that we don't see an immense amount of labor pressure.

Ryan Levine: Great, thanks for taking my question.

Speaker Change: Great. Thanks for taking my questions.

Paul Patterson: Thank you. Our next question is from Paul Patterson with Glenrock Associates. Please go ahead.

Ryan Levine: Thank you. Our next question is from Paul Patterson with <unk> Associates. Please go ahead.

Paul Patterson: Good morning, all. Just, I apologize if you guys have gone over this, but just on the Nuke life extension, do you remind me what the impact is financially? Have you guys already?

Speaker Change: Hey, good morning.

Paul Patterson: Good morning, Paul.

Paul Patterson: Just I.

Paul Patterson: I apologize if you guys have gone over this but just on the.

Paul Patterson: The nuc.

Paul Patterson: Life extension.

Paul Patterson: But.

Paul Patterson: You remind me what the impact.

Brian J. Van Abel: It varies from company to company how the depreciation impact is recognized, when it's recognized, etc. I was just wondering if you could review that for me shortly, quickly, if that's not a problem.

Paul Patterson: Financially is.

Brian J. Van Abel: Have you guys already.

Brian J. Van Abel: It varies from company to company how the.

Brian J. Van Abel: The depreciation impact.

Brian J. Van Abel: When it is recognized et cetera, I was just wondering if you could review that for me shortly quickly if it's not a problem.

Paul Patterson: Hey, Paul. Yeah, you're referencing the resource plan that we just filed here in Q1 related to the extension of Monticello. So Monticello, we've already extended to 2040, and we recognize that depreciation in terms of lower customer bills. We'll wait until we get through this proceeding to get approval, and likely we'll wrap it into our next rate case. So this proceeding is probably going to take 18 months to play out, at the very least. And it's going to be a couple of years before we can pull that back into customer rates in terms of lower depreciation.

Paul Patterson: Hey, Paul.

Paul Patterson: Yes, and Youre referencing the resource plan that we just filed here in Q1 related to the extension of mono cell of the amount of solar we already extended to 2040, and we recognize that depreciation in terms of lower customer bills. So we're looking to extend bonney for 'twenty, 40% of 2015, and then primary Ireland both unit.

Paul Patterson: Its 20 year, so a little bit from the early 2000 <unk> to the early 2015, we have not recognized those three call lower depreciation depreciation rates in customer bills are into rate base. We'll have we'll wait until we get through this proceeding to get approval than what we had rapid into our next rate case. So this proceeding is probably.

Paul Patterson: They take 18 months to cloud at the very least so it's going to be a couple of years before we can pull that back into customer rates in terms of lower depreciation.

Paul Patterson: Just is there any potential for for regulatory sort of positive regulatory lag.

Brian J. Van Abel: Okay, great. Just, is there any potential for regulatory, sort of positive regulatory lag, or are you guys planning on having it immediately impact customer expectations?

Paul Patterson: Or does it are you guys planning on having it immediately impact customers.

Brian J. Van Abel: No. This is bit of a likely just be captured either either have a deferral hero or likely if we're in a multiyear plan, we had a true up mechanism part.

Speaker Change: Okay awesome. Thanks, so much guys.

Paul Patterson: No, this isn't likely to just be captured. You either have a deferral here, or, likely, if we're in a multi-year plan, we have a throw-up mechanism for it. Okay. Awesome. Thanks so much, guys.

Brian J. Van Abel: Okay.

Speaker Change: Thank you as we have no further questions in the queue I'd like to turn it back over to CFO, Brian Van Abel for any closing remarks.

Speaker Change: Yes. Thank you all for printers participating in our earnings call. This morning, please contact our Investor relations team with any follow up questions.

Paul Patterson: Okay, awesome, thanks so much, guys.

Speaker Change: Thank you very much that concludes today's conference you may now disconnect hosts you may stay on the line.

Brian J. Van Abel: Thank you. As we have no further questions in the queue, I'd like to turn it back over to CFO Brian Van Abel for any closing remarks.

Brian J. Van Abel: Yes.

Brian J. Van Abel: Yes.

Brian J. Van Abel: Okay.

Brian J. Van Abel: Yeah, thank you all for participating in our earnings call this morning. Please contact our investor relations team with any follow-up questions.

Brian J. Van Abel: Okay.

Brian J. Van Abel: <unk>.

Brian J. Van Abel: Okay.

Brian J. Van Abel: <unk>.

Unknown Executive: Thank you very much. That concludes today's conference. You may now disconnect. Hosts, you may stay on the line.

Brian J. Van Abel: <unk>.

Speaker Change: Thank you.

Brian J. Van Abel: Sure.

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