Q1 2024 Duke Energy Corp Earnings Call
Lydia: Hello all, and welcome to Duke Energy's first quarter 2024 earnings call. My name is Lydia, and I'll be your operator today. If you'd like to ask a question during the Q&A, you can do so by pressing the star followed by 1 on your telephone keypad. I'll now hand you over to Abby Motsinger, Vice President of Investor Relations.
Hello, and welcome to Duke Energy first quarter 2020 earnings call.
Lydia: My name is Lydia and there'll be you operate today.
Lydia: If you'd like to ask a question during the Q&A you can do so my question Star followed by one on your telephone keypad.
Abby Motsinger: I'll now hand, you over to Apomorphine, Vice President of Investor Relations to begin.
Abby Motsinger: Thank you, Lydia. And good morning, everyone. Welcome to Duke Energy's first quarter 2024 earnings review and business update. Leading our call today is Lynn Good, Chair and CEO, along with Harry Sedaris, President, and Brian Savoy, CFO. Today's discussion will include the use of non-GAAP financial measures and forward-looking information. However, actual results may differ from forward-looking statements due to factors disclosed in today's materials and in Duke Energy's SEC filings. The appendix of today's presentation includes supplemental information, along with a reconciliation of non-GAAP financial measures. With that, I will turn the call over to Lynn. Abby, thank you. Good morning, everyone.
Abby Motsinger: Thank you Lydia and good morning, everyone and welcome to Duke Energy's first quarter 2024 earnings review and business update.
Speaker Change: Leading our call today is Lynn good chair and CEO, along with Terry Sudairis, President and Brian Savoy CFO.
Abby Motsinger: Today's discussion will include the use of non-GAAP financial measures and forward looking information.
Abby Motsinger: Actual results may differ from forward looking statements due to factors disclosed in today's materials and in Duke Energy's SEC filings.
Abby Motsinger: The appendix of today's presentation includes supplemental information along with a reconciliation of non-GAAP financial measures with that let me turn the call over to Lynn.
Speaker Change: Thank you and good morning, everyone today, we announced first quarter adjusted earnings per share of $1 44, delivering a strong start to the year. These.
Lynn J. Good: Today we announce first quarter adjusted earnings per share of $1.44, delivering a strong start to the year. These results are 24 cents above last year, driven by growth from rate activity across our jurisdiction, strengthening retail volumes, and improved weather. We remain confident in our outlook and are reaffirming our 2024 guidance range of 585 to 610 and our long-term EPS growth rate of 5 to 7% through 2028. We have a clear path forward as a fully regulated utility operating in some of the most attractive and fastest growing areas of the country.
Lynn J. Good: These results are 24 cents above last year, driven by growth from rate activity across our jurisdictions strengthening retail volumes and improved weather.
Lynn J. Good: We remain confident in our outlook and are reaffirming our 2024 guidance range of $5 85 to 610, and our long term EPS growth rate of 5% to 7% through 2028.
Lynn J. Good: We have a clear path forward as a fully regulated utility operating in some of the most attractive and fastest growing areas of the country.
Lynn J. Good: Our strategy will drive continued growth underpinned by our five-year, $73 billion capital plan, efficient recovery mechanisms, and track record of constructive regulatory outcomes. Moving to slide five, our jurisdictions are experiencing unprecedented growth from population migration and economic development.
Lynn J. Good: Our strategy will drive continued growth underpinned by our five year $73 billion capital plan efficient recovery mechanisms and track record of constructive regulatory outcomes.
Lynn J. Good: Moving to slide five our jurisdictions are experiencing unprecedented growth from population migration and economic development. We're committed to meeting these increasing customer demands through in all of the above strategy that preserves affordability and reliability as we decarbonize.
Lynn J. Good: We're committed to meeting these increasing customer demands through an all-of-the-above strategy that preserves affordability and reliability as we decarbonize. In doing so, 2024 marks an important stage in our fleet transition as we move from the planning phase to project implementation. In Florida, we're on track to have 1,500 megawatts of utility-owned solar in service by year-end. And in our recently-filed 10-year site plan, we expect to more than triple the amount of solar on our system by 2033.
Lynn J. Good: In doing so 2024 marks an important stage in our fleet transition as we move from the planning phase to project execution and Florida were on track to have 500 megawatts of utility owned solar in service by year end.
Lynn J. Good: And in our recently filed 10 year site plan, we expect to more than triple the amount of solar on our system by 2033.
Lynn J. Good: In the Carolinas, we're completing annual solar procurements that will add approximately 1,500 megawatts to the grid each year, beginning in 2027. These investments are part of our goal to have 30,000 megawatts of regulated renewables on our system by 2035. In the Carolinas, we filed Certificates of Public Convenience and Necessity in March to build more than 2 gigawatts of new, advanced-class natural gas generation. The filings with the NCUC include two simple cycle combustion turbines and one combined cycle plant consistent with the Carolinas Resource Plan. Pending regulatory approvals, construction is planned to start in 2026, with all units operational by the end of 2028.
Lynn J. Good: In the Carolinas were completing annual solar procurement that will add approximately 500 megawatts to the grid each year beginning in 2020.
Lynn J. Good: These investments are part of our goal to have 30000 megawatts of regulated renewables on our system by 2035.
Lynn J. Good: In the Carolinas, we filed certificates of public convenience and necessity in March to build more than two gigawatts of new advanced class natural gas generation the filings with EMC. UC include two simple cycle combustion turbines on one combined cycle plants consistent with the Carolinas resource plan pending.
Lynn J. Good: Regulatory approvals construction is planned to start in 2026 with all units operational by the end of 2028. Each of these new facilities will be decided in existing coal plants and will provide needed. This basketball generation when those units retire.
Lynn J. Good: Each of these new facilities will be sited in existing coal plants and will provide needed dispatchable generation when those units retire. We recognize there's a lot of attention on natural gas and its role in achieving net zero. We believe natural gas must be a part of not just Duke's but our nation's energy transition strategy. In the face of unprecedented demand from AI, data centers, chip manufacturers, and other economic developments, natural gas remains an essential tool to provide reliable and affordable energy for customers and complements our substantial investments in renewables and energy storage.
Lynn J. Good: We recognize there's a lot of attention on natural gas and its role in achieving net zero.
Lynn J. Good: We believe natural gas must be a part of not just duke's, but our nation's energy transition strategy in the face of unprecedented demand from AI data centers chip manufacturers and other economic development natural gas remains an essential tool to provide reliable and affordable energy for customers and complements our substantial.
Lynn J. Good: Once in renewables and energy storage.
Lynn J. Good: As you know, EPA recently released rules that place limits on certain base load generation sources. While the fate of this rule will soon be in the hands of the courts, we will continue to advocate for solutions to reliably and affordably serve the growing energy needs of our customers and communities.
Lynn J. Good: As you know EPA recently released ruled that placed limits on certain baseload generation sources, while the fate of this rule will soon be in the hands of the courts. We will continue to advocate for solutions to reliably and affordably serve the growing energy needs of our customers and communities.
Lynn J. Good: As we step into this period of significant infrastructure build for the company, we recently appointed Harry Sedaris, president of Duke Energy. As President, the area has responsibility for all of our electric and gas utilities, including all aspects of operations and regulatory activities. Harry is a 28-year company veteran and has an exceptional track record of accomplishment and leadership across many functions. He began his career in generation, led environmental health and safety, served as the president of our Florida utility, and most recently led transmission, distribution, and customer operations, including economic development.
Lynn J. Good: As we step into this period of significant infrastructure build for the company. We recently appointed <unk> President of Duke energy.
Lynn J. Good: As President Harry has responsibility for all of our electric and gas utilities, including all aspects of operations and regulatory activities.
Lynn J. Good: <unk>, a 28 year company veteran and has an exceptional track record of accomplishment and leadership across many functions.
Lynn J. Good: He began his career generation led environmental health and safety served as the president of our Florida utility and most recently led transmission distribution and customer operations, including economic development.
Lynn J. Good: Harry is a trusted member of the executive leadership team, and in his new role, he remains committed to delivering value to our customers and our investors. I'm pleased to introduce him for the first time on an earnings call and his new role as president. And with that, Harry, I'll turn it over to you to go through the jurisdictional highlights.
Lynn J. Good: Harry as a trusted member of the executive leadership team and in this new role he remains committed to delivering value to our customers and our investors I am pleased to introduce them for the first time on an earnings call in his new role as president.
Harry: And with that Gary I'll turn it over to you to go through the jurisdictional highlights.
Harry Sedaris: Thank you, Lynn, for the introduction. I'm excited for the new role and look forward to leading our utilities and operations through this important time in our energy transition. Turning to slide 6. Meeting our customers' expectations requires collaboration with regulators, policymakers, and other stakeholders, and we continue to make great progress across our jurisdiction. Starting with South Carolina, hearings begin on May 20th in our Duke Energy Carolinas rate cage. Since our last rate case in 2018, our rate base has increased by almost $2 billion, driven by investments to improve reliability and resiliency and meet the growing energy needs of our customers. We expect new rates to be implemented on August 1st.
Harry: Thank you for the introduction I am excited for the new role and look forward to leading our utilities and operations through this important time in our energy transition.
Harry Sedaris: Turning to slide six.
Harry Sedaris: Meeting, our customers' expectations requires collaboration with regulators policymakers and other stakeholders and we continue to make great progress across our jurisdictions.
Harry Sedaris: Starting with South Carolina hearings begin may 20th in our Duke energy Carolinas rate case.
Harry Sedaris: Since our last rate case in 2018, our rate base has increased by almost $2 billion driven by investments to improve reliability and resiliency and meet the growing energy needs of our customers, we expect new rates to be implemented August one.
Harry Sedaris: Shifting to Florida, in April, we filed our next three-year, multi-year rate plan that will begin in 2025. The plan includes grid investments to enhance reliability, decrease outages, and shorten restoration times, building on Duke Energy Florida's best reliability year in over a decade in 2023. The filing also covers investments to add new solar and battery storage, as well as improve the efficiency of our current generation assets. Even with the requested base rate increases, we expect overall customer bills to decrease in 2025 as fuel under recovery, storm restoration costs, and legacy purchase-powered contracts expire at the end of the year. In Indiana, we filed our first rape case in four years in April.
Harry Sedaris: Shifting to Florida in April we filed our next three year multiyear rate plan that will begin in 2025.
Harry Sedaris: Our plan includes grid investments to enhance reliability decrease outages and shorten restoration times building on Duke Energy's, Florida is best reliability year in over a decade in 2023.
Harry Sedaris: Following also covers investments to add new solar and battery as well as improve the efficiency of our current generation assets.
Harry Sedaris: Even with our requested base rate increases, we expect overall customer bills to decrease in 2025 as fuel under recovery storm restoration costs and legacy purchase powered contracts expire at the end of the year in.
Harry Sedaris: In Indiana, we filed our first rate case in four years in April.
Harry Sedaris: Since our last case, we've invested more than $1.6 billion to support the state's growing population and increase the resiliency and security of the grid. The case includes a four-test year and two rate step-ups starting in the first quarter of 2025, smoothing the impact to customers. And finally, Piedmont Natural Gas also filed a rate case in North Carolina in April. The request covers significant infrastructure investments to comply with federal safety regulations, enhance the customer experience, and provide safe, reliable natural gas service.
Harry Sedaris: Since our last case, we've invested more than $1 $6 billion to support the state's growing population and increase the resiliency and security of the grid.
Harry Sedaris: The case includes a forward test year and two rate step ups, starting in the first quarter of 2025 smoothing the impact to customers.
Harry Sedaris: And finally Piedmont natural gas also filed a rate case in North Carolina in April the request cover significant infrastructure investments to comply with federal safety regulations enhance the customer experience and provide safe and reliable natural gas service as part of the filing Piedmont is also requesting can.
Harry Sedaris: As part of the filing, Piedmont is also requesting concurrent rate reductions for pass-through natural gas costs, which will help mitigate the impacts on the customer bill. We plan to implement interim rates on November 1st, with the final order expected in January. We've made great progress in the first quarter, advancing rate cases and fleet transition projects across our footprint. As we embark on this period of significant infrastructure build, we have confidence that our investment plan will deliver sustainable value to shareholders through 5 to 7 percent earnings growth. With that, let me turn the call over to Brian.
Brian: Current rate reductions for pass through natural gas costs, which will help mitigate the impacts to the customer bill.
Brian: We plan to implement interim rates November one with the final order expected in January.
Brian: We've made great progress in the first quarter advancing rate cases and fleet transition.
Brian: <unk> across our footprint as we embark on this period of significant infrastructure build we have confidence that our investment plan will deliver sustainable value to shareholders and 5% to 7% earnings growth.
Harry Sedaris: With that let me turn the call over to Brian.
Brian D. Savoy: Thanks, Harry. And good morning, everyone.
Brian: Thanks, Larry and good morning, everyone.
Brian D. Savoy: Turning to slide 7, our first quarter reported and adjusted earnings per share were $1.44. This compares to reported and adjusted earnings per share of $1.01 and $1.20 last year. Within the segments, electric utilities and infrastructure were up 29 cents compared to last year. Growth was driven by rate increases, higher volumes, and improved weather. Partially offsetting these items were higher interest expense and depreciation on a growing asset. As a reminder, residential decoupling was in effect for both of our North Carolina utilities this quarter, which moderated the impact of a mild winter in the Carolinas. Moving to gas utilities and infrastructure, results were flat compared to last year.
Brian: Turning to slide seven our first quarter reported and adjusted earnings per share were $1 44.
Brian D. Savoy: This compares to reported and adjusted earnings per share of $1, one and $1 20 last year.
Brian D. Savoy: Within the segments electric utilities and infrastructure was up 29 cents compared to last year.
Brian D. Savoy: Growth was driven by rate increases higher volumes and improved weather.
Brian D. Savoy: Partially offsetting these items were higher interest expense and depreciation on a growing asset base.
Brian D. Savoy: As a reminder, residential decoupling was in effect for both of our North Carolina utilities, this quarter, which moderated the impact of a mild winter in the Carolinas.
Brian D. Savoy: Moving to gas utilities and infrastructure results were flat compared to last year.
Brian D. Savoy: And finally, the other segment was down 5 cents, primarily due to higher interest. With a strong start to the year, we're on track to deliver on our 2024 EPS guidance. Turning to slide eight.
Brian D. Savoy: And finally, the other segment was down <unk> <unk>, primarily due to higher interest expense.
Brian D. Savoy: With our strong start to the year, we're on track to deliver on our 2024 EPS guidance range.
Brian D. Savoy: Turning to slide eight.
Brian D. Savoy: We were pleased to see solid growth in weather normal volumes this quarter versus last year. Customer growth remains robust in our jurisdictions, led by the Carolinas and Florida, which both grew 2.4%. We're also encouraged to see improving residential usage across our jurisdictions. Commercial and industrial volumes were up over 1% versus last year, driven by strength in the commercial sector.
Brian D. Savoy: We were pleased to see solid growth in weather normal volumes this quarter versus last year.
Brian D. Savoy: Customer growth remains robust in our jurisdictions led by the Carolinas, and Florida, which both grew two 4%.
Brian D. Savoy: We're also encouraged to see improving residential usage across our jurisdictions.
Brian D. Savoy: Commercial and industrial volumes were up over 1% versus last year, driven by strength in the commercial sector.
Brian D. Savoy: We're closely monitoring economic trends and remain in regular conversations with our largest customers. Notably, these customers continue to convey expectations for growing power needs in the second half of the year. Combined with new economic development projects coming online, we expect growth to accelerate throughout the year. Turning to slide 9, the impact of economic development activity in our jurisdictions cannot be overstated.
Brian D. Savoy: We are closely monitoring economic trends and remain in regular conversations with our largest customers.
Brian D. Savoy: Notably these customers continue to convey expectations for growing power needs in the second half of the year.
Brian D. Savoy: Combined with new economic development projects coming online, we expect growth to accelerate throughout the year.
Brian D. Savoy: Turning to slide nine the impact of economic development activity in our jurisdictions cannot be overstated. We are gearing up to serve up to 18000 gigawatt hours of additional loan from these projects in 2028.
Brian D. Savoy: We are gearing up to serve up to 18,000 gigawatt hours of additional load from these projects in 2028. This is up 2,000 gigawatt hours from the projection we just shared in February, demonstrating the strength of our economic development pipeline. As a reminder, we take a risk-adjusted approach to our forecast and generally only include the most mature and committed projects. We've included a few photos that showcase the impressive size and scale of the construction activity underway. Pictured at the top of the slide is a substation that will serve Wolfspeed's $5 billion semiconductor manufacturing facility in North Carolina. The new factory will bring about 1,800 jobs to the state.
Brian D. Savoy: This is up 2000 gigawatt hours from the projection, we just shared in February demonstrating the strength of our economic development pipeline.
Brian D. Savoy: As a reminder, we take a risk adjusted approach to our forecast and generally only include the most mature and committed projects.
Brian D. Savoy: We've included a few photos that showcase the impressive size and scale of the construction activity underway.
Brian D. Savoy: Pictured at the top of the slide it's a substation that will serve wolf speeds 5 billion semiconductor manufacturing facility in North Carolina.
Brian D. Savoy: The new factory will bring about 1800 jobs to the state.
Brian D. Savoy: We recently energized the initial transformer bank in the substation, and Wolfspeed expects the facility to begin production by early next year. This project and others across many sectors, including batteries, data centers, EVs, and pharmaceuticals, to name a few, are making tangible progress and will provide meaningful load growth in our service territory. We operate in some of the most attractive jurisdictions for both economic development and customer migration, which underpins our confidence in our 2% volume growth forecast for 2024 and 1.5% to 2% growth rate over the five-year planning horizon. Turning to slide 10.
Brian D. Savoy: We've recently energized the initial transformer bank and the substation and Wolf speed expects the facility to begin production by early next year.
Brian D. Savoy: This project and others across many sectors, including batteries data centers <unk> and pharmaceuticals to name a few are making tangible progress and will provide meaningful load growth in our service territories.
Brian D. Savoy: We operate in some of the most attractive jurisdictions for both economic development and customer migration, which underpins our confidence in our in our 2% volume growth forecast in 2024, and one 5% to 2% growth rate over the five year planning horizon.
Brian D. Savoy: Turning to slide 10, we recognize the importance of a strong balance sheet as we execute one of the sector's largest capital programs.
Brian D. Savoy: We recognize the importance of a strong balance sheet as we execute one of the sector's largest capital programs. We are on track to achieve 14% FFO to debt by the end of this year, which represents 100 basis points of cushion to our Moody's downgrade threshold. The biggest driver of our FFO improvement is the implementation of the North Carolina rate case, which adds nearly $700 million of annual revenue. Combined with the collection of remaining deferred fuel balances, monetization of tax credits, and programmatic equity issuances, we have a clear line of sight to achieving our target.
Brian D. Savoy: We are on track to achieve 14% <unk> to debt by the end of this year, which represents 100 basis points of cushion to our Moody's downgrade threshold.
Brian D. Savoy: The biggest driver of our <unk> improvement is the implementation of the North Carolina rate cases.
Brian D. Savoy: Which add nearly $700 million of annual revenues.
Brian D. Savoy: Combined with the collection of remaining deferred fuel balances monetization of tax credits and programmatic equity issuances, we have clear line of sight to achieving our target.
Brian D. Savoy: As disclosed in February, we expect to issue $500 million of common equity annually over the five-year plan via our DRIP and ATM programs. We're off to a great start, having raised just over $100 million year-to-date. We also completed approximately 65% of our planned long-term debt issuances for 2024 in the first quarter, which helps to de-risk our We've raised $4.6 billion in long-term debt with an average interest rate of 5.19% and an average tenor of 13 years.
Brian D. Savoy: As disclosed in February we expect to issue $500 million of common equity annually over the five year plan via our drip and ATM programs, we're off to a great start having price just over $100 million year to date.
Brian D. Savoy: We also completed approximately 65% of our planned long term debt issuances for 2024 in the first quarter, which helps to Derisk our plan.
Brian D. Savoy: We've raised $4 6 billion in long term debt with an average interest rate interest rate of five 9% and an average tenor of 13 years.
Brian D. Savoy: We've been strategic in our approach, reducing floating rate exposure amid a rising rate environment and further diversifying our investor base with a Euro offering in April. As we have demonstrated this quarter and over many years, we are committed to our credit ratings and a strong balance sheet as we execute our growth objective. Moving to slide 11, we remain confident in delivering our 2024 earnings guidance range of 585-610 and growth of 5-7% through 2028.
Brian D. Savoy: We've been strategic in our approach reducing floating rate exposure amid a rising rate environment.
Brian D. Savoy: And further diversifying our investor base with a euro offering in April.
Brian D. Savoy: As we have demonstrated this quarter and over many years, we are committed to our credit ratings and a strong balance sheet as we execute our growth objectives.
Brian D. Savoy: Moving to slide 11, we remain confident in delivering our 2024 earnings guidance range of $5 85 to 610 and growth of 5% to 7% through 2028.
Brian D. Savoy: We operate in constructive, growing jurisdictions, and the fundamentals of our business are stronger than ever. We are well-positioned to achieve our growth targets for the year, which, combined with our attractive dividend yields, provide a compelling risk-adjusted return for shareholders. With that, we'll open the line to your questions.
Brian D. Savoy: We operate in constructive growing jurisdictions and the fundamentals of our business are stronger than ever.
Brian D. Savoy: We're well positioned to achieve our growth targets for the year, which combined with our attractive dividend yields provide a compelling risk adjusted return for shareholders.
Brian D. Savoy: With that we'll open the line for your questions.
Lydia: Thank you. If you'd like to ask a question, please press star followed by one on your telephone keypad. If you change your mind, it's star followed by two. Our first question today comes from Shah Pourreza of Guggenheim Partners. Your line is open.
Speaker Change: Thank you.
Speaker Change: If you'd like to ask a question. Please press star followed by one on your telephone keypad.
Shahriar Pourreza: Have you changed your mind Staphylococci.
Shahriar Pourreza: Our first question today comes from Shah <unk> of Guggenheim Partners. Your line is open.
Shahriar Pourreza: Hey guys, good morning. Good morning, Shahriar.
Shahriar Pourreza: Hey, guys good morning Morningstar.
Unnamed: Morning. Morning. Morning.
Shahriar Pourreza: Thanks, Sara good morning, good morning.
Lynn J. Good: Obviously, you guys reaffirmed that 1.5% to 2% load growth assumption, but also kind of concurrently kind of increased economic development activities. I mean, obviously, we've seen, you know, several of your peers raise load growth assumptions, kind of levering to that CNI customer backdrop, including, you know, large data centers coming into their states. I guess, Lynn, what's the trigger point and timing on when you will maybe re-guide around load growth, which to us seems conservative, especially in the Carolinas? And could the opportunities kind of be accretive to your EPS growth guide, like we heard from one of your southeastern peers? Thanks.
Unnamed: Morning.
Shahriar Pourreza: Obviously, you guys were firm you reaffirm that one 5% to 2% load growth assumptions, but also kind of concurrently kind of increase the economic development activities. I mean, obviously, we've seen several of your peers raise load growth assumptions kind of levered to that C&I customer backdrop, including large data centers coming into their states.
Lynn J. Good: I guess, what's the trigger point and timing on when you will maybe re guide around load growth, which to us seems conservative, especially in the Carolinas and could the opportunities kind of be accretive to your EPS growth guide like we heard from one of your south eastern peers. Thanks.
Lynn J. Good: You know, Shahriar; I'll take that. You know, we continue to be encouraged by the pace of economic development opportunities. Every time we do a new load forecast, we see more opportunities, and that's demonstrated by what we showed this morning. We typically update our full financial plan in February, right?
Lynn: Sure I'll take that.
Lynn J. Good: We continue to be encouraged by the pace of economic development opportunities every time, we do a new load forecast, we see more opportunities and that's demonstrated by what we showed this morning.
Lynn J. Good: We typically.
Lynn J. Good: <unk> update our full financial plan in February right, and we feel like updating load without updating the capex to support the load might be a bit disconnected and not show the full picture, but we do see clearly.
Brian D. Savoy: And we feel like updating load without updating the CapEx to support the load might be a bit disconnected and not show the full picture. But we do see clearly more tailwinds than headwinds as we look at growth over time. You know, all of this is a good sign.
Brian D. Savoy: More tailwind than headwind as we look at growth over time.
Brian D. Savoy: All of this sign is it good.
Brian D. Savoy: All of this points to a good sign of long-term EPS growth. You know, I would point to, on the EPS side of things, load growth, the capital opportunities for the energy transition, all this gives us a high degree of confidence in our 5 to 7 percent. And as we look throughout the plan, probably later in the plan, it pushes us toward the higher end of the range, but it gives us the opportunity if all this transpires. A very calculated position on our load growth, and we want to be smart about updating the plan prematurely before we put the capital to support the new load.
Brian D. Savoy: All of this points to a good sign of long term EPS growth.
Brian D. Savoy: I would point to.
Brian D. Savoy: On the EPS side of things.
Brian D. Savoy: Load growth capital opportunities for the energy transition.
Brian D. Savoy: All of this gives us a high degree of confidence in our 5% to 7%.
Brian D. Savoy: And as we look throughout the plant.
Brian D. Savoy: Probably later in the plan pushes pushes up pushes us in the higher end of the range.
Brian D. Savoy: But it gives us the opportunity if all of this transpires we're taken a.
Brian D. Savoy: Very calculated position on our load growth and we want to be smart about updating the plan prematurely before you put the capital to support the new load.
Lynn J. Good: Sure, one thing I might add is just to give you a metric on this, a thousand gigawatt hours represents 0.1% increase in our load growth. So we are trending to the higher end of that one and a half to two, and we'll continue to update you during 24 if we see more opportunities materialize, and as Brian said, we'll do a comprehensive update in February. I think the other thing I would note, given the size of our company, I believe the move from about a half percent load growth to 1.5% to 2% is quite strong, and we're proud of that, and we'll keep going. But I think that metric of 1,000 gigawatt hours being about 0.1 should help you get a sense of how we're moving.
Brian D. Savoy: So one thing I might add is just to give you a metric on this 1000 gigawatt hours.
Lynn J. Good: Represents.
Lynn J. Good: One <unk>.
Lynn J. Good: Percent increase in our load growth. So we are trending to the higher end of that one five to two and we'll continue to update you. During 'twenty four if we see more opportunities materialize and as Brian said, we'll do a comprehensive update in February.
Shahriar Pourreza: Got it. Okay.
Shahriar Pourreza: I think the other thing I would note given the size of our company.
Shahriar Pourreza: I believe the move from about a half a percent load growth to one five to two is quite strong.
Shahriar Pourreza: And we're proud of that and we'll keep going but I think that metric of 1000 gigawatt hours being about one should help you get a sense of how we're moving.
Brian D. Savoy: So as we head into February's update, appreciate that. And then maybe just one more question for Brian. Brian, obviously, you guys have a kind of perpetual preferred, which has a dividend reset coming, I think in September. What's the plan, I guess, to refinance it? What's better than your numbers?
Speaker Change: Got it okay. So as we head into February as update I appreciate that and then maybe just one more question for Brian Brian. Obviously, you guys have a kind of a perpetual preferred which has a dividend reset coming I think in September what's the plan I guess to refinance it what's embedded in your numbers.
Brian D. Savoy: Sure.
Brian D. Savoy: No, it's a good question, Shahriar, and it's clearly in our financing plan to address that perpetual preferred. And we're going to look at all the options available in preserving the balance sheet support that that product presents, as well as what the market's paying for. You know, we saw some deals yesterday that are encouraging. We'll look at those and other tools as we move towards September. But repricing the preferred at the current rates doesn't make a whole lot of sense, so we're looking at ways to take that out and use other tools.
Brian: No. It's a good question Sharon.
Brian D. Savoy: Clearly in our financing plan to address that perpetual preferred and we're going to look at all the options available and preserving the balance sheet support that that product presents as well as what the market is paying for it and we saw some deals yesterday that are encouraging we will look at those and other tools as.
Brian D. Savoy: We moved towards September, but repricing their preferred at the current rates it doesn't make a whole lot of sense. So we're looking at ways to take that out and use other tools.
Shahriar Pourreza: Okay, perfect. Fantastic, guys. And, Harry, congrats on your first of many earnings calls. Big congratulations. Thanks, guys.
Speaker Change: Okay, perfect Fantastic guys and Harry Congrats on your first of many earnings calls the congrats thanks guys.
Unnamed: Thanks, Sean. Our next question comes from David Arcaro of Morgan Stanley. Please go ahead.
Harry K. Sideris: Thanks, Sean.
David Keith Arcaro: Our next question comes from David <unk> of Morgan Stanley. Please go ahead.
David Keith Arcaro: Oh, hey, good morning. Thanks for joining us.
David Keith Arcaro: Oh, Hey, good morning, Thanks for taking my questions.
Unnamed: Morning, David. Morning, David. If you could elaborate, would be great.
David Keith Arcaro: Good morning, David wondering if you could elaborate.
David Keith Arcaro: I'm wondering how you think about the new EPA rules and how that could affect some of your IRPs, just longer-term resource plans that are in flight right now.
David Keith Arcaro: Good morning, I'm wondering if you're how are you.
David Keith Arcaro: Thinking about the new EPA rules and how that could affect some of your arpus just longer term resorts plans that are in flight right now.
Lynn J. Good: David, thanks. I'll take that.
David Keith Arcaro: Hey, good thanks, I'll take that.
Lynn J. Good: To your point.
Lynn J. Good: We're looking very carefully at the rule, but also looking very carefully at how we meet.
Lynn J. Good: You know, to your point, we're looking very carefully at the rule, but also looking very carefully at how we meet the growth in our service territory while continuing to decarbonize and maintain an eye on affordability and reliability. We have CPCNs in front of North Carolina right now, and those processes will continue over the course of 2024. They're very public.
Lynn J. Good: The growth in our service territory continue to Decarbonize and maintain an eye on affordability and reliability.
Lynn J. Good: We have <unk> in front of North Carolina, right now and those.
Lynn J. Good: He will continue over the course of 2020 for the very public we think that'll be a great opportunity to really.
Lynn J. Good: We think that'll be a great opportunity to really present the case for how we can meet this load with an all-of-the-above strategy. We are also in the process of doing an IRP in Indiana, and we'll reflect the implications of the new rule in that IRP. So I would indicate that we're continuing to study what this might mean. We're a week into it, looking at everything from gas to co-firing to conversions, all with an eye on reliability and affordability. The meeting that's load addressing an aging coal fleet is a part of the formula that we'll consider. I think litigation is something that's also being looked at across the industry because there are a number of questions within the rule, and we're evaluating that as well.
Lynn J. Good: Present, the case for how we can meet this slid within all of the above strategy.
Lynn J. Good: We are also in the process of doing an IOP in Indiana and will reflect the implications of the new rule.
Lynn J. Good: That IOP, so I would I would indicate that we're continuing to study what this might mean, we're a week into it.
Lynn J. Good: Looking at everything from from gas to coal firing to conversions, all with an eye on reliability and affordability and recognizing the meeting have slowed.
Lynn J. Good: Dressing and aging coal fleet is a part of the formula that we will consider.
Lynn J. Good: I think litigation is something that's also being looked at across the industry.
Lynn J. Good: As there are a number of questions within the rule and we're evaluating that as well.
Speaker Change: Got it thanks for that color.
David Keith Arcaro: And then just following up on the topic of load growth and kind of what CAPEX could come from that, could you maybe elaborate on your thinking there as you do find more economic development opportunities and potential upside to the load growth forecast? What does that mean for your capital plan in terms of, you know, could there be further generation? But also, maybe on the T&D side, if you could elaborate on how you're thinking about what T&D expansions and upgrades might come out of what we're seeing in longer-term load growth increases.
Lynn J. Good: And then just following up on the on the topic of load growth and kind of what capex could come from that could you maybe elaborate on your thinking there.
David Keith Arcaro: As you do find more economic development opportunities and potential upside to the load growth forecast what does that mean for your capital plan in terms of.
David Keith Arcaro: Could there could there be further generation, but also maybe on the T&D side. If you could elaborate on how youre thinking about what TNT expansions and upgrades might come out of it.
David Keith Arcaro: What we're seeing in longer term load growth increases.
Brian D. Savoy: No, David, this is Brian. I'll take that.
David Keith Arcaro: No. David this is Brian I'll take that.
Brian: It's a really good question and one we evaluate every single day here at Duke energy as we find.
Brian: Find a way to serve our customers in a reliable and affordable way, we know we're going to need more resources, because we're seeing more demand on the system and it's to your point, it's not just generation, it's T&D investments to an end.
Brian D. Savoy: It's a really good question and one we evaluate every single day here at Duke Energy. As we find a way to serve our customers in a reliable and affordable way, we know we're going to need more resources. We're seeing more demand on the system. And it's like your point, it's not just generation, it's T&D investments too.
Brian D. Savoy: And you know, the teams across Duke Energy evaluate how we're going to put the loads in the best places, as well as when we talk about economic development opportunities, we present customers with the places that have generation capacity and T&D capacities to support them or the modest upgrades that we need. As we look out in time, we see an expanding capex profile. We've guided $73 billion for five years, but over the 10-year plan, $170 to $180 billion, and that contemplates higher resource needs to serve this increasing loan, and we're going to do so in a way that drives growth for our investors, as well as preserves a strong balance sheet.
Brian D. Savoy: The teams across the Duke energy evaluate how we're going to.
Brian D. Savoy: Put the loads in the best places.
Brian D. Savoy: Well when we talk about economic development opportunities, we present customers with them.
Brian D. Savoy: Lasers that have generation capacity and T&D capacity to support them or the modest upgrades that we need as.
Brian D. Savoy: As we look out in time, we see an expanding capex profile, we've guided 73 billion for five years, but over the 10 year plan of $170 million to $180 million and that contemplates higher higher resource needs to serve this increasing loan and we're going to do so that drives growth for our investors as well as pre.
Speaker Change: <unk> has a strong balance sheet and I think like.
Brian D. Savoy: Like I said in Shahriar's question, we want to bring all this together in our next financial update as we roll the plan to 2029, which will have a fullsome view of both capital, load demand, as well as how we're going to finance all that.
Brian D. Savoy: Like I said to <unk> question, we want to bring all this together in our in our next financial update as we roll the plan to 2029 that will have a fulsome view of both capital.
Brian D. Savoy: Low demand as well as how we're going to finance all of that.
Lynn J. Good: David, the one thing I would add is that we have been really successful over the last many years in developing modern regulatory mechanisms for grid investment. And those grid investments are underway in every jurisdiction to really prepare for this generation transition, and that will continue. So you look at our next five years, largely grid investments. And so we'll keep that going at a pace that makes sense. And to just emphasize Brian's point, we have such a wealth of opportunity here in both generation and grid investments that we see sustained growth out of our jurisdictions in a very constructive way, delivering returns to shareholders over a long period of time. So we're excited about what this growth potential represents.
Speaker Change: David The one thing I would add we have been really successful over the last many years in developing modern regulatory mechanisms with great investment and those grid investments are running in every jurisdiction to really prepare for this generation transition and that will continue.
Lynn J. Good: Our next five years largely grid investments and.
Lynn J. Good: And so we'll keep that going at a pace that makes sense and just emphasize bryan's point, we have such a wealth of opportunity here and but.
Lynn J. Good: Generation and grid investment that we see sustained growth out of our jurisdictions in a very constructive way delivering returns to shareholders over a long period of time. So we're excited about what the spread potential represents.
David Keith Arcaro: Okay, great. Very helpful. Thanks so much.
Speaker Change: Okay, great very helpful. Thanks, so much.
Durgesh Chopra: Our next question comes from Durgesh Chopra with Evercore. Your line is open.
Speaker Change: Our next question comes from the desktop World with Evercore. Your line is open.
Durgesh Chopra: Hey, good morning team. Thanks for giving me time. I just have to clarify.
Durgesh Chopra: Hey, good morning team thanks for the time.
Durgesh Chopra: Okay.
Durgesh Chopra: I just have two clarification questions. First, can you remind me in North Carolina how, if any, there are sort of intertwinings between the CPCN process and your IRPs? And then second, the CPCN ads. Will that be incremental to your current CapEx plan, or is that already incorporated into the current CapEx plan? Thank you.
Durgesh Chopra: Hey, good morning.
Durgesh Chopra: Just a.
Durgesh Chopra: Clarification questions first.
Durgesh Chopra: Can you remind in North Carolina.
Durgesh Chopra: Yes.
Durgesh Chopra: Any sort.
Durgesh Chopra: Sort of intertwining between the CCN process in the Rfps.
Durgesh Chopra: And then second.
Durgesh Chopra: The the CPC and ads.
Durgesh Chopra: Would be incremental to your current Capex plan or is that already incorporated into the current Capex plan. Thank you.
Harry Sedaris: Suheera, do you want to talk about the CPCN and IRP processes in the Carolinas? And Durgesh, I'll take the second question.
Speaker Change: So here you want to talk about the CPC on an IRB process in the Carolinas and international I'll take the second question those <unk> investments are in the capital plan.
Brian D. Savoy: Those CPCN investments are in the capital plan.
Harry Sedaris: Yes, Durgesh, good morning. We're in the process of our CIRP proceedings. We expect a hearing in July in North Carolina and in South Carolina in September. We expect an order later this year in December and November for each of those states.
Brian D. Savoy: Yes.
Suheera: Yes. Good morning, we're in the process of our CRP.
Harry Sedaris: Proceedings, well, we expect a hearing in July in North Carolina, and South Carolina.
Harry Sedaris: September and we expect an order later this year in December and November for each of those states.
Harry Sedaris: And we proposed three different pathways, path one, path two, and path three, with the preferred path being path three. This shows a two gigawatt increase from our supplemental filing in January compared to our previous filing. We're still focused on making sure that we have an affordable and reliable plan for the customers of North Carolina while meeting our needs for our carbon reductions. The plans still show that we're going to be out of coal by 2035, and it's adding additional resources, particularly solar and batteries and new gas as well.
Harry Sedaris: And we proposed three different pathways paths, one path to in past three with the preferred past past being passed III.
Harry Sedaris: This is showing a two gigawatt increase from our supplemental filing in January from our previous filing.
Harry Sedaris: We're still focused on making sure that we have an affordable and reliable plan for the customers in North Carolina, while meeting our needs for our carbon reductions the plants still show that we're going to be out of coal by 2035.
Harry Sedaris: And it is adding additional resources, particularly solar and batteries and new gas as well.
Harry Sedaris: We've been through some hearings, and the proceedings will continue this summer, but we feel very comfortable in what we're putting forward to the commissions and look forward to defending our case and talking through it with stakeholders and Rakesh.
Harry Sedaris: We've been through some of the hearings in the proceedings will continue this summer, but we feel very comfortable in what we're putting forth to the commissions and the look forward to defending our case and talking through with stakeholders.
Lynn J. Good: And Rakesh, on the CPCNs, we would expect the IRP hearings to occur and the CPCN hearings to follow, so the timeline that Harry just outlined would have all of this, you know, in front of the Commission in the second half of this year, and so we'll keep you informed every step of the way.
Harry Sedaris: And the cash on the Cds and so we would expect the IOP hearing to occur in the CPC and hearings to follow so the timeline that Harry just outlined.
Lynn J. Good: All of this in front of the commission in the second half of this year and so we will keep you informed every step of the way.
Durgesh Chopra: Awesome. Thank you for that. Just quickly, Lynn, just though, are the IRPs... incremental to the CPCN filings, the gigawatts that you're proposing? I'm thinking the answer is yes. You know, Durgesh...
Speaker Change: Awesome. Thank you for that just just quickly Lynn just though.
Durgesh Chopra: <unk> bees.
Durgesh Chopra: Incremental to the CPC and filings the gigawatt that youre proposing.
Durgesh Chopra: I'm thinking of the answer is yes.
Lynn J. Good: Well, the way this works is the IRP is a multi-year view of generation, and it includes renewables and batteries, energy efficiency, demand response, all, you know, the entire collection of resources necessary to meet load. The CPCN is a process to achieve approval of unique and discrete assets. So these gas plants that are included in the IRP go through a separate proceeding so that we can share cost estimates and the timeline for when we would build those assets. So you should think about the filings as complementary.
Durgesh Chopra: Well the way. This works is the IRT as a multiyear view of generation and it includes renewables and battery.
Lynn J. Good: Since even annually.
Lynn J. Good: Uh huh.
Lynn J. Good: Yes.
Lynn J. Good: Higher collection of resources necessary to meet was the CPC end of the process to achieve approval of unique and discrete asset. So these gas plants that are included in the IRB go through a separate proceeding so that we can share cost estimates in the timeline.
Lynn J. Good: For when we would build those assets. So you should think about the filings are complementary.
Durgesh Chopra: understood. That's what I was getting at with this.
Speaker Change: Understood that's where.
Speaker Change: I was getting at with this okay. Thank you very much I appreciate it.
Speaker Change: Thank you.
Durgesh Chopra: Okay. Thank you very much. I appreciate it.
Durgesh Chopra: The next question comes from Anthony <unk> from Mizuho. Please go ahead.
Speaker Change: Hey, good morning team and Brian No comments on the canes game, one, but just I guess.
Speaker Change: Particularly I guess not fair Anthony.
Durgesh Chopra: It's only one game, though.
Durgesh Chopra: Well aware of that as a range okay.
Speaker Change: Thank you Jami for the rest of the theory.
Speaker Change: This is going to be a brutal I know.
Durgesh Chopra: Yes.
Speaker Change: Just I guess if I could.
Durgesh Chopra: You talked about earlier of maybe the low growth.
Durgesh Chopra: More back end loaded you guys will update you on the fourth quarter call and I guess, if I could think of that and maybe how that maybe translate into earnings growth.
Durgesh Chopra: Is there a balance sheet, where you'd like it to be a target is 14 at the end of 2000 and for you believe youll be there and I know the company is very focused on the balance sheet, but as we think maybe earnings potential is stronger in the back end of the plan will that be an opportunity to give yourself more cushion or you are happy with where you are.
Durgesh Chopra: Were targeting at the end of 'twenty four.
Speaker Change: It's a good question Anthony and.
Durgesh Chopra: We've.
Durgesh Chopra: Mentioned in the Q4 call, 14% SSO for 2024.
Durgesh Chopra: 2014, plus as we look out in time. So we are not we're not going to stay put at 14, we're going to continue to improve it over time.
Durgesh Chopra: Guiding through that we've got the benefit of the North Carolina rate cases. This year next year, we will have the benefit of all the other jurisdictions, Florida, Indiana Piedmont South Carolina. All of these rate actions are underway that will continue to support top line growth, which also then supports the credit.
Durgesh Chopra: And as we look out in the plan.
Durgesh Chopra: I think the potential to earn.
Durgesh Chopra: At the higher end of the range also gives us opportunity to continue to strengthen the balance sheet. So I think we're going to take a balanced approach that provides growth for investors as well as protect our strong balance sheet over time.
Speaker Change: Great. That's all I had thanks for taking the question.
Speaker Change: Thank you. Thank you.
Anthony Crowdle: The next question comes from Anthony Crowdle from Mizzou Home. Please go ahead.
Durgesh Chopra: The next question is from Carly Davenport with Goldman Sachs. Please go ahead. Your line is open.
Anthony Christopher Crowdell: Hey, good morning, Thanks, so much for taking the question.
Anthony Christopher Crowdell: Maybe as you think about your capital plans both from an investment in the grid perspective, and also on new generation have you been seeing anything any constraints from a supply chain perspective, whether it's in procuring income generation kits or transmission equipment that we should be keeping in mind.
Unnamed: Douglas Goldstein, CFP®, Financial Planner & Investment Advisor
Anthony Christopher Crowdell: Currently thanks for that question.
Anthony Crowdle: Not fair, Anthony.
Anthony Crowdle: It's only one game, though, and I'm well aware of that as a Ranger fan. I think you just jinxed yourself for the rest of the series. I know. This is going to be brutal.
Anthony Christopher Crowdell: As we work the capital plan.
Anthony Crowdle: And all of the supply chain challenges since Covid. It has kind of been issue by issue I would say a couple of years ago solar panels, where it was a hot area and we entered into framework agreements over a long period of time to secure our solar panel needs. We also had transformers last year that was a really hot spot is still.
Anthony Crowdle: Just, I guess, if I could, you talked about earlier that maybe the load growth is more back-end loaded. You guys will update it on the fourth quarter call. And I guess if I could think of that and maybe how that maybe translates into earnings growth. Is the balance sheet where you'd like it to be? Your target is 14 at the end of 24. You believe you'll be there. And I know the company's already focused on the balance sheet, but as we think maybe earnings potential is stronger in the back end of the plan, will that be an opportunity to give yourself more cushion, or are you happy with where you're targeting at the end of 24?
Anthony Crowdle: A tight market, but we don't want to work through these with the size and scale of Duke energy and and really partnering with Oems on how we're going to work with them.
Anthony Crowdle: Multiple years in a row and as we look to build generation at scale.
Anthony Crowdle: We're looking at areas like EPC contractors turbine manufacturers and other components to support the generation build and we're going to take a similar approach, but I think what we've learned is that we must partner with one or two suppliers over multiple years to give them certainty on on the revenue side give us certainty on the components and.
Anthony Crowdle: Labor on our side. So it's been a successful model and it's one we want to replicate as we advance the transition.
Speaker Change: And I would add it is getting better, but we've been able to put some processes in place using our scale to be able to pre plan and preorder to really make sure that we have what we need when we need it to keep our investment plans going and as we look forward, we're going to continue to do that and partner like Brian mentioned with our vendors to be able to.
Anthony Crowdle: To stay ahead of the curve, but things are getting better and we're staying ahead of the curve there.
Speaker Change: Got it that's really helpful. Thank you and then maybe just a quick follow up on the balance sheet question can you just update us on where you currently stand and then just relative to the walk that you sort of laid out last quarter or any of the buckets that that bridge the gap of getting to that 14% <unk> to debt level change.
Brian D. Savoy: That's a good question, Anthony. And, you know, as we mentioned in the Q4 call, 14% FFO for 2024. 14 plus, as we look out in time. So we're not going to stay put at 14.
Brian D. Savoy: We're going to continue to improve it over time. And guiding through that, we've got the benefit of the North Carolina rate cases this year. Next year, we'll have the benefit of all the other jurisdictions, Florida, Indiana, Piedmont, South Carolina.
Brian D. Savoy: All these rate actions are underway that will continue to support top-line growth, which also then supports credit. And as we look out in the plan, I think the potential to earn at the higher end of the range also gives us an opportunity to continue to strengthen the balance sheet. So I think we're going to take a balanced approach that provides growth for investors as well as protects a strong balance sheet over time.
Anthony Crowdle: Great. That's all I had. Thanks for taking the question.
Carly Davenport: The next question is from Carly Davenport with Goldman Sachs. Please go ahead; your line is open.
Carly Davenport: Hey, good morning. Thanks so much for taking the questions. Maybe just as you think about your capital plans, both from an investment in the grid perspective and also on new generation.
Carly S. Davenport: <unk> at all relative to what we saw last quarter.
Carly S. Davenport: Currently we really update the <unk> once a year, but we are making progress with the rate cases from North Carolina being the largest single driver of improving <unk> year over year deferred fuel recovery is also on track those those rates were updated the last one happened in December.
Carly S. Davenport: For <unk> North Carolina, So all of the deferred fuel is on track to be fully recovered by the end of this year.
Carly S. Davenport: We're issuing the equity the ATM and drip, we did $100 million in Q1, and we'll continue that throughout the year to get to $500 million by the end of the year and lastly on the second half of the year, we expect to monetize tax credits from the IRI and Thats. The last component. So we are tracking exactly where we want it to be at the end of first quarter end.
Brian D. Savoy: You know, Carly, thanks for that question. You know, as we've worked out the capital plan and all the supply chain challenges since COVID, it's kind of been issue by issue. I would say a couple of years ago, solar panels were a hot area, and we entered into framework agreements over a long period of time to secure our solar panel needs. We also had transformers last year, and that was a really hot spot. It's still a tight market, but we've been able to work through these with the size and scale of Duke Energy and really partner with OEMs on how we're going to work with them for multiple years in a row. And as we look to build generation at scale... We're looking at areas like EPC contractors, turbine manufacturers, and other components that support the generation build, and we're going to take a similar approach.
Brian D. Savoy: And I would add, Carly, it is getting better. But we've been able to put some processes in place using our scale to be able to pre-plan and pre-order to really make sure that we have what we need when we need it to keep our investment plans going. And as we look forward, we're going to continue to do that and partner, like Brian mentioned, with our vendors to be able to stay ahead of the curve. But things are getting better, and we're staying ahead of the curve there.
Carly Davenport: Got it. That's really helpful. Thank you.
Carly Davenport: And then maybe just a quick follow-up on the balance sheet question. Can you just update us on where you currently stand? And then, relative to the path that you sort of laid out last quarter, are any of the buckets that bridge the gap of getting to that 14% FFO to debt level changing at all relative to what we saw last quarter?
Brian D. Savoy: You know, Carly, we really update the FFO once a year, but we are making progress with the rate cases from North Carolina being the largest single driver of improving FFO year over year. Deferred fuel recovery is also on track. Those rates were updated. The last one happened in December for DEP North Carolina, so all the deferred fuel is on track to be fully recovered by the end of this year.
Brian D. Savoy: We're issuing equity, the ATM, and DRIP. We did $100 million in Q1, and we'll continue that throughout the year to get to $500 million by the end of the year. And lastly, in the second half of the year, we expect to monetize tax credits from the IRA. And that's the last component. So we're tracking exactly where we want it to be at the end of the first quarter, and it's looking clear in sight. That's great. Thanks so much.
Brian D. Savoy: Looking clear insight.
Carly Davenport: That's great. Thanks so much for that color. Thank you.
Speaker Change: That's great. Thanks, so much for that color.
Speaker Change: Thank you.
Jeremy Bryan Tonet: And our next question is from Jeremy Tonet with J.P. Morgan. Please go ahead.
Carly Davenport: And our next question is from Jeremy Tonet with J P. Morgan. Please go ahead.
Jeremy Bryan Tonet: Hi, good morning.
Jeremy Bryan Tonet: Thank you Aaron good morning.
Jeremy Bryan Tonet: I just wanted to follow up on the proposed gas additions, as you laid out there, just wondering how you see, I guess, incremental gas blowing into your territories, given the difficulties we've seen in building new pipelines, you know, in different parts of the country. So just wondering how, you know, what you think about this at that point.
Jeremy Bryan Tonet: I just wanted to follow up with the proposed gas additions as you laid out there just wondering how you see I guess incremental gas flowing into your territories given the difficulties that we've seen and building new pipelines.
Jeremy Bryan Tonet: In different parts of the country. So just wondering.
Jeremy Bryan Tonet: How you think about this at that point.
Lynn J. Good: Jeremy, thank you. You know, making sure that we have an adequate supply for any new source of generation is a part of the assignment, and so we have been at work over the course of 2023 and putting in place agreements that we believe will not only continue to strongly support the existing gas in our area but also allow us to expand. And this is something that is closely monitored by the North Carolina Commission and will be by Indiana as well as we continue diversification there.
Speaker Change: Yes, Jeremy Thank you.
Jeremy Bryan Tonet: Making sure that we have adequate supply for any new sorts of generation is a part of the assignment and so we have been at work over.
Lynn J. Good: Over the course of 2023 and putting in place agreements that we believe will not only continue to strongly support the existing gas in our area, but also allow us to expand and this is something that is closely monitored by the North Carolina Commission and will be by Indiana as well as we continue diversification.
Lynn J. Good: But we feel like we've got a credible plan in place, and it'll be executed over the number of years, fully recognizing that it takes a lot of work with stakeholders to not only build the generation but work with our partners who are putting pipeline infrastructure in place to make sure that those stakeholder concerns and needs are being met. And so we're confident we've got a plan in place that we can execute.
Lynn J. Good: <unk> there we feel like we've got a credible plan in place and there will be executed over a number of years fully recognizing.
Lynn J. Good: That it takes a lot of work with stakeholders to not only build the generation, but working with our partners who are putting pipeline infrastructure in place to make sure that those stakeholder.
Lynn J. Good: Concerns and needs are being met.
Lynn J. Good: And so we're confident we've got a plan in place we can execute.
Jeremy Bryan Tonet: Got it. Thank you for that.
Speaker Change: Got it. Thank you for that and then maybe just diving into <unk>.
Jeremy Bryan Tonet: <unk> growth expectations, just wondering if we could go a little bit further I think in the quarter.
Jeremy Bryan Tonet: Commercial was up three and a half industrials were down two and a half if you could touch based on that as well as.
Speaker Change: I guess, what specific things you see materializing over the balance of the year to accelerate the growth as you talk about the back half of 'twenty four.
Brian D. Savoy: And then maybe just diving into load growth expectations, just wondering if we could go a little bit further. I think in the quarter, commercial was up 3.5, and industrials were down 2.5. If you could touch base on that as well as, I guess, you know, what specific things you see materializing over the balance of the year to accelerate the growth as you talk about a back half of a 24 increase.
Brian D. Savoy: Increase.
Brian D. Savoy: Jeremy, it's a good good item to talk through and you know on the on the commercial growth we saw strength across our regions in the commercial sector. Data center growth was was a key driver in that in the quarter and we expect that to continue throughout the year. On the industrial side of things we have some plants that are retooling for new products so they're offline in the first quarter and they signal to us that look this is this is a temporary thing and we're going to be changing changing our lines and by you know Q2 mid Q2 late Q2 we're coming back on in full and we're talking to these customers on a frequent basis to ensure we're we're there to meet their needs when they need it and and they're tracking on on our plan and we kind of expected this trend to continue because we saw this lag in industrial last year and we thought by mid 2024 we'd see the tide turn and then lastly the economic development projects that are coming online in 2024 those were slated for the second half as well and those are tracking as planned so we were on track for our 2% growth in 2024 and we'll keep you apprised as we learn more.
Brian D. Savoy: Jeremy.
Speaker Change: It's a good good item to talk through and.
Jeremy Bryan Tonet: Got it. Thank you for that.
Brian D. Savoy: On the on the commercial growth, we saw strength across our regions.
Jeremy Bryan Tonet: In the commercial sector datacenter growth was a key driver in that in the quarter and we expect that to continue throughout the year.
Jeremy Bryan Tonet: On the industrial side of things, we had some plants that are retooling for new products. So theyre offline in the first quarter and they signaled to us that look this is a temporary thing and we're going to be changing changing our lines and by Q2 mid Q2 late Q2, we're coming back on in full and we're talking to these customers.
Jeremy Bryan Tonet: On a frequent basis to ensure we were there to meet their needs when they need it and they're tracking on our plan and we kind of expected. This.
Jeremy Bryan Tonet: Trend to continue because we saw this lagging industrial last year and we thought by by mid 2024, we'd see the tide turn and then lastly, the economic development projects that are coming online in 2024 those were slated for the second half as well and those are tracking as planned. So we are on track for our 2% grew.
Jeremy Bryan Tonet: In 2024 and we.
Jeremy Bryan Tonet: We will keep you apprised as we learn more.
Speaker Change: Got it thank you for that.
Lydia: This concludes the Q&A session, so I'll hand the call back over to Lynn Good for any closing remarks.
Jeremy Bryan Tonet: This concludes the Q&A session. So I'll hand, the call back over to Linda.
Mark: Hi, Mark.
Lynn J. Good: Lydia, thank you. And thanks to all of you. Thanks for your interest in Duke Energy. As always, we're available for follow-on questions and appreciate your investment. Thanks for joining us today.
Lydia: Olivia Thank you and thanks to all of you. Thanks for your interest in Duke energy as always we're available for follow on questions and I. Appreciate your investment thanks for joining today.
Lydia: This concludes today's call. Thank you for joining us. You may now disconnect your line.
Speaker Change: This concludes today's call. Thank you for joining you may now disconnect your line.
Lydia: [music].
Lydia: Sure.
Lydia: Yes.
Lydia: Okay.
Lydia: Okay.
Lydia: Okay.