Q2 2024 Entergy Corp Earnings Call
Greg: Good morning, my name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to Entergy's second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.
Greg: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. Once again, press star one. And if you'd like to withdraw your question, simply press star one again. Thank you. I'd now like to turn the call over to Bill Abler, Vice President of Investor Relations for Entergy Corporation. Bill, the floor is yours.
Greg: Good morning, my name is Greg and I will be your conference operator today. At this time, I would like to welcome everyone to Entergy's second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. And if you'd like to withdraw your question, simply press star one again. Thank you.
I'd now like to turn the call over to Bill Abler, Vice President of Investor Relations for Intergy Corporation. Bill, the floor is yours.
Bill Abler: Good morning, and thank you for joining us. We'll begin today with comments from Entergy's Chair and CEO, Drew Marsh, and then Kimberly Fontan, our CFO, will review results. In an effort to accommodate everyone who has questions, we request that each person ask no more than two questions.
Bill Abler: Good morning and thank you for joining us.
Speaker Change: We will begin today with comments from Entergy's Chair and CEO, Drew Marsh, and then Kimberly Fontan, our CFO, will review results.
Speaker Change: In an effort to accommodate everyone who has questions, we request that each person ask no more than two questions.
Bill Abler: In today's call, management will make certain forward-looking statements. However, actual results could differ materially from these forward-looking statements due to a number of factors which are set forth in our earnings release, our slide presentation, and our SEC filings. Entergy does not assume any obligation to update these forward-looking statements. Management will also discuss non-GAAP financial information. Reconciliations to the applicable GAAP measures are included in today's press release and slide presentation, both of which can be found in the Investor Relations section of our website. Now, I will turn the call over to Drew.
Speaker Change: In today's call, management will make certain forward-looking statements.
Speaker Change: Actual results could differ materially from these forward-looking statements due to a number of factors which are set forth in our earnings release, our slide presentation, and our SEC filings. Entergy does not assume any obligation to update these forward-looking statements.
Speaker Change: Management will also discuss non-GAAP financial information. Reconciliations to the applicable GAAP measures are included in today's press release and slide presentation, both of which can be found on the investor relations section of our website. And now I will turn the call over to Drew.
Drew Marsh: Thank you, Bill. Good morning, everyone.
Drew: Thank you, Bill, and good morning, everyone, and thank you all for joining us on this busy Earnings Call Day.
Drew Marsh: And thank you all for joining us on this busy earnings call day. In June, we hosted our Analyst Day in New Orleans, and I want to thank all of you who attended in person and listened online then as well. We provided a comprehensive update on our business strategy and discussed the macro drivers behind our unique growth story: Onshored Clean Energy, Electrification, and Technology.
Drew: In June, we hosted our Analyst Day in New Orleans. I want to thank all of you who attended in person and listened online then as well. We provided a comprehensive update on our business strategy and discussed the macro drivers behind our unique growth story.
Drew: Onshoring, Clean Energy, Electrification, and Technology.
Drew Marsh: We also talked about our customer-first approach, which is the cornerstone for achieving outcomes that drive significant long-term value for all our stakeholders, of course, our customers, but also our employees, our communities, and our owners. We continue to make progress toward these outcomes, helping us achieve our near and long-term objectives. Starting with our financial results, today we are reporting strong quarterly adjusted earnings per share of $1.92. Kimberly will go over the details.
Drew: We also talked about our customer-first approach that is the cornerstone for achieving outcomes that drive significant long-term value for all our stakeholders, of course our customers, and also our employees, our communities, and our owners.
Drew: We continue to make progress towards these outcomes, helping us achieve our near and long-term objectives.
Drew: Starting with our financial results, today we are reporting strong quarterly adjusted earnings per share of $1.92.
Drew Marsh: The bottom line is that we remain firmly on track to meet our 2024 guidance. Now, turning to business updates. I am pleased to report that Entergy Louisiana has reached an agreement in principle with the LPSC staff and other parties on its FRP extension. This settlement, subject to LPSC approval, would also resolve several other open matters, including all FRPs prior to the 2023 test year. By settling these matters, Entergy Louisiana will resolve all its outstanding base rate making proceedings.
Drew: Kimberly will go over the details.
Kimberly: The bottom line is that we remain firmly on track to meet our 2024 guidance.
Drew Marsh: As part of this settlement, we will provide $184 million of customer credit, which includes our agreement to increase customer sharing of income tax benefits resulting from the 2016 to 2018 IRS audit. We're also pleased to announce that System Energy Resources, or SIRI, reached an agreement in principle with the LPSC staff on the long-standing litigation at FERC. Pending approval, this settlement substantially resolves the major litigation in theory and removes an ongoing challenge for many of our stakeholders to understand and value.
Kimberly: Now turning to business updates.
Kimberly: I am pleased to report that Entergy Louisiana has reached an agreement in principle with the LPSC staff and other parties.
Drew: on its FRP extension.
Drew: The settlement, subject to LPSC approval.
Drew: but also resolved several other open matters, including all FRPs prior to the 2023 test year.
Drew: By settling these matters, Entergy Louisiana will resolve all its outstanding base rate making proceedings.
Drew: As part of this settlement, we will provide $184 million of customer credits, which includes our agreement to increase customer sharing of income tax benefits resulting from the 2016-2018 IRS audit.
Drew: We're also pleased to announce that System Energy Resources, or SIRI, reached an agreement in principle with the LPSC staff on the long-standing litigation at FERC.
Drew: Pending approval, this settlement substantially resolves the major litigation in theory and removes an ongoing challenge for many of our stakeholders to understand and value.
Drew Marsh: These agreements, as well as other commission approvals earlier this year, including the resilience plan and the process to accelerate the development of renewables, provide important clarity for all our stakeholders and allow Entergy Louisiana, the Commission, and other stakeholders to focus on capturing the significant growth opportunities before us. We appreciate the hard work of all parties to get to this point and look forward to focusing on the future together. We'll provide more information on the Entergy Louisiana settlement when we file the full settlement agreement, which we plan to submit in the coming days. We anticipate the commission will take up both matters at its next business and executive meeting on August 14. Hurricane Beryl made landfall in southeast Texas in early July.
Drew: These agreements, as well as other Commission approvals earlier this year, including the Resilience Plan and the process to accelerate the development of renewables.
Drew: provide important clarity for all our stakeholders and allows Entergy Louisiana, the Commission, and other stakeholders to focus on capturing the significant growth opportunities before us.
Drew: We appreciate the hard work of all parties to get to this point and look forward to focusing on the future together.
Drew: We will provide more information on the Entergy Louisiana settlement when we file the full settlement agreement which we plan to submit in the coming days.
Drew: We anticipate the Commission to take up both matters at its next Business and Executive Meeting on August 14.
Drew Marsh: The storm affected about half of our Texas customers. I first want to thank our customers and community leaders for their understanding and support during restoration. We are honored to serve, and we are once again inspired by our communities coming together in the face of such an event. High winds sustained by barrels uprooted and damaged a significant number of trees, which caused most of the grid damage and customer outages.
Speaker Change: Hurricane Beryl made landfall in southeast Texas in early July.
Drew: The storm affected about half of our Texas customers.
Speaker Change: I first want to thank our customers and community leaders for their understanding and support during restoration. We are honored to serve them.
Drew: Barrel's sustained high winds uprooted and damaged a significant number of trees, which caused most of the grid damage and customer outages.
Drew Marsh: This included many tall trees outside right-of-ways that fell into our transmission and distribution lines. We brought a lot of experience and lessons learned from past storms into this effort, which led to timely, safe, and cost-effective power restoration. Past learnings have also facilitated our communication plan, providing accurate, trusted, and timely updates regarding outages and restoration timelines. We were focused on keeping all stakeholders up to date, with customers, as well as state and local officials, at the top of the list. As we discussed at Analyst Day, when the power is out, the everyday activities of our customers and communities are interrupted.
Drew: We brought a lot of experience and lessons learned from past storms into this effort.
Drew: which led to timely, safe, and cost-effective power restoration.
Drew: Our past learnings also facilitated our communication plan, providing accurate, trusted, and timely updates regarding outages and restoration timelines.
Drew Marsh: This is why a well-prepared operational response, coupled with clear communication, is more important than ever. We're very proud of our employees who keep our customers at the forefront of their minds, working diligently before the storm to learn and prepare, and tirelessly after the storm to safely restore power as quickly as possible. Farrell reminded us of the importance of resilience. We saw firsthand how investment to support growth delivers benefits across multiple dimensions. The ball of our peninsula is a good example.
Drew: This is why a well-prepared operational response, coupled with clear communication, is more important than ever.
Drew: We saw firsthand how investment to support growth delivers benefits across multiple dimensions.
Drew Marsh: To support growth, we built a new elevated substation and installed more than 200 new distribution structures built to modern standards. As expected, these new assets easily withstood Beryl, which improved performance during the storm and supported timely restoration. To further its resilience efforts, Entergy Texas submitted its Future Ready Resiliency Plan, requesting approval for a three-year first phase, estimated to cost $335 million, to maximize benefits while minimizing costs for customers. Roughly $200 million is contingent on a grant from the Texas Energy Fund. The legislation calls for a commission decision within 180 days of filing. Separately.
Drew: To further our resilience efforts, Entergy Texas submitted its Future Ready Resiliency Plan requesting approval for a three-year first phase, estimated to cost $335 million.
Drew: To maximize benefits while minimizing costs for customers, roughly $200 million is contingent on a grant from the Texas Energy Fund.
Drew: The legislation calls for a commission decision within 180 days of filing.
Drew Marsh: Entergy New Orleans held a technical conference last week to further phase one of its plan, and we are targeting a council decision before year end. Entergy's unique and robust growth story was a key theme we highlighted at Analyst Day, and we are making important progress to support growth across our business. For example, we hosted a Southeast Texas Leadership Summit that brought together more than 200 industry, community, and political leaders to discuss collaborative approaches to serve the region's growing energy needs.
Drew Marsh: At the summit, we outlined our Southeast Texas Energy Plan, or Step Ahead Plan, which includes additional generation capacity. Advancing that plan, Entergy Texas submitted its filing requesting a CCN for two new generation resources. Legend Power Station, a 754 megawatt combined cycle combustion turbine to be located in Port Arthur, will be built to ensure sustainability and long-term viability as the plant will be carbon capture enabled and feature hydrogen-capable technology. We're working with customers, assessing their interest in purchasing the clean attributes from carbon capture.
Drew Marsh: While our discussions are in the early stages, customer interest in CCS appears to be strong. Our request also includes Lone Star Power Station, a 453 megawatt combustion turbine to be located in Cleveland, Texas, that will also be hydrogen-capable. The total investment is estimated at approximately $2.2 billion, which includes transmission internet connection costs, as well as financing costs during construction.
Drew: The total investment is estimated at approximately $2.2 billion, which includes transmission and internet connection costs, as well as financing costs during construction.
Drew Marsh: Both plants are expected to be online in the summer of 2028. Also, furthering our step ahead plan, Entergy Texas filed for approval of two owned solar projects that came out of the RFP. The capacity for the proposed additions totals more than 300 megawatts. The first is expected to come online in 2027 and the second in 2028.
Drew: Also furthering our step-ahead plan, Entergy Texas filed for approval of two owned solar projects that came out of RFPs.
Drew: The first is expected to come online in 2027 and the second in 2028.
Drew Marsh: The green attributes from these plants will help meet our customer demands for clean energy. More broadly, clean energy and electrification remain key macro drivers behind growth across our business. Many of our large customers have clean energy goals, and we are expanding our clean energy capacity to support those objectives. To that end, in early June, we signed a joint development agreement that will accelerate the development of up to 4.5 GW of new, Entergy-owned solar generation and energy storage projects, also supporting our renewables expansion.
Drew: The green attributes from these plants will help meet our customer demands for clean energy.
Drew Marsh: And, as I referenced earlier, the Louisiana PSC approved a streamlined and enhanced renewable RFP process to add up to 3,000 megawatts of renewable capacity. This will enable Entergy Louisiana to bring renewable resources online much more quickly, which helps attract new customers to our service area. Technology is another macro driver for our growth. At Analyst Day, we identified 5 to 10 gigawatts of new hyperscale data center potential in our service areas, which is informed by customer discussions.
Drew: Also supporting our renewables expansion, and as I referenced earlier, the Louisiana PSC approved a streamlined and enhanced renewable RFP process.
Drew: to add up to 3,000 megawatts of renewable capacity.
Drew: This will enable Entergy Louisiana to bring renewable resources online much more quickly, which helps attract new customers to our service area.
Drew: At Analyst Day, we identified 5 to 10 gigawatts of new hyperscale data center potential in our service areas, which was informed by customer discussions.
Drew Marsh: We continue to have very active customer and other stakeholder engagement on this front, and the growth potential for all our stakeholders from this driver remains strong. We put our customers first. Our path forward to achieve regulatory outcomes that benefit all stakeholders, excuse me, putting our customers first remains our path forward to achieve regulatory outcomes that benefit all stakeholders. We continue to move steadily through regulatory proceedings. The results of this are evident in the agreement in principle in Louisiana and the filings in Texas that I have already discussed.
Drew: Putting our customers first remains our path forward to achieve regulatory outcomes that benefit all stakeholders.
Drew: Results of this are evident in the agreement in principle in Louisiana and the filings in Texas that I already discussed.
Drew Marsh: In June, Entergy Mississippi's annual FRP filing was approved. We continue to work well with the Mississippi Commission to achieve good outcomes that support our customers and the operating company's credit, which puts Entergy Mississippi in a strong position to bring additional growth to the state, which benefits all stakeholders. In addition, Entergy New Orleans and Entergy Arkansas filed their annual FRPs. We expect new rates to be in effect in September for New Orleans and January for Arkansas.
Drew: In June, Entry Mississippi's annual FRP filing was approved.
Drew: which puts Energy Mississippi in a strong position to bring additional growth to the state, which benefits all stakeholders.
Drew: In addition, Entergy New Orleans and Entergy Arkansas filed their annual FRPs.
Drew Marsh: And finally, our gas LDC sale continues to move along. For Entergy Louisiana, the staff report and recommendation were filed on Tuesday of this week, stating that staff believes the transaction is in the public interest subject to customary conditions. We believe the matter will be taken up by the LPSC on August 14th at its business and executive meeting. For Entergy New Orleans, the hearing is scheduled to begin on September 9th, and we expect a decision from the City Council in early 2025.
Drew: For Entergy Louisiana, the staff report and recommendation was filed on Tuesday of this week.
Drew: We believe the matter will be taken up by the LPSC on August 14th at its business and executive meeting.
Drew: For Entergy New Orleans, the hearing is scheduled to begin on September 9th, and we expect a decision from the City Council in early 2025.
Drew Marsh: We remain on track to close the transaction by the third quarter of 2025. Our commitment to supporting our communities continued to be evident this past quarter. Our efforts were recognized as Entergy was once again a Civic 50 Points of Light honoree. Civic 50 has served as the national standard for corporate citizenship and showcases how leading companies are moving the social impact of community to the core of their business. In the first half of 2024, we made steady progress across key customer operational, regulatory, and financial fronts.
Drew: Our commitment to supporting our communities continued to be evident this past quarter. Our efforts were recognized as Entergy was once again a Civic 50 Points of Light honoree.
Speaker Change: The Civic 50 has served as a national standard for corporate citizenship and showcases how leading companies are moving social impact of community to the core of their business.
Drew: In the first half of 2024, we made steady progress across key customer, operational, regulatory, and financial fronts.
Drew Marsh: We're solidly on track to achieve our objectives for 2024, as well as our longer-term outlook. By continuing to put our customers first, we remain focused on delivering premium value to each of our key stakeholders. I'll now turn the call over to Kimberly, who will review our financial results for the quarter.
Drew: We're solidly on track to achieve our objectives for 2024, as well as our longer-term outlook.
Drew: By continuing to put our customers first, we remain focused on delivering premium value to each of our key stakeholders.
Kimberly Fontan: Thank you, Drew. Good morning, everyone.
Drew: Thank you, Drew. Good morning, everyone. As Drew said, today we are reporting strong results for the quarter that keep us firmly on track to achieve our adjusted EPS guidance for the quarter and for the year.
Kimberly Fontan: As Drew said, today we are reporting strong results for the quarter that keep us firmly on track to achieve our adjusted EPS guidance for the quarter and for the year. As shown on slide 3, our adjusted earnings were $1.92 per share. This result is consistent with our objective of steady, predictable earnings growth. For the quarter, we had two items that were considered adjustments and excluded from adjusted earnings.
Speaker Change: Shown on slide 3, our adjusted earnings were $1.92 per share. This result is consistent with our objective of steady, predictable earnings growth.
Kimberly Fontan: First, we recorded a $1.17 settlement charge as a result of a pension plan liftout. With this liftout, our remaining pension liability is 96% funded as of the end of the quarter. As I mentioned at Analyst A, this is another step in reducing our risk. Second, as Drew discussed, Entergy Louisiana reached an agreement with the LPSC staff to resolve our formula rate plan extension filing.
Drew: First, we recorded a $1.17 settlement charge as a result of a pension plan lift out.
Drew: With this lift-out, our remaining pension liability is 96% funded as of the end of the quarter. As I mentioned at Analyst Day, this is another step in reducing our risk.
Kimberly Fontan: Part of the settlement includes providing $184 million in customer credit. To reflect these credits, we recorded expenses totaling $0.52, which is net of $38 million previously recorded for tax sharing related to the IRS Audit Resolution. Slide 4 details the quarters-adjusted EPS variance. Key drivers include retail sales growth fueled by hotter than normal weather. On a weather-adjusted basis, retail sales increased 2.9% with growth across all customer classes. However, industrial growth was the biggest contributor.
Drew: To reflect these credits, we recorded expenses totaling $0.52, which is a net of $38 million previously recorded for tax sharing related to the IRS Audit Resolution.
Drew: Slide 4 details the quarters-adjusted EPS variances.
Speaker Change: Key drivers include retail sales growth fueled by hotter than normal weather.
Drew: On a weather-adjusted basis, retail sales increased 2.9% with growth across all customer classes.
Kimberly Fontan: Regulatory actions that support our customer-centric investments also contributed to earnings growth. Costs to serve our customers increased, primarily other O&M and depreciation. Interest expense also increased due to higher interest rates and higher debt balances to finance investors.
Drew: Industrial growth was the biggest contributor.
Drew: Regulatory actions that support our customer-centric investments also contributed to earnings growth.
Drew: Costs to serve our customers increased, primarily other O&M and depreciation.
Drew: Interest expense also increased due to higher interest rates and higher debt balances to finance investments.
Kimberly Fontan: Moving to slide five, operating cash flow was higher than the second quarter of last year. Key drivers were the timing of payments and higher customer receipts. Credit and liquidity are shown on slide 6. Our credit metric outlooks, which fully reflect the effects of the regulatory settlements, remain very helpful.
Drew: Moving to slide 5, operating cash flow was higher than second quarter last year.
Drew: Key drivers were the timing of payments and higher customer receipts.
Drew: Credit and liquidity are shown on slide 6. Our credit metric outlooks, which fully reflect the effects of the regulatory settlements, remain very healthy.
Kimberly Fontan: Our net liquidity is strong at $5.9 billion. This includes approximately 800 million of equity forwards that we have already locked in but are not yet settled. While we don't plan to settle these forwards until next year, they are a source of cash if needed. We also issued term debt in the quarter, including $1.2 billion of junior subordinated notes, which are very credit supportive.
Drew: Our net liquidity is strong at $5.9 billion.
Drew: This includes approximately 800 million of equity forwards that we have already locked in but are not yet settled.
Drew: While we don't plan to settle these forwards until next year, they are a source of cash if needed.
Drew: We also issued term debt in the quarter, including $1.2 billion of junior subordinated notes, which are very credit supportive.
Kimberly Fontan: As Drew mentioned, our restoration response to Hurricane Beryl was timely, safe, and cost-effective. We're still refining the details, but our early cost estimate is $75 to $85 million. We plan to recover these costs through normal mechanisms. Turning to slide seven, you can see that we've continued to make good progress on our 2025 to 2026 equity needs. To date, we've completed approximately 60% of our projected equity needs through 2026. As shown on slide 9, we are affirming our adjusted EPS guidance and outlook.
Drew: As Drew mentioned, our restoration response to Hurricane Beryl was timely, safe, and cost-effective. We're still refining the details, but our early cost estimate is $75 to $85 million.
Drew: We plan to recover these costs through normal mechanisms.
Drew: Turning to slide 7, you can see that we've continued to make good progress through our 2025 to 2026 equity needs.
Drew: To date, we've completed approximately 60% of our projected equity needs through 2026.
Drew: As shown on slide 9, we are affirming our adjusted EPS guidance and outlooks.
Kimberly Fontan: For 2024, as we've said, we're firmly on track. Our EPS contribution from volume is expected to be a little higher than our guidance assumption, including the new industrial customers I mentioned last quarter. Weather was hotter than normal this quarter, which created headroom for us to flex our O&M spending plans to achieve better operational outcomes. For the remainder of 2024, there are a couple of quarterly timing considerations that I'd like to
Drew: For 2024, as we've said, we're firmly on track.
Drew: Our EPS contribution from volume is expected to be a little higher than our guidance assumption, including the new industrial customers I mentioned last quarter.
Speaker Change: Weather was hotter than normal this quarter, which created headroom for us to flex our O&M spending plans to achieve better operational outcomes.
Speaker Change: For the remainder of 2024, there are a couple of quarterly timing considerations that I'd like to note.
Kimberly Fontan: The sales growth for the balance of the year is still expected to be largely weighted to the fourth quarter, as additional new large customers are expected to come online later in the year. And we expect as much as 90% of the remaining O&M savings to be achieved in the fourth quarter, given our significant flex spending increases in the fourth quarter last year. As you know, if we experience additional weather outside of normal, we may further flex our spending plan.
Drew: The sales growth for the balance of the year is still expected to be largely weighted to the fourth quarter, as additional new large customers are expected to come online later in the year.
Drew: And we expect as much as 90% of the remaining O&M savings to be achieved in the fourth quarter, given our significant flex spending increases in the fourth quarter last year.
Drew: As you know, if we experience additional weather outside of normal, we may further flex our spending plans.
Kimberly Fontan: We have provided additional quarterly considerations in the appendix of our webcast presentation. We're pleased with the progress we've made, especially the settlements with the Louisiana Public Service Commission that support and solidifies our long-term outlook. With the important clarity we now have in Louisiana, the stage is set for us to capture the unique growth story that we laid out at Analyst Day. And now the Entergy team is available for questions.
Drew: We have provided additional quarterly considerations in the appendix of our webcast presentation.
Drew: We're pleased with the progress we've made, especially the settlements with the Louisiana Public Service Commission that supports and solidifies our long-term outlooks.
Drew: With the important clarity we now have in Louisiana, the stage is set for us to capture the unique growth story that we laid out at Analyst Day.
Speaker Change: And now the Intergy team is available for questions.
Speaker Change: Thanks Kimberly and at this time I would like to remind everyone in order to ask a question press star then the number one on your telephone keypad once again star one and we'll pause just a moment to compile the Q&A roster
Unknown Executive: And we'll pause just a moment to compile the Q&A roster, and it looks like our first question today comes from the line of Shahriar Pourreza with Guggenheim Partners. Shahriar, please go ahead.
Speaker Change: And it looks like our first question today comes from the line of Char Pereza with Guggenheim Partners. Char, please go ahead.
Shahriar Pourreza: Good morning, guys. Good morning. Good morning, Shahriar.
Shahriar Pourreza: Drew, starting off on sort of the regulatory progress in Louisiana at FERC, any further updates there with the updated schedule, and, more importantly, would that be a potential catalyst to maybe revisit capital allocation and the CapEx plans, especially as you settle the FRP and look at new generation deployment under the new 3 gigawatt mechanism? Thanks.
Speaker Change: Hey guys, good morning. Good morning, Char.
Drew: Drew, starting off on sort of the regulatory progress in Louisiana at FERC, any further updates there with the updated schedule and more importantly would that be a potential catalyst to maybe revisit?
Speaker Change: Capital allocation and the CapEx plans, especially as you settle the FRP and look at new generation Deployment under the new three gigawatt mechanism. Thanks
Shahriar Pourreza: Hey Shahriar, could you repeat the first part of your question, which you cut out for just one second?
Char: Hey, Char, could you repeat the first part of your question you cut out for just one second?
Shahriar Pourreza: Yeah, no problem. Any further updates on Louisiana and FERC and that process? That's the first part. And the second part is just, as we're thinking about concluding in those processes, depending on whether there's a global settlement or whatever, is that sort of the catalyst to revisit kind of capital allocation and the CapEx plans, especially as you kind of settle the FRP and look at new generation deployment?
Char: Yeah, no problem. Any further updates on Louisiana and FERC and that process? That's the first part. And the second part is just as we're thinking about concluding in those processes.
Drew: depending if there's a global settlement or whatever. Is that sort of the catalyst to revisit kind of capital allocation and the CapEx plans especially as you kind of settle the FRP and look at new generation deployment? Thanks.
Drew Marsh: Yeah, so we'll let Rod talk about the first part, and I'll let Kimberly talk about the second part.
Speaker Change: I'll let Rod talk about the first part and I'll let Kimberly talk about the second part. In terms of PERF,
Rod: In terms of FERC, as we did in the prior CERI settlements, we actually have to file the CERI settlement. Oh, I've got a mic. Okay, thanks. Can you hear me now, Shahriar? Much better, Rod. Good deal.
Rod: As was the case with prior Siri settlements, we will file the proposed Series Settlement with the LPSC, and, nevertheless, it will still be subject to FERC approval. There will be subsequent filings with the FERC in that regard. So we still have work to do. All of what we've shared is still subject to approval, but it will be a methodical process, and it will begin with what we submit to the LPSC for their consideration on that.
Rod: And I'll just add to that, you know, I think, and this goes to what Kimberly will talk about in a second, the thing that we're pleased about is the nature of the way that these results came together. And, and, yeah, and we talked about this at Analysts State, Shahriar, that our stakeholder engagement strategy was far more deliberate and far more discreet in terms of the stakeholders that we brought together to put us in a position to have this, this, this settlement.
Speaker Change: These results came together and Yeah, and we and we talked about this at analyst a char that our stakeholder engagement strategy was far more deliberate and far more discreet
Rod: The outcomes were a function of each of the interested stakeholders having an opportunity far earlier in the process to weigh in on this conversation. And while we are pleased that we're able to get to this point, our work, our work continues because, as Drew mentioned in his earlier comments, this simply sets the stage for us to be able to execute on capturing the growth with far greater clarity.
Kimberly: having an opportunity far earlier in the process.
Rod: But it is a stakeholder engagement-driven process that includes our regulators, our customers, and policymakers. And, and we're, we're really, we're just at just the beginning and, and certainly excited about what's now possible with clarity on where Louisiana's headed. That same strategy's playing out in the other states. So we can now focus on the growth story.
Kimberly: the growth with far greater clarity, but it is a stakeholder engagement driven process that includes our regulators, includes our customers, and policy makers.
Drew: with clarity on where Louisiana is headed. That same strategy is playing out in the other states, so we can now focus on the growth story.
Kimberly Fontan: And Shahriar, from a capital allocation perspective, certainly we're pleased to be at this point. We'll let the process play out, and then we would expect to give a full update on EI in November, as we typically do.
Shahriar Pourreza: Great, looking forward to that. Lastly, obviously, the 24 assumptions picked up, you talked about low growth, more coming in 4Q, you've got the O&M benefits also kicking in in the back end, sounds like you're kind of ahead of schedule for 24, but I don't want to lead the witness, is there kind of any read through to 25 as we're thinking about bridging from 24 to 25?
Speaker Change: Great, looking forward to that.
Speaker Change: Lastly, obviously the 24 assumptions picked up. You talked about low growth, more coming in 4Q, you've got the O&M benefits also kicking in in the back end.
Speaker Change: Sounds like you're kind of ahead of schedule for 24, but I don't want to lead the witness. Is there kind of any read-through to 25 as we're thinking about bridging from 24 to 25? Thanks.
Kimberly Fontan: Yeah, we shared our outlooks at Analyst Day just a few weeks ago, and I think that is the best place to point out, you know, we continue to be on track for this year, and as Rod said, we're setting ourselves up to continue to deliver on what we provided in our last update a few weeks ago.
Kimberly: Yeah, we shared our outlooks and analysis a few weeks ago and I think that is the best place to point. You know, we continue to be on track for this year and as Rod said, we're setting ourselves up to continue to deliver on what we provided in our last update a few weeks ago.
Shahriar Pourreza: Okay, I appreciate it. Thanks guys. See you soon.
Speaker Change: Okay, I appreciate it. Thanks guys. See you soon.
Char Pereza: All right, thanks, Char.
Speaker Change: And our next question comes from the line of Jeremy Toné with JPMorgan. Jeremy, please go ahead.
Jeremy Toné: Good morning.
Unknown Executive: Now, as a general matter, the settlement addresses the formula rate plan extension and terms and conditions of the go-forward regulatory construct. It also resolves prior issues. There are eight.
Speaker Change: Now, as a general matter, the settlement addresses the formula rate plan.
Speaker Change: Data center opportunity set that sits before you any any.
Speaker Change: <unk> to provide there as far as I guess just.
Jeremy Toné: What potential opportunities do you see the pace of I guess opportunity set if that's accelerating just any color would be great.
Speaker Change: Yeah, we laid out at analyst day.
Speaker Change: There's nothing that we've presented in terms of our outlook included anything other than AWS and as drew alluded to the five to 10.
Drew: Gigawatt opportunity was not something we were speculating around it is in our pipeline because we are having actual conversations with with prospective.
Speaker Change: Customers in that regard, who as we laid out we're taking advantage of a lot of the structural advantages of the Gulf coast, the low energy rates that we provide and certainly the.
Speaker Change: The constructive regulatory environment.
Speaker Change: Thats been thats been supportive of economic development and growth in our regions and so we expect that at the appropriate times will will be able to give details but as was the case in prior customer additions, where we're not giving out or talking about where any specific customer is in the process.
Speaker Change: Until such time that they both we and they are prepared to go public with something but but again where we.
Speaker Change: We're bullish about the prospects because of all the advantages that we laid out at analyst day, and our and on top of that our stakeholder engagement strategy, making sure that all the right stakeholders are at the table quite early in the process.
Speaker Change: Got it thank you for that.
Jeremy Toné: Thanks, Jeremy.
Speaker Change: And our next question comes from the line of David Arcaro with Morgan Stanley David. Please go ahead.
Unknown Caller: Oh, hey, great. Good morning. Thanks so much for taking my question. Good morning.
David Arcaro: Hey, great. Good morning, Thanks, so much for taking my questions. Good.
David Arcaro: Good morning.
David Arcaro: Hey, I was wondering just maybe on the well congratulations on all the progress that youre, making in in these proceedings I was curious on the CRE settlement is that consistent with the others.
Speaker Change: With the other commissions settlements.
Speaker Change: In terms of like the allocation.
Speaker Change: Or a proportional split to Louisiana.
Unknown Executive: The short answer is yes. The series settlement that's proposed is consistent with the settlement constructs in the other jurisdictions, Mississippi, Arkansas, and New Orleans.
Speaker Change: The short answer is yes.
Speaker Change: Series settlement that's proposed.
Speaker Change: Consistent with the.
David Arcaro: With the settlement construct in the other jurisdictions, Mississippi, Arkansas, and New Orleans, Yes.
Speaker Change: Okay, great understood.
Speaker Change: And then I was wondering just considering the that settlement in the Louisiana FRP, how do those line up against your.
Speaker Change: Earnings projections here does that.
Speaker Change: Shifts or solidify where you are within the range and then also on the cash flow side of things.
Speaker Change: Is this consistent with what you would've expected in terms of the cash flow forecast going forward.
Kimberly Fontan: Yeah, thanks, David. The settlements and the for both settlements are all considered in both our EPS and our cash flow outlooks that we're affirming today. So I would think about that from that perspective.
Jeremy Toné: Yes, thanks, David the settlements in.
Speaker Change: For both settlements are all considered in our both our EPS and our cash.
Speaker Change: Cash flow outlooks that we're affirming today, so I would think about that from that perspective.
Unknown Caller: All right. Sounds good. Thanks so much.
David Arcaro: Alright sounds good thanks, so much.
David Arcaro: Thanks, David.
Speaker Change: And our next question comes from the line of Paul Zimbardo with Jefferies. Paul. Please go ahead.
Speaker Change: Hi, Good morning, Tim Good morning, Good morning, Paul.
Paul Zimbardo: Yes, no very great to see the productive settlement talks and I know you would all be hard at work while it was hanging out on the beach. So good to see that one of those two.
Paul Zimbardo: I just got two totally unrelated questions. The first is on the renewables RFP updates could you see more utility owned assets. There I know that's been a priority for you.
Speaker Change: Is there a good way to think about and kind of measure the progress as we go forward on these RFP is about like how much is embedded in the plan versus kind of upside to the plan.
Speaker Change: Yes, we reshaped our capital view here.
Speaker Change: A few weeks ago.
Speaker Change: Gave you sort of owned renewables and I believe there was a slide that also showed the breakout there and so as we go through the Rfps will be able to see as they're announced what comes through there and we'll provide periodic updates.
Speaker Change: In other places about how those are performing.
Speaker Change: And we will wait.
Jeremy Toné: We would expect to have.
Jeremy Toné: A large RFP in the fall.
Jeremy Toné: Louisiana.
Unknown Caller: Okay, okay, I'll stay tuned for that. And then the other was just on hardening. I know you've been very vocal for years about hardening. I just want to see if there's any kind of potential amendments, changes in philosophy for the Texas plan. I know you have phase one in there, whether it's an amendment to phase one, or a pull forward of your thoughts for phase two, just any perspective you could provide
Speaker Change: Okay, Okay, I'll stay tuned for that.
Speaker Change: And then the other was just on hardening I know you've been very vocal for years about hardening I just wanted to see if theres any kind of <unk>.
Speaker Change: And that meant changes in philosophy for the Texas plan I know you have phase one in there whether it's an amendment phase one or pull forward of your thoughts for phase II, just any perspective, you could provide.
Speaker Change: Yes, that's a good question so yes.
Speaker Change: We've been thinking about this in terms of sort of where we were pre barrel post barrel.
Speaker Change: Certainly whenever you have a storm you reflect on where you are and what youre doing and those kinds of things pre barrel. Yes, we have a plan that we had submitted in Texas, Our resiliency plan and it's based on what the current rules and legislation that was introduced a couple of years ago.
Unknown Executive: Pre-barrel, you know, we have a plan that we have submitted in Texas, a resiliency plan, and it's based on, you know, the current rules and legislation that were introduced a couple of years ago. And so it reflects those priorities.
Speaker Change: And so it reflects those priorities and there are as we've talked about there are a couple of things that we wanted to see in the legislation previously that we weren't able to get again, namely around transmission being included and also our ability to accelerate the replacement of existing assets by getting a return of and on if we don't get that.
Unknown Executive: And there are, as we've talked about, there are a couple of things that we wanted to see in the legislation previously, but we weren't able to get them in, namely around transmission being included, and also our ability to accelerate the replacement of existing assets by getting return up and on. You know, if we don't get that return on, then it's harming our credit if we try to accelerate. So we have a more measured pace.
Speaker Change: Turn on.
Speaker Change: Then it's harming our credit if we try to accelerate so we have a more measured pace.
Unknown Executive: Having said that, you know, now we've made the filing, and now we are post-barrel. And, you know, the opportunity is for us to engage our stakeholders to figure out if this is the plan that we want to stick with, or if there is a different plan that we want to go with. So it's now open to conversation, and we're excited about where that might go. And, of course, we'll have another opportunity coming up in the legislative session as well to potentially address some of the things that we weren't able to address last time. And with that, I'll pass it over to Ron to see what he thinks.
Speaker Change: Having said that now we've made the filing and now we are opposed barrel and the opportunity is for us to engage our stakeholders to figure out. If this is the plan that we want to stick with or if there is a different plan that we want to go with so it's now open for conversation and we're excited about where that might go.
Speaker Change: Of course, we'll have another opportunity.
Speaker Change: Coming up in the legislative session as well.
Speaker Change: To potentially address some of the things that we weren't able to address last time.
Rod: I would just reiterate the point that Barrow provides an opportunity to revisit the public policy backdrop to our capital plans. Not only just in Texas, as Texas as a state revisits the resiliency conversation with the recurrence of Barrow, but other jurisdictions are certainly paying attention to some of the lessons learned as well. And while Louisiana is well on its way with its resiliency plan, where so much of the attention has been paid of late, through reference to New Orleans and its ongoing conversations, and we know empirically there that they were paying close attention to the experiences in Houston.
Speaker Change: With that I'll pass it over to Ron to see what else yet.
Ron: Just reiterate the point that that barrel provides an opportunity to revisit.
Ron: The public policies policy backdrop to our to our capital plans and and not only just in Texas is Texas is a state.
Speaker Change: Revisits, the resiliency conversation with the recency of a barrel, but other jurisdictions are certainly paying attention to some of the lessons learned as.
Speaker Change: As well and while Louisiana is well on its way.
Ron: With its resiliency plan, where so much of the attention has been paid of Lake drew reference New Orleans, and its ongoing conversations and we know empirically there they were paying close attention to the experiences.
Ron: Houston.
Rod: And it is an opportunity for us both at the technical conference, as well as in our ongoing conversations with the Council between now and the end of the year to revisit the scale, scope, and efficacy, because we're still very much in the middle of a storm season. So the unfortunate storm, from a customer standpoint, provides an opportunity for the states and other stakeholders to revisit the resiliency conversation with whatever new information or lessons learned from Barrow.
Ron: And it is an opportunity for us both at the technical conferences as well as our ongoing conversations with the with the council between now and the end of the year to revisit.
Ron: The scale scope and efficacy because we're still very much in the middle of a storm season. So.
Ron: The unfortunate.
Ron: Storm from a customer standpoint provides an opportunity for the states and other stakeholders to revisit the resiliency conversation with with whatever new information of lessons learned from Baird.
Ron: Okay.
Unknown Caller: Great. Now, thank you both very much for the color.
Speaker Change: Great. Thank you both very much for the color.
Ron: Okay. Thanks, Paul Thanks, Paul.
Michael <unk>: And our next question comes from the line of Michael <unk> with Evercore ISI Michael. Please go ahead.
Michael <unk>: Hi, Thanks for taking my questions.
Speaker Change: Good morning, the industrial.
Unknown Caller: On industrial sales growth specifically, just wondering where you are tracking for the year. I know you expect new customers, you know, in the fourth quarter. Are all these customers on track? And, you know, just trying to get a sense of where you stand versus your long-term, you know, eight to nine percent industrial sales growth that way.
Michael: On the industrial sales growth specifically, just wondering where you are tracking for the year I know you expect new customers in the fourth quarter are all of these customers on track.
Speaker Change: Just trying to get a sense of where you stand versus your long term.
Speaker Change: <unk> percent to 9% industrial sales growth outlook.
Speaker Change: Yes, we're still on track through the end of the year for what we've provided about 4% for the full year with <unk>.
Ron: Most of that coming late in the year. There are couple of large industrials that we expect to come on we do have those customers are on minimum bill type contracts that.
Ron: If they are delayed we still have some protection from a from.
Ron: From a bottomline perspective, because of how they're contracted and we believe we're still on track and then we continue to see strong pipeline throughout the forecast period.
Michael: That supports that growth trajectory that you referenced.
Unknown Caller: And then secondly, for me on the pension lift out, just wondering how much you're reducing the volatility, you know, of your pension plan, the pricing you got versus PAR, and if you see an opportunity to do more lift out.
Speaker Change: Great. Thanks, and then secondly for me on the pension lift out.
Speaker Change: Just wondering how much you're reducing the volatility of your pension plan. The pricing you got versus par and if you see opportunity to do more of lift outs.
Kimberly Fontan: Yeah, we were pleased with the outcome of that lift out. As I said, the net pension plan is funded now at 96%, and we continue to find ways to reduce volatility. We use smoothing mechanisms in our regulatory jurisdictions to help reduce that volatility as those costs on the regulated side are recovered through rates. As far as whether we could do another pension lift-out, obviously, that would have to, the math on that and the ability to execute on that would have to work, but we think that we are in a good place with where we are currently and what we've done to de-risk our pension plan.
Speaker Change: Yes, we were pleased with the outcome of that lift out as I said the net pension plan is now at 96% and we continue to find ways to reduce volatility we use smoothing mechanisms in our regulatory jurisdictions too.
Ron: Reduce that volatility as those costs around that.
Michael: Regulated side are recovered through rates as far as whether we could do another kington lift out obviously that would have done the math on that and the ability to execute on that would have to work that we think that we are in a good place with where we are currently in what we've guided to REIT de risk our pension plans.
Unknown Executive: In the appendix, there's a sensitivity chart for pensions, which is 25 basis points for every 25 basis points plus or minus a penny. That's kind of what our sensitivity is at this point, which is a lot lower than where it used to be to Kimberly's point.
Michael: Great.
Speaker Change: The appendix.
Ron: The appendix there is a sensitivity chart for pension, which is 25 basis points for every.
Kimberly: For every 25 basis points, plus or minus a penny is kind of what our sensitivity is at this point, which is a lot lower than where it used to be to kimberly's point.
Unknown Caller: Great, thanks for taking my questions.
Speaker Change: Great. Thanks for taking my questions.
Speaker Change: Great. Thanks, Michael.
Ryan Levine: And our next question comes from the line of Ryan Levine with Citi. Ryan, please go ahead.
Speaker Change: And our next question comes from the line of Ryan Levine with Citi. Ryan. Please go ahead.
Unknown Caller: Hi everybody. Regarding the lessons learned from Beryl, what do you think is the best way to address the issues around vegetation outside of your right-of-ways, hitting electric lines in Texas and more broadly in your service territory? Any color or initial thoughts around how to address that potential problem?
Ryan Levine: Hi, everybody.
Ryan Levine: Regarding the lessons learned from barrel what do you think is the best way to address the issues around vegetation outside you're right away is hitting electric lines in Texas and more broadly in your service territory any color or initial thoughts around how to address that potential problem.
Rod: Yeah, it's Rod. The best way to address it is to be proactive and to communicate. It's embedded in our capital plan that has been across jurisdictions. It's also part, not only of our reliability capital plan but also of the resiliency capital plan. That's what's different than our normal reliability conversation, but we've been, particularly in the areas where we serve in South Louisiana and certainly Southeast Texas, vegetation has long been both a challenge and an opportunity for us. And I think from a regulatory construct perspective, and I think Drew alluded to this in his comment.
Rod: Yes, it's rod.
Speaker Change: Best way to address it is to be proactive and to communicate its embedded in our.
Speaker Change: Our capital plans and has been across the jurisdictions. It's also part not only of our reliability.
Speaker Change: Reliability capital plan, but also the the resiliency capital plan and the conversation for us around stakeholder engagement includes making it clear to our stakeholders exactly how those investments are benefiting.
Speaker Change: Benefiting customers.
Speaker Change: The opportunity we have here is to accelerate.
Speaker Change: The asset component of resiliency, that's what's different than our normal reliability conversation, but we've been particularly in the areas, where we serve in south Louisiana.
Speaker Change: Certainly south southeast, Texas vegetation has long has long been both a challenge and an opportunity for us.
Speaker Change: And I think from a regulatory construct perspective, but I think drew alluded to this in his comments.
Rod: What really created the problem for customers in Hurricane Barrow were trees outside of the right-of-way. But what do we mean by right-of-way? That is the area from where our facilities are situated. What's the area? How many feet outside of where our facilities exist? Do we have the capacity to trim those trees or vegetation, as the case may be? And I think when you're paying attention to the regulatory processes in Louisiana and Texas and beyond, I think you'll hear more of a conversation around extending the right-of-way, allowing us to trim in a further area surrounding where our facilities are located to provide greater margin for when those winds come and those trees and other vegetation get into the facilities that disrupt service for customers.
Speaker Change: What really what really created the problem.
Speaker Change: For customers in our gene barrel, where trees outside of the right of way what do we mean by right of way that is the area.
Drew: From where our facilities are situated.
Speaker Change: What's the the.
Speaker Change: Area, that's how many feet outside of a warehouse facilities exist do we have the capacity.
Speaker Change: Two two.
Rod: To trim those trees or vegetation as the case may be.
Speaker Change: When you.
Speaker Change: Paying attention to the regulatory processes in Louisiana, Louisiana, and Texas and beyond.
Speaker Change: I think you'll hear more of a conversation around extending the right always allowing us to trim.
Speaker Change: And a further area surrounding where our facilities are located to provide greater margin for when those wins come in those trees and other vegetation gets into.
Speaker Change: It gets into the facilities that disrupt service for customers.
Unknown Executive: and the Capitol. You know, when we go back and we build to modern standards, those, There is the potential to widen the right-of-ways or deal with that. But if you were able to go from an H-frame transmission structure to a vertical transmission structure, that does reduce the target area a little bit for the trees that come from outside the right-of-way. It's not perfect.
Speaker Change: And the capital.
Speaker Change: When we go back and we build to modern standards those.
Speaker Change: Then there is the potential to widen right of ways or deal with that but.
Speaker Change: If you were able to go from a and H frame transmission structure to vertical transmission structure that does reduce the target area a little bit for the trees that they come from outside the right away, it's not perfect because like you said.
Unknown Executive: Like Robert said, you've got to go trimming. You may need to widen the right-of-ways because those trees are pretty tall, and you just don't have that many feet in a lot of areas, in our conservative territory, in particular. A lot of tall pine trees are out there. But some of it can be mitigated with design and acceleration of resilience investments.
Speaker Change: So you got to go through maybe that you may need to widen the right away because of the trees are pretty tall and you just don't have that many feet.
Speaker Change: And a lot of areas in our service territory in particular, a lot of tall pine trees out there but.
Unknown Executive: So some of it can be mitigated with.
Speaker Change: With design.
Speaker Change: And acceleration of resilience investments.
Unknown Caller: on the expansion of right-of-ways. Would that require a legislative solution, or are there other mechanisms to be able to effectuate that stated objective?
Speaker Change: On the expansion of right of ways.
Speaker Change: Would that require a legislative solution or is there other mechanisms to be able to effectuate that stated objective.
Unknown Executive: And we'd have to get permission from the commission to extend the right-of-way. That's basically rulemaking that sort of sets the terms and conditions under which we operate under our franchise. And so that is a commission-by-commission, state-by-state conversation. But yes, we would go to the commission to seek an expansion of the Existing Right-of-Ways.
Speaker Change: And we'd.
Speaker Change: We'd have to get permission from the commissions to extend the right away.
Speaker Change: Basically rulemaking that sort of sets the terms and conditions.
Speaker Change: Under which we operate under a franchise and so that is a commission by commission state state by state conversation, but but yes, we would go to the commission to seek an expansion of the <unk>.
Speaker Change: The existing right of ways, and then maybe even a right away by right away.
Unknown Executive: And then maybe even a right-of-way-by-right-of-way conversation. We may have to go back to each individual right away and renegotiate.
Speaker Change: On vacation.
Speaker Change: We may have to go back to each individual that's right away and renegotiating.
Speaker Change: Okay, and then just one last on this in terms of the.
Speaker Change: The length of your right away is there an average.
Speaker Change: Number that you're citing.
Speaker Change: 18 inches for one of your peers.
Speaker Change: Yes, do you see that bearing geographically in terms of the distance that you have in <unk>.
Speaker Change: Certain high risk locations.
Unknown Executive: Yeah, that's a that's a jurisdiction by jurisdiction conversation, but it's usually articulated.
Speaker Change: Numbers of sheet away from <unk>.
Speaker Change: From existing facilities and that's on top of.
Unknown Executive: What I'm sure is going to be a conversation about, you know, more resilient poles that hold up better, not just the tree trimming around the facilities, but remember that resiliency is about more resilient facilities themselves that can do a better job of withstanding wind, not just wind, but the trees themselves. Yes, it's usually in feet and jurisdiction by jurisdiction. And urban versus rural, right? I mean, we have, in the city of New Orleans, some pretty tight right away elements and tree trimming requirements, not unlike some other urban environments. So we're very familiar with some of those challenges.
Speaker Change: I'm sure, it's going to be a conversation about.
Speaker Change: More resilient polls that that hold up.
Speaker Change: Better not just the tree trimming around the facilities, but remember that resiliency is about more resilient facilities are themselves that.
Speaker Change: That could do a better job of.
Speaker Change: Of withstanding.
Speaker Change: When not just wind, but the trees themselves.
Speaker Change: It's usually in feet and jurisdiction by jurisdiction right.
Speaker Change: Urban versus rural right I mean, we have in the city of New Orleans, some pretty tight right away elements and tree trimming requirements not unlike.
Unknown Executive: Some other urban environment. So we're very familiar with some of those challenges.
Speaker Change: Thanks for the color.
Unknown Caller: Absolutely. All right.
Speaker Change: Absolutely alright, thank you Ryan.
Travis Miller: Thank you, Ryan. And our final question today comes from the line of Travis Miller with Morningstar. Travis, please go ahead.
Speaker Change: And our final question today comes from the line of Travis Miller with Morningstar Travis. Please go ahead.
Travis Miller: Thank you.
Travis Miller: Good morning. For the AWS facility, what type of regulatory approvals or filings or anything else related to that are necessary before or to get continued shovels in the ground?
Travis Miller: Good morning.
Travis Miller: On the AWS facility, what type of regulatory approvals, our filings or anything else related to that are necessary before or to get continued.
Speaker Change: Continued shovels in the ground.
Unknown Executive: You know, one of the things that we talked about at Analyst Day and before was one of the big advantages that allowed us to move at the speed of their expectations was getting pre-approval. So in order for us to put shovels in the ground, the Mississippi Commission, with the support of the Mississippi Legislature, has already pre-approved us. The CCN process in order for us to begin the design build out to serve AWS.
Travis Miller: Sure.
Speaker Change: One is we talked about this at analyst day and before one of the.
Speaker Change: One of the big advantages that that allowed us to move.
Speaker Change: At the at the speed of their expectations was getting pre approvals. So in order for us to to put shovels in the ground the Mississippi Commission.
Speaker Change: With the support of the Mississippi Legislature have already preapproved.
Unknown Executive: The CCN process in order for us to.
Unknown Executive: To begin the the design build out to serve AWS.
Unknown Executive: Okay, and was there a CapEx or a rate base number associated with that?
Speaker Change: Okay and was there a capex or a rate base number associated with that.
Unknown Executive: We haven't given a specific number associated with that customer. You can see the update at year end and that there are additional renewables, for example, for Mississippi to support the clean energy associated with that customer, but we haven't broken out a specific capex for that specific customer. Okay.
Speaker Change: We haven't given a specific number associated with that customer you can see the updated.
Unknown Executive: At year end and that Theres additional renewables for example for Mississippi to support the clean energy associated with that customer, but we haven't broken out a specific capex for that specific customer.
Speaker Change: And that wasn't part of the CCN.
Roderick: No, those search...as Roderick...
Unknown Executive: Okay.
Erika: Thanks, Erika as Rod said from CCM perspective that was handled three and working with that with the peak or with the Mississippi Public Service Commission.
Speaker Change: State as well.
Travis Miller: Got it. Okay. And then real quick, you mentioned an answer to an earlier question about legislative session potential around some barrels and other Storm Related Issues. What are the possible outcomes? Legislatively, were you thinking about that, or did I misinterpret that?
Speaker Change: Got it Okay, and then real quick you had mentioned in answer to an earlier question about.
Travis Miller: Legislative session.
Speaker Change: Potential around some barrel another.
Speaker Change: Norm related issues.
Speaker Change: The possible outcomes legislatively or what are you thinking about there or did I misinterpret that.
Unknown Executive: No, you heard me correctly, and I think Drew also alluded to it in Texas. The legislative session for us in the last couple of years has been around allowing, giving the Commission of Texas the ability to do rulemaking to facilitate resiliency spending. And the point that Drew made was that in the last legislative session, which is every odd year in Texas, which would have been the 23rd session, we, along with other stakeholders in the state of Texas, made a lot of headway to facilitate resiliency spending.
Speaker Change: You heard me correctly I think drew drew also alluded to it in Texas.
Speaker Change: The legislative session for us in the last couple of years has been around allowing giving the commission of Texas the ability to do rulemaking to facilitate.
Drew: You can see spend and the point that drew made was that in the last legislative session, which is every odd year in Texas, which would have been the 'twenty three session.
Unknown Executive: We along with others other stakeholders in the state of Texas made a lot of headway to facilitate resiliency spin, but there were some items like.
Unknown Executive: But there were some items, like the accelerated replacement of transmission facilities as part of the resiliency plan, that didn't get addressed in the way we thought would have been ideal. And it's an opportunity for us to go back in the 25 legislative session with the support of the Commission and other stakeholders in Texas to revisit, revisit that legislation that would add on or complement what Texas has already done to facilitate the accelerated resiliency spending by you.
Speaker Change: The accelerated replacement of transmission facilities as part of the resiliency plan that didn't get addressed in the way in which we thought would have been would have been ideal and it's an opportunity for us to go back.
Unknown Executive: The 25 legislative session with the support of the commission and other stakeholders in Texas to revisit.
Speaker Change: Revisit that legislation that would add on complement what Texas already done to facilitate <unk>.
Speaker Change: Celebrated resiliency spin by utilities.
Travis Miller: Okay, got it. So it was just Texas in terms of the comment about legislation. That's correct. Okay, got it. Thanks so much. Appreciate it.
Speaker Change: Okay got it so it was just Texas in terms of the comment about legislative.
Speaker Change: Correct, Okay got it thanks, so much I appreciate it.
Greg: Thank you. Thanks, Travis. And there are no further questions at this time. Mr. Abler, I will now turn the call back over to you. Bill
Speaker Change: Thank you alright, thanks Travis.
Greg: And there are no further questions at this time, Mr. Abler I will now turn the call back over to you Bill.
Bill Abler: Thank you, Greg, and thanks to everyone for participating this morning.
Bill Abler: Thank you, Greg and thanks to everyone for participating this morning, our quarterly report on Form 10-Q is due to the SEC on August nine and provides more details and disclosures about our financial statements events that occur prior to the date of our 10-Q filing that provide additional evidence of conditions that existed at the date of the balance sheet would be.
Speaker Change: Reflected in our financial statements in accordance with generally accepted accounting principles also as a reminder, we maintain a web page as part of <unk> Investor Relations website called regulatory and other information, which provides key updates of regulatory proceedings and important milestones on our strategic execution, while some of this.
Bill Abler: Our quarterly report on Form 10-Q is due to the SEC on August 9th and provides more details and disclosures about our financial statements. Events that occur prior to the date of our 10-Q filing that provide additional evidence of conditions that existed at the date of the balance sheet would be reflected in our financial statements in accordance with generally accepted accounting principles. Also, as a reminder, we maintain a webpage as part of Entergy's Investor Relations website called Regulatory and Other Information, which provides key updates on regulatory proceedings and important milestones on our strategic execution. While some of this information may be considered material information, you should not rely exclusively on this page for all relevant company information. And this concludes our call. Thank you very much.
Bill Abler: Information may be considered material information you should not rely exclusively on this page for all relevant company information and this concludes our call. Thank you very much.
Bill Abler: Yes.
Bill Abler: Okay.
Bill Abler: [music].
Speaker Change: Yeah.
Bill Abler: [music].
Bill Abler: Yes.
Bill Abler: Yes.
Bill Abler: [music].
Bill Abler: Yes.
Bill Abler: [music].