Q2 2024 Pinnacle West Capital Corp Earnings Call

Operator: Good morning everyone, and welcome to the Pinnacle West Capital Corporation 2024 Second Quarter Earnings Conference Call. At this time, all participants have been placed in a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Amanda Ho. Ma'am, the floor is yours.

Operator: Good morning, everyone, and welcome to the Pinnacle West Capital Corporation, 2024's second quarter earnings conference call.

Speaker Change: Good morning everyone, and welcome to the Pinnacle West Capital Corporation 2024 Second Quarter Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation.

Operator: At this time, all participants have been placed on it, listen-only mode, and we will open the floor for your questions and comments after the presentation.

Amanda Ho: It is now my pleasure to turn the floor over to your host, Amanda Ho. Ma'am, the floor's yours. Thank you, Matthew. I would like to thank everyone for participating in this conference call and webcasts to review our second quarter, 2024 earnings, recent developments, and operating performance.

It is now my pleasure to turn the floor over to your host, Amanda Ho. Ma'am, the floor is yours.

Amanda Ho: Thank you, Matthew. I would like to thank everyone for participating in this conference call and webcast to review our second quarter 2024 earnings, recent developments, and operating performance. Our speakers today will be our Chairman and CEO, Jeff Guldner, and our CFO, Andrew Cooper. Ted Geisler, APS President, Jacob Tetlow, Executive Vice President of Operations, and Jose Esparza, Senior Vice President of Public Policy, are also here with us. First, I need to cover a few details with you.

Amanda Ho: Thank you, Matthew.

Amanda Ho: I would like to thank everyone for participating in this conference call and webcast to review our second quarter 2024 earnings, recent developments, and operating performance. Our speakers today will be our Chairman and CEO, Jeff Guldner, and our CFO, Andrew Cooper. Ted Geisler, APS President, Jacob Tetlow, Executive Vice President of Operations, and Jose Esparza, Senior Vice President of Public Policy, are also here with us.

Amanda Ho: Our speakers today will be our Chairman and CEO, Jeff Guldner, and our CFO, Andrew Cooper.

Amanda Ho: Ted Geisler, APS President, Jacob Tetlow, Executive Vice President of Operations, and Jose, as far as the Senior Vice President, Public Policy, are also here with us.

Amanda Ho: First, I need to cover a few details with you. The slides that we will be using are available on our Investor Relations website along with our earnings release and related information. Today's comments and our slides contain four looking statements based on current expectations, and actual results may differ materially from expectations.

Amanda Ho: The slides that we will be using are available on our investor relations website, along with our earnings release and related information. Today's comments and our slides contain forward-looking statements based on current expectations, and actual results may differ materially from those expectations. Our second quarter 2024 Form 10-Q was filed this morning. Please refer to that document for forward-looking statements, cautionary language, as well as the risk factors and mDNA sections, which identify risks and uncertainties that could cause actual results to differ materially from those contained in our disclosures. A replay of this call will be available shortly on our website for the next 30 days. It will also be available by telephone through August 8, 2024. I will now turn the call over to Jeff.

Speaker Change: First, I need to cover a few details with you. The slides that we will be using are available on our investor relations website along with our earnings release and related information. Today's comments and our slides contain forward-looking statements based on current expectations and actual results may differ materially from expectations.

Amanda Ho: Our second quarter, 2024 form 10Q with file this morning. Please refer to that document before looking statements, cautionary language, as well as the risk factors and MDNA section, which identify risk and uncertainties that could cause actual results to differ materially from those contained in our disclosures.

Speaker Change: Our second quarter 2024 Form 10-Q was filed this morning. Please refer to that document for forward-looking statements, cautionary language, as well as the risk factors and mDNA sections, which identify risks and uncertainties that could cause actual results to differ materially from those contained in our disclosures.

Amanda Ho: A replay of this call will be available shortly on our website for the next 30 days. It will also be available by telephone through August 8th, 2024.

Speaker Change: A replay of this call will be available shortly on our website for the next 30 days.

Jeff Guldner: I will now turn the call over to Jeff. Great. Thanks, Amanda. And thank you all for joining us today. Second quarter, financials were positively impacted by a number of thanks to the implementation of new customers, whether in increased sales growth.

Speaker Change: It will also be available by telephone through August 8, 2024. I will now turn the call over to Jeff. Great. Thanks, Amanda. And thank you all for joining us today. Second quarter financials were positively impacted by a number of things, the implementation of new customers.

Jeffrey Guldner: Great, thanks Amanda. And thank you all for joining us today. Second quarter financials were positively impacted by a number of things, including the implementation of new customers, weather, and increased sales growth. Before Andrew discusses the details of our second quarter results, I'll provide a few updates on recent operational and regulatory developments. Starting with our operations, as we progress through the summer season, I'm really proud to say our team continues to excel in delivering reliable service to our customers.

Jeff Guldner: Before Andrew discusses the details of our second quarter results, I'll provide a few updates on recent operational and regulatory developments. Starting with our operations, as we progress through the summer season, I'm really proud to say our team continues to excel in delivering reliable service to our customers. In fact, we just experienced the hottest June on record in Phoenix with an average high temperature over 109 degrees and an average overnight temperature of 85 degrees. According to the National Weather Service, the average high temperature in Phoenix during the second quarter was 98 degrees Fahrenheit, which is an increase of 2% over the same period last year and 1.4% above the 10-year historical average.

Jeff: and increased sales growth. Before Andrew discusses the details of our second quarter results, I'll provide a few updates on recent operational and regulatory developments.

Speaker Change: Starting with our operations, as we progress through the summer season, I'm really proud to say our team continues to excel in delivering reliable service to our customers.

Jeffrey Guldner: In fact, we just experienced the hottest June on record in Phoenix, with an average high temperature of over 109 degrees and an average overnight temperature of 85 degrees. According to the National Weather Service, the average high temperature in Phoenix during the second quarter was 98 degrees Fahrenheit, which is an increase of 2% over the same period last year and 1.4% above the 10-year historical average.

Andrew: In fact, we just experienced the hottest June on record in Phoenix with an average high temperature of over 109 degrees and an average overnight temperature of 85 degrees.

Speaker Change: According to the National Weather Service, the average high temperature in Phoenix during the second quarter was 98 degrees Fahrenheit, which is an increase of 2% over the same period last year, and 1.4% above the 10-year historical average.

Jeff Guldner: The number of residential cooling degree days, sorry, the residential cooling degree days, that's a utility measure of the effects of weather. In this year's second quarter, increased 53% compared to the same period a year ago, and was 24% higher than historical 10-year averages. Our robust planning, resource procurement efforts, and our dedicated team have allowed us to provide exceptional service to our customers during this unrelenting summer season, and I really do want to recognize our operators and our field teams for doing an exceptional job, making sure our customers continue to have reliable service through this persistent heat.

Jeffrey Guldner: The number of residential cooling degree days, that's a utility measure of the effects of weather, in this year's second quarter increased 53% compared to the same period a year ago and was 24% higher than historical 10-year averages. Our robust planning, resource procurement efforts, and our dedicated team have allowed us to provide exceptional service to our customers during this unrelenting summer season. And I really do want to recognize our operators and our field teams for doing an exceptional job making sure our customers continue to have reliable service through this constant.

Speaker Change: The number of residential degree cooling days. I'm sorry the residential cooling degree days. That's a utility measure of the effects of weather

Speaker Change: in this year's second quarter increased 53 percent compared to the same period a year ago. It was 24 percent higher than historical 10-year averages.

Speaker Change: Our robust planning, resource procurement efforts, and our dedicated team have allowed us to provide exceptional service to our customers during this unrelenting summer season, and I really do want to recognize our operators and our field teams.

for doing an exceptional job making sure our customers continue to have reliable service through this persistent heat.

Jeff Guldner: With the extreme weather we experience each summer, it remains as important as ever that we continue to assist our communities through heat release support programs. We partnered with local community organizations to aid the state's most vulnerable populations, and this support includes a collaboration with the Foundation for Senior Living, where we offer emergency repair replacement of AC systems during the hot summer months. The Salvation Army's network of cooling and hydration stations across Arizona, and an emergency shelter and eviction protection program in partnership with St. Vincent de Paul. We also offer a variety of assistance programs for those who are struggling with their bill.

Jeffrey Guldner: With the extreme weather we experience each summer, it remains as important as ever that we continue to assist our communities through heat release support programs. We've partnered with local community organizations to aid the state's most vulnerable populations, and this support includes a collaboration with the Foundation for Senior Living, where we offer emergency repair and replacement of AC systems during the hot summer months, the Salvation Army's network of cooling and hydration stations across Arizona, and an emergency shelter and eviction protection program in partnership with St. Vincent de Paul.

Amanda Ho: With the extreme weather we experience each summer, it remains as important as ever that we continue to assist our communities through heat relief support programs.

Amanda Ho: We've partnered with local community organizations to aid the state's most vulnerable populations. This support includes a collaboration with the Foundation for Senior Living,

Speaker Change: where we offer emergency repair, replacement of A.C. systems during the hot summer months, the Salvation Army's network of cooling and hydration stations across Arizona, and an emergency shelter and eviction protection program in partnership with St. Vincent DePaul.

Jeffrey Guldner: We also offer a variety of assistance programs for those who are struggling with their bill. These resources include the Energy Support Program, which provides limited-income customers with up to a 60% discount on their monthly bill, Crisis Bill Assistance, which provides up to $1,000 annually to qualified limited-income customers who experience unexpected financial hardships, and Project SHARE, which is a Salvation Army-administered service providing up to $500 annually in emergency bill assistance.

Jeff Guldner: These resources include the Energy Support Program, which provides limited-income customers with up to a 60% discount on their monthly bill. Crisis bill assistance that provides up to $1,000 annually to qualified limited income customers who experience unexpected financial hardships and Project Share, which is a Salvation Army administered service providing up to $500 annually in emergency bill assistance.

We also offer a variety of assistance programs for those who are struggling with their bill. These resources include the Energy Support Program, which provides limited income customers with up to a 60% discount on their monthly bill.

Amanda Ho: Crisis Bill Assistance that provides up to $1,000 annually to qualified limited-income customers who experience unexpected financial hardships, and Project SHARE, which is a Salvation Army-administered service providing up to $500 annually in emergency bill assistance.

Jeff Guldner: We plan years in advance to serve customers with reliable and affordable energy. Our resource planners secure a diverse energy mix to meet demand and, like, things like solar and wind, and rely on the energy provided by our share of the Paloverde Nuclear Generating Station. When temperatures cause demand to increase, APS's strength and resilience comes from using flexible resources like natural gas and energy storage to keep homes and businesses cool over long stretches of extreme heat. We take an all of the above approach to provide the most affordable and reliable service when our customers need us the most, and as part of our vigorous planning, we've recently executed agreements on multiple projects resulting from our 2023 All Source RFP to be online between 2026 and 2028, and that includes over 400 megawatts of APS-owned resources, and those are already reflected in our capital plan.

Jeffrey Guldner: We plan years in advance to serve customers with reliable and affordable energy. Our resource planners secure a diverse energy mix to meet demand, things like solar and wind, and rely on the energy provided by our share of the Palo Verde Nuclear Generating Station. When temperatures cause demand to increase, APS's strength and resilience comes from using flexible resources like natural gas and energy storage to keep homes and businesses cool over long stretches of extreme weather. We've taken all of the above approaches to provide the most affordable and reliable service when our customers need us the most, and as part of our vigorous planning, we've recently executed agreements on multiple projects resulting from our 2023 all-source RFP to be online between 2026 and 20 And that includes over 400 megawatts of APS-owned resources, and those are already reflected in our capital plan.

Amanda Ho: We plan years in advance to serve customers with reliable and affordable energy.

Speaker Change: Our resource planners secure a diverse energy mix to meet demand, things like solar and wind.

Speaker Change: and rely on the energy provided by our share of the Palo Verde Nuclear Generating Station. When temperatures cause demand to increase, APS's strength and resilience comes from using flexible resources like natural gas and energy storage.

Amanda Ho: to keep homes and businesses cool over long stretches of extreme heat.

We take an all-of-the-above approach to provide the most affordable and reliable service when our customers need us the most.

Amanda Ho: And as part of our vigorous planning, we've recently executed agreements on multiple projects resulting from our 2023 all-source RFP to be online between 2026 and 2028.

Amanda Ho: And that includes over 400 megawatts of APS-owned resources, and those are already reflected in our capital plan.

Jeff Guldner: We're still in negotiations on additional projects, and we look forward to announcing those in the future. We are always seeking the best combination of resources to serve our customers reliably while not sacrificing affordability and continuing to build towards our clean energy future.

Jeffrey Guldner: We're still in negotiations on additional projects, and we look forward to announcing those in the future. And we are always seeking the best combination of resources to serve our customers reliably while not sacrificing affordability and continuing to build towards our clean energy future. Additionally, we remain focused on providing exceptional customer service. I'm proud to share that through the first two quarters of the year, the 2024 JD Power residential and business survey results have placed us in the first quartile compared to peers.

We're still in negotiations on additional projects and we look forward to announcing those in the future. And we are always seeking the best combination of resources to serve our customers reliably while not sacrificing affordability and continuing to build towards our clean energy future.

Jeff Guldner: Additionally, we remain focused on providing exceptional customer service. I'm proud to share that, through the first two quarters of the year, the 2024 JD Power Residential and Business Survey results have placed us in the first quartile compared to peers. We've very remarkable progress over the past few years, moving from fourth quartile to first, and I can absolutely say that progress would not have happened without the dedication and commitment of our hardworking employees across the company.

Amanda Ho: Additionally, we remain focused on providing exceptional customer service. I'm proud to share that through the first two quarters of the year, the 2024 JD Power residential and business survey results have placed us in the first quartile compared to peers.

Jeffrey Guldner: We've made remarkable progress over the past few years, moving from fourth quartile to first, and I can absolutely say that progress would not have happened without the dedication and commitment of our hardworking employees across the company. Turning to a regulatory update, the Commission has continued to move forward in the regulatory lag docket. At the July Open meeting, the Commission unanimously voted to hold additional workshops, and the next workshop is scheduled for October 3rd.

Amanda Ho: We've made remarkable progress over the past few years, moving from fourth quartile to first, and I can absolutely say that progress would not have happened without the dedication and commitment of our hardworking employees across the company.

Jeff Guldner: Turning to a regulatory update, the Commission has continued to progress in the regulatory lag docket. At the July open meeting, the Commission unanimously voted to hold additional workshops, and the next workshop is scheduled for October 3rd. Commission staff stated that the workshops will be focused on formula rates and future test years, with experts sharing their experience with each of these regulatory structures, and will continue to work with the commission and stakeholders on this important issue, reducing regulatory lag in Arizona. We've made solid progress through the first half of this year, improving our customer experience, enhancing our stakeholder relationships, and executing on regulatory priorities, and we look forward to continuing to provide exceptional service for our customers through the balance of the year.

Speaker Change: Turning to a regulatory update, the Commission has continued to progress in the regulatory lag docket. At the July open meeting, the Commission unanimously voted to hold additional workshops, and the next workshop is scheduled for October 3rd.

Jeffrey Guldner: Commission staff stated that the workshops will be focused on formula rates and future test years, with experts sharing their experience with each of these regulatory structures and will continue to work with the Commission and stakeholders on this important issue of reducing regulatory lag in Arizona. We've made solid progress through the first half of this year, improving our customer experience, enhancing our stakeholder relationships, and executing on regulatory priorities. And we look forward to continuing to provide exceptional service for our customers through the balance of the year.

Speaker Change: Commission staff stated that the workshops will be focused on formula rates and future test years with experts sharing their experience with each of these regulatory structures and will continue to work with the Commission and stakeholders on this important issue of reducing regulatory lag in Arizona.

Andrew: We've made solid progress through the first half of this year, improving our customer experience, enhancing our stakeholder relationships, and executing on regulatory priorities. And we look forward to continuing to provide exceptional service for our customers through the balance of the year. And with that, I'll turn the call over to Andrew.

Andrew Cooper: And with that, I'll turn the call over to Andrew. Thank you, Jeff, and thanks again to everyone for joining us today. This morning, we released our second quarter of 2024 financial results. I will review those results and provide some additional details on key drivers for the quarter. We earned $1.76 per share of this quarter, an increase of 82 cents per share compared to the second quarter last. year. New customer rates, weather, and continued robust health growth were the main drivers for the quarter-over-quarter increase. The 2019 rate case appeal outcome, income tax timing, and I know I'm savings where other positive drivers for the quarter.

Andrew Cooper: Thank you, Jeff, and thanks again to everyone for joining us today. This morning, we released our second quarter 2024 financial results. I will review those results and provide some additional details on key drivers for the quarter. We earned $1.76 per share this quarter, an increase of $0.82 per share compared to the second quarter last year.

Andrew: Thank you, Jeff, and thanks again to everyone for joining us today. This morning we released our second quarter 2024 financial results. I will review those results and provide some additional details on key drivers for the quarter.

Andrew Cooper: New customer rates, weather, and continued robust sales growth were the main drivers for the quarter-over-quarter increase. The 2019 Rate Case Appeal Outcome, Income Tax Timing, and O&M Savings were other positive drivers for the quarter. Higher interest expense and depreciation amortization expense were the primary negative drivers compared to last year.

Andrew Cooper: Higher interest expense and depreciation memorization expense were the primary negative drivers compared to last year. As Jeff mentioned, we experienced the hottest June on record, which contributed to a 29-cent benefit from weather versus this time last year. And as a reminder, last year we saw the mildest June since 2009. Our sales growth continued to be strong during the second quarter, providing a 24-cent benefit, with total weather-normalized sales increasing 5.5 percent compared to second quarter last year. CNI continued its robust growth at 10 percent for the quarter. This is primarily due to the ramping of large manufacturing and data center customers in our service territory.

Andrew Cooper: As Jeff mentioned, we experienced the hottest June on record, which contributed to a $0.29 benefit from weather compared to this time last year. And as a reminder, last year we saw the mildest June since 2009. Our sales growth continued to be strong during the second quarter, providing a $0.24 benefit, with total weather normalized sales increasing 5.5% compared to the second quarter last year. CNI continued its robust growth at 10% for the quarter. This is primarily due to the growth of large manufacturing and data center customers in our service territory.

Andrew Cooper: Although we are not changing 2024 sales growth guidance at this time, our weather-normalized sales growth year-to-date has aligned more closely with our long-term sales growth guidance of 4-6 percent, of which 3-5 percent is expected to be attributable to our extra high-low factor customers. Turning to economic conditions in Arizona, we experienced 2.1 percent customer growth in the second quarter, and the fundamental economic factors supporting customer growth remain strong. National inflation is declining, with the Phoenix metro area in particular experiencing a year-over-year inflation rate of 2.7 percent as of June data, below the national average of 3 percent.

Andrew Cooper: Although we are not changing our 2024 sales growth guidance at this time, our weather-normalized sales growth year to date has aligned more closely with our long-term sales growth guidance of 4 to 6%, of which 3 to 5% is expected to be attributable to our extra high load factor customers. Turning to economic conditions in Arizona, we experienced 2.1% customer growth in the second quarter, and the fundamental economic factors supporting customer growth remain strong.

Andrew: Turning to economic conditions in Arizona, we experienced 2.1% customer growth in the second quarter, and the fundamental economic factors supporting customer growth remain strong.

Andrew Cooper: National inflation is declining, with the Phoenix metro area in particular experiencing a year-over-year inflation rate of 2.7 percent as of June data, below the national average of 3 percent. Additionally, Arizona's unemployment rate hit an all-time record low of 3.3% in June, which is below the national unemployment rate of 4.1%.

Andrew Cooper: Additionally, Arizona's unemployment rate hit an all-time record low of 3.3 percent in June, which is below the national unemployment rate of 4.1 percent. These positive economic indicators underscore the strong support for continued growth in our service territory. Our own administrative tips have delivered benefits to this quarter. We have been successful in our efforts to lower core ONM expense across multiple areas of our operations, including both nuclear and non-nuclear generation costs. We are making progress in our planned outages to keep our generation fleet resilience and reliable, and our goal continues to be declining ONM per medical hour, while ensuring we meet the critical reliability demands of the summer season.

Andrew Cooper: Positive economic indicators underscore the strong support for continued growth in our service territory. Our O&M initiatives have delivered benefits this quarter. We have been successful in our efforts to lower core O&M expenses across multiple areas of our operations, including both nuclear and non-nuclear generation costs. We're making progress on our planned outages to keep our generation fleet resilient and reliable. And our goal continues to be declining O&M per megawatt hour while ensuring that we meet the critical reliability demands of the summer season.

Andrew Cooper: While interest expenses risen this quarter compared to last year, due to higher debt balances and increased interest rates, we are managing our financing costs proactively. Additionally, our depreciation and amortization expense has increased, reflecting our investment in planned IT projects and other grid investments. These strategic projects are expected to yield long-term benefits, even as they create additional drag throughout the year. We have continued the successful execution of our capital investment program and related financing strategies this quarter, as well as managing our debt maturities. This quarter, APS issued a $450 million bond in early May, and in early June, we successfully closed on both $525 million in convertible notes and $350 million in floating rate notes at Pinnacle last.

Andrew Cooper: While interest expense has risen this quarter compared to last year due to higher debt balances and increased interest rates, we are managing our financing costs proactively. Additionally, our depreciation and amortization expense has increased, reflecting our investment in plant IT projects and other grid investments. These strategic projects are expected to yield long-term benefits, even as they create additional drag throughout the year. We've continued the successful execution of our capital investment program and related financing strategies this quarter, as well as managing our debt maturity.

Andrew: While interest expense has risen this quarter compared to last year due to higher debt balances and increased interest rates, we are managing our financing costs proactively.

Andrew: Additionally, our depreciation and amortization expense has increased, reflecting our investment in planned IT projects and other grid investments.

Andrew: These strategic projects are expected to yield long-term benefits, even as they create additional drag throughout the year.

Andrew: We've continued the successful execution of our Capital Investment Program and related financing strategies this quarter, as well as managing our debt maturities.

Andrew Cooper: This quarter, APS issued a $450 million bond in early May, and in early June, we successfully closed on both $525 million in convertible notes and $350 million in floating rate notes at Pinnacle West. We're committed to seeking the most advantageous opportunities to strategically finance our capital plan. Finally, all other aspects of guidance remain unchanged, including 2024 EPS. However, if the sales growth and weather trends we experienced during the second quarter continue, we expect to be towards the higher end of our EPS range.

Andrew: This quarter, APS issued a $450 million bond in early May, and in early June, we successfully closed on both $525 million in convertible notes and $350 million in floating rate notes at Pinnacle West.

Andrew Cooper: We are committed to seeking the most advantageous opportunities to strategically finance our capital plans. Finally, all other aspects of guidance remain unchanged, including 2024 EPS. However, if these sales growth and weather trends we experience during the second quarter continue, we expect to be towards the higher end of our EPS range. We are closely monitoring sales growth and weather for the remainder of the year. We have had a strong first half of the year and are excited to continue executing our strategy throughout the rest of 2024. We are focused on ensuring our customers have safe and reliable power to navigate the summer heat.

Andrew: We are committed to seeking the most advantageous opportunities to strategically finance our capital plan.

Andrew: Finally, all other aspects of guidance remain unchanged, including 2024 EPS. However, if these sales growth and weather trends we experienced during the second quarter continue, we expect to be towards the higher end of our EPS range.

Andrew Cooper: We are closely monitoring sales growth and weather for the remainder of the year. We have had a strong first half of the year and are excited to continue executing our strategy throughout the rest of 2024. We're focused on ensuring our customers have safe and reliable power to navigate the summer heat. This concludes our prepared remarks. I will now turn the call back over to the operator for questions.

Andrew: We are closely monitoring sales growth and weather for the remainder of the year.

Andrew: We have had a strong first half of the year and are excited to continue executing our strategy throughout the rest of 2024. We are focused on ensuring our customers have safe and reliable power to navigate the summer heat.

Operator: This concludes our prepared remarks.

Operator: I will now turn the call back over to the operator for questions. Certainly, everyone at this time be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time.

Operator: Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star 1 on your phone at this time. We do ask that while you are posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star 1 on your phone. Your first question is coming from Shahriar Pourreza from Guggenheim Partners. Your line is live.

Speaker Change: Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star 1 on your phone at this time.

Operator: We do ask that, while posing your question, please pick up your handset if you listen on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone.

Speaker Change: We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality.

Andrew: Once again, if you have any questions or comments, please press star 1 on your phone.

Shahriar Pourreza: Your first question is coming from Shah Parusa from Guggenheim Partners. Your line is live.

Speaker Change: Your first question is coming from Shah Parusa from Guggenheim Partners. Your line is live.

Shahriar Pourreza: Hey, guys. Hey, sir. Hey, I see Jeff.

Shahriar Pourreza: PIC, Jeff. So just on, obviously, that's been thematic, you know, the weather normalized sales growth of five and a half percent; it's in line with your longer term four to six. Can you maybe elaborate on how sticky this is for the CNI backdrop? And if it's sticky, obviously that sets you up well for 24, but how do we think about 25 as we bridge from 24? And what does this all mean for your longer-term capital program and earnings guidance?

Shahriar Pourreza: So, just on obviously that's been somatic, you know, the weather normalized sales growth 5.5 percent. It's in line with your long return 4 to 6.

Shah Parusa: Hey, guys.

Shah Parusa: A sharp

Speaker Change: Hey I see Jeff. So just on obviously that's been thematic you know the the weather normalized sales growth five and a half percent it's in line with your longer term four to six

Andrew Cooper: Can you just maybe elaborate on how sticky this is for the C&I backdrop? And if it's sticky, obviously that sets you out well for 24. But how do we think about 25 as we bridge from 24? And what does this all mean to sort of your long-return capital program in Ernie's guidance? Thanks.

Speaker Change: Can you just maybe elaborate on how sticky this is for the CNI backdrop?

Speaker Change: And if it's sticky, obviously that sets you up well for 24, but how do we think about...

Speaker Change: 25 as we bridge from 24.

Speaker Change: And what does this all mean to sort of your longer-term capital program and earnings guidance? Thanks.

Andrew Cooper: Hey, Shar, it's Andrew. Yeah. So, as you mentioned, you know, 5.5 percent sales growth for the quarter, largely driven by those large C&I customers continuing to ramp up. And so, you know, you saw that coming from both the manufacturing customers TSMC and CCO system, as well as from the data centers. And so, you know, we're still guiding to a lower range this year as that ramp starts up in a longer term range of 46 percent. And that 4 to 6, you know, we have not provided guidance out past 2026 and don't intend to do so today either.

Andrew Cooper: Hey Shahriar, it's Andrew. Um, yeah, as you mentioned, five and a half percent sales for the quarter, largely driven by those large CNI customers continuing to ramp up. And so, you know, you saw that coming from both the manufacturing customers, TSM, and the CNS ecosystem, as well as from the data centers. And so, we're still guiding to a lower range this year as that ramp starts up in a longer-term range of four to 6%. And that four to six, you know; we have not provided guidance past 2026 and don't intend to do so today either.

Speaker Change: Hey Char, it's Andrew. Yeah, so you know, as you mentioned, you know, five and a half percent sales for the quarter, largely driven by those large C&I customers continuing to ramp up.

Speaker Change: And so, you know, you saw that coming from both the manufacturing customers, TSMCS ecosystem, as well as from the data centers. And so, you know, we're still guiding to a lower range this year as that ramp starts up in a longer-term range of 4 to 6 percent.

Andrew Cooper: But if you think about the long term, there is a backlog of these customers that is substantial and extends beyond 2026. You have the second and third phases of TSMC committed, we have over 4000 megawatts of data center customers that are committed as well. And that doesn't even include the backlog of more than 10,000 data center requests that we've gotten beyond that.

Speaker Change: And we have not provided guidance out past 2026 and don't intend to do so today either. But if you think about the long term, there is a backlog of these customers that's substantial and extends beyond 2026.

Andrew Cooper: But if you think about the long term, there is a backlog of these customers that is substantial and extends beyond 2026. You have the second and third phases of TSMC committed. We have over 4,000 megawatts of data center customers that are committed as well. And that doesn't even include the backlog of more than 10,000 data center requests that we've gotten beyond that. And so, the stickiness of the large C&I sales growth is a pretty, pretty critical trend, and we expect to continue based on what we're seeing in the service territory. The only other thing I would just add about the sales growth from this quarter is we saw a nice contribution to that C&I sales growth from small business.

Speaker Change: the second and third phases of TSMC committed.

Speaker Change: We have over 4,000 megawatts of data center customers.

Speaker Change: that are committed as well, and that doesn't even include the backlog of more than 10,000 data center requests that we've gotten beyond that. And so the stickiness of the large C&I sales growth is a pretty critical trend, and we expect it to continue based on what we're seeing in the service territory. The only other thing I would just add about the sales growth from this quarter is we saw a nice contribution to that C&I sales growth from small business.

Andrew Cooper: And so the stickiness of the large CNI sales growth is a pretty, pretty critical trend, and we expect it to continue based on what we're seeing in the service territory. The only other thing I would just add about the sales growth from this quarter is that we saw a nice contribution to that CNI sales growth from small businesses. So you know, two-thirds to 75% of the large CNI that 10% growth in the CNI segment was from larger customers.

Andrew Cooper: So, you know, 2.3 to 75 percent of the large C&I; that 10 percent growth in the C&I segment was from the larger customers. But we did see small businesses continue to flourish as well. And I think that speaks to what Jeff and I have spent a lot of time talking about, which is the amplification effect of having a strong economy here and a rebuilt manufacturing base. And we're starting to see some of the effects of that. Yeah, I mean, the tailwinds are obviously pretty evident.

Speaker Change: So, you know, two-thirds to 75% of the large C&I, that 10% growth in the C&I segment, was from the larger customers, but we did see small businesses continue to flourish as well, and I think that speaks to what Jeff and I spent a lot of time talking about, which is the amplification effect of having a strong economy here and a, you know, rebuilt manufacturing base, and we're starting to see some of the effects of that.

Andrew Cooper: But we did see small businesses continue to flourish, as well. And I think that speaks to what Jeff and I spent a lot of time talking about, which is the amplification effect of having a strong economy here and a, you know, rebuilt manufacturing base. And we're starting to see some of the effects of that.

Andrew Cooper: Yeah, I mean the tailwinds are obviously pretty evident. I guess, Andrew, what's the appropriate time for you to revisit this and update investors? Is it sort of with the year-end update, or could we see something closer as we get to EEI?

Andrew Cooper: I guess, Andrew, what's the podium for you to revisit this and update investors? Is it sort of with the year-end update? Or could we see something closer as we get to E.I.? You know, we do typically moment on a rakeous year, provide updates at the third quarter, you know, round E.I. as we suggest. That's certainly from the perspective of rolling forward our guidance, providing the, you know, the long-term outlook on the sales growth as well as the capital that goes with it. And I know in your first question you asked about capital as well. So that that would be the intent would be, you know, to look at the third quarter there as well as ensuring that we're continuing to see these ramp trends.

Andrew: I mean the tailwinds are obviously pretty evident. I guess, Andrew, what's the podium for you to revisit this and update investors? Is it sort of with the year-end update or could we see something closer as we get to EEI?

Andrew Cooper: You know, we do typically, when we're not in a rate case year, provide updates in the third quarter around EEI. As you suggest, that's certainly from the perspective of rolling forward our guidance, providing the, you know, the long-term outlook on sales growth, as well as the capital that goes with it. And I know, in your first question, you asked about capital as well. So that would be the intent would be, you know, to look at the third quarter there, as well as ensuring that we're continuing to see these ramp trends. As we've seen over the last few years with these large, high load factor customers, the ramps can be a little bit variable. And so we want to ensure that the 10% growth that we saw in the first half of the year continues before we make any change to sales guidance.

Andrew: on the sales growth as well as the capital that goes with it.

Andrew: in your first question you asked about capital as well so that that would be the intent would be uh you know to look uh the third quarter there as well as ensuring that we're continuing to see these ramp trends as we've seen over the last two years with these large

Andrew Cooper: As we've seen over the last few years with these large high-low factor customers, the ramps can be a little bit variable. And so we want to ensure that the, you know, the 10% room that we saw in the first half of the year continues before we make any changes.

Andrew: high load factor customers, the ramps can be a little bit variable. And so we want to ensure that the you know, the the 10 percent growth that we saw in the first half of the year continues before we make any change to sales guidance.

Shahriar Pourreza: Okay, perfect. And just lastly, the REGLAG docket that's kind of out there, I mean, obviously another workshop, maybe just provide just a little bit higher level, you know, thoughts on kind of where the timeline stands today. Any incremental details that you could provide coming out of the recent meeting and just additional milestones, because it seems like it's gaining fairly good traction, but I just want to see if there's anything incremental to add there.

Shahriar Pourreza: Okay, perfect. And then just lastly, the red flag, the docket that's kind of out there. I mean, obviously, another workshop.

Andrew Cooper: Maybe just provide just a little bit higher level, you know, thoughts on kind of where the timeline stands today. Any incremental details that you can provide coming out of the recent meeting and just additional milestones because it seems like it's gaining fairly good traction, but just want to see the thing incremental to add there. Thanks.

Speaker Change: today, any incremental details that you could provide coming out of the recent meeting and just additional milestones because it seems like it's gaining fairly good traction, but just wanted to see if there was anything incremental to add there. Thanks.

Jeffrey Guldner: Yeah, I'll start and then anybody else here can chime in. I think, you know, the ERC and bringing in the experts, having a real dialogue around what are the... What are the, you know, systemic things that are being done in other places or in other jurisdictions? How does that work?

Jeff Guldner: Yes, I'll start, and anybody else can chime in. I think, you know, so that you are seeing the bringing in the experts having a real dialogue around what are the, what are the, you know, systemic things that are being done in other places or in other jurisdictions, how does that work? I mean, to me, the thing that's encouraging is I think it really does show that there's a desire to understand, you know, what this means and particularly important in the context that we're moving into, that the amount of capital that's going to have to go into serving the growth in Arizona and to really leverage like one of the key strengths of Arizona has been the broad regulatory environment, which has attracted so many of these customers like Red Bull and TSMC and others into the state. That's got to pair with our ability to serve them and to meet the growth that's coming.

Speaker Change: I'll start and then anybody else here can chime in. I think, you know, so the ERC and the bringing in the experts, having a real dialogue around what are the...

Speaker Change: What are the systemic things that are being done in other places or in other jurisdictions? How does that work? I mean, to me, the thing that's encouraging is I think it really does show that there's a desire to understand.

Jeffrey Guldner: I mean, to me, the thing that's encouraging is that I think it really does show that there's a desire to understand and serve the growth in Arizona and to really leverage, like, one of the key strengths of Arizona has been the broad regulatory environment, which has attracted so many of these customers like Red Bull and TSMC and others into the state. That's got to pair with our ability to serve them and meet the growth that's coming.

Speaker Change: You know what this means and particularly important in the context that we're moving into that the amount of capital that's going to have to go into

Speaker Change: serving the growth in Arizona and to really leverage like one of the key strengths of Arizona has been the broad regulatory environment which has attracted

Speaker Change: So many of these customers like Red Bull and TSMC and others into the state that's got a pair With our ability to serve them and to meet the growth that's coming and so that so it's really I think understanding that broader context

Jeff Guldner: And so it's really, I think, understanding that broader context that's been helpful for these workshops.

Jeffrey Guldner: And so it's really, I think, understanding that broader context that's been helpful for these workshops. So it's good that we're seeing another one coming up in October. I think there'll be some continued. I think they are working to try to move this through and at least get some alignment or direction articulated here throughout the rest of the year. So I think this is good progress and something that we're definitely engaged in, trying to make sure that we can provide the support they're looking for as they sort through some of these policy options.

Jeff Guldner: So it's good that we're seeing another one coming up in October. I think there'll be some continued exploration or dialogue around what the different areas are. I think we said in the script here that you have a lot of the focuses right now on both the forward testers, but also the formulaic approach to rates, which is similar to FERC. And so it's still early in the process. I think they are working to try to move this through and at least get some alignment or direction articulated here throughout the rest of the year. So I think good, good progress and something that we're definitely engaged in trying to make sure that we can provide the support they're looking for as they sort through some of these policy options.

Speaker Change: That's been helpful for these for these workshops. So it's good that we're seeing another one coming up in October I think there'll be some continued

Andrew: Exploration or dialogue around what the different areas are. I think we said in the script here that a lot of the focus is right now on.

Andrew: on both the forward test years, but also the formulaic approach to rates, which is similar to FERC. And so it's still early in the process. I think they are working to try to

Andrew: to move this through and at least get some alignment or direction articulated here throughout the rest of the year.

Andrew: So I think good, good progress and something that we're definitely engaged in, trying to make sure that we can provide the support they're looking for as they sort through some of these policy options.

Shahriar Pourreza: Perfect. I appreciate it guys. Congratulations on the execution. It's pretty notable. Yeah, thank you.

Shahriar Pourreza: Perfect. I appreciate it, guys. Congrats on the execution. It's pretty notable. Thanks. Yeah, thank you.

Speaker Change: Perfect. I appreciate it guys. Congrats on the execution. It's pretty notable. Thanks.

Nick Campanella: Thank you. Your next question is coming from Nick Campanella from Barclays.

Nick Campanella: Thank you. Your next question is coming from Nick Campanella from Barclays. Your line is live.

Speaker Change: Thank you for your time.

Nick Campanella: Your line is lost.

Speaker Change: Thank you. Your next question is coming from Nick Campanella from Barclays. Your line is live.

Nick Campanella: Hey, thanks for the time. I wanted to just put a finer point, I'm sorry if I missed it, but just, is October really the date that you're looking towards for this to be taken up? I just know that there should be some open meetings between now and then, but is it October?

Nick Campanella: Hey, thanks for the time. I wanted to just put a finer point on this. I'm sorry if I missed it, but just... Is October really the date that you're looking towards for this to be taken up? I just know that there should be some open meetings between now and then, but is it October?

Nick Campanella: Hey, thanks for the time.

Nick Campanella: I wanted to just put a finer point, I'm sorry if I missed it but just

Nick Campanella: Is October really the date that you're looking towards for this to be taken up? I just know that there should be some open meetings between now and then But is it is it October? Yes, it's October

Jeffrey Guldner: It's October.

Andrew Cooper: Yes, it's October. Okay, and then I guess just, you know, with the strong start to 24, what are some of the negatives that we might not be contemplating here that would keep you within the guidance range? I know you're going to say that you're at the higher end and then just knowing that the long-term cater is not linear, obviously it's going to be predicated on rate outcomes.

Nick Campanella: Okay, and then I guess just... You know, with the strong start to 24, what are some of the negatives that we might not be contemplating here that would keep you within the guidance range? I know you kind of said that you're at the higher end, and then just knowing that the long-term curve is not linear, obviously, it's going to be predicated on rate outcomes. Is there any kind of pull forward opportunity from O&M or otherwise to kind of help de-risk your 25 outlook within the range?

Speaker Change: Okay, and then I guess just...

Speaker Change: With the strong start to 24, what are some of the negatives that we might not be contemplating here that would keep you within the guidance range? I know you kind of said that you're at the higher end and then just.

Speaker Change: Knowing that the long-term cater is not linear, obviously it's going to be predicated on rate outcomes. Is there any kind of pull-forward opportunity from O&M or otherwise to kind of help de-risk your 25 outlook within the range?

Andrew Cooper: Is there any kind of pull-forward opportunity from O&M or otherwise to kind of help de-risk your 25 outlook within the range?

Andrew Cooper: Sure, hey, Nick, it's Andrew. So, you know, in terms of things that we're monitoring for the rest of the year, you know, as I mentioned earlier, certainly on the sales side, want to make sure that those, you know, that, you know, ramp rate continues with our customers. Residential sales, you know, continue to have some customer behavioral elements that we watch as well. The end of the very hot summer, and we saw some of those at the end of the summer last year. But, you know, overall, the sales growth trends have been a positive, you know, tailing to date.

Andrew Cooper: Sure. Hey, Nick. It's Andrew.

Speaker Change: Sure. Hey, Nick, it's Andrew. So in terms of things that we're monitoring for the rest of the year, as I mentioned earlier, certainly on the sales.

Andrew Cooper: So in terms of things that we're monitoring for the rest of the year, as I mentioned earlier, certainly on the sales side, we want to make sure that that ramp rate continues with our customers. Residential sales continue to have some customer behavioral elements that we watch as well at the end of a very hot summer. And we saw some of those at the end of the summer last year.

Speaker Change: I want to make sure that ramp rate continues with our customers. Residential sales continue to have

Andrew: some customer behavioral elements that we watch as well at the end of a very hot summer. And we saw some of those at the end of the summer last year. But, you know, overall, the sales growth trends have been a positive, you know, tailing to date.

Andrew Cooper: But overall, the sales growth trends have been a positive tailwind to date. The spot that we certainly continue to watch, and it'll lead into your second question there, is just around O&M. We've been very judicious in the first half of the year to engage some of those O&M savings. If you recall, our guidance for the year for O&M contemplates basically a 2% reduction in core O&M in order to accommodate some of the large planned outages that we have this year, which basically leads to a 2% overall increase in O&M.

Andrew Cooper: The spot that we certainly continue to watch, and it'll lead into your second question there, is just around O&M. We've been very judicious in the first half of the year to engage some of those O&M savings. If you recall, our guidance for the year for O&M contemplates basically a 2% reduction in core O&M in order to accommodate some of the large planned outages that we have this year, which basically lead to a 2% overall increase in O&M. And so the largest of the outages is still on the come with Four Corners on the second half of this year.

Speaker Change: The spot that we certainly continue to watch, and it'll lead into your second question there, is just around O&M. We've been very judicious in the first half of the year to...

Speaker Change: engaged some of those O&M savings.

Speaker Change: If you recall our guidance for the year for O&M contemplates

Speaker Change: Basically a 2% reduction in core O&M in order to accommodate some of the large plant outages that we have this year which basically lead to a 2% overall increase in O&M.

Andrew Cooper: And so the largest of the outages is still on the horizon, with four corners in the second half of this year. And certainly, as we watch the O&M picture, we've seen a good story year to date in those savings from exercising our lean muscle and all the operating efficiencies that we look for every year at the company. Those have played out according to plan, but certainly, as we engage in that outage and all the planning and work that we've done to make sure that it keeps us within our O&M range, that's certainly the area that we'll look to.

Speaker Change: and so the largest of the outages is still on the come with

Andrew Cooper: And certainly, so as we, you know, watch the O&M picture, we've seen a good store year to date; those savings from exercising our lean muscle and all the operating efficiencies that we look for every year of the company. Those have played out according to plan, but certainly, as we engage in that outage and all the planning and work that we've done to make sure that it keeps us within our O&M range, that's certainly, you know, the area that we'll look to. There aren't a lot of other things that rise to the top of the list in terms of, you know, potential headwinds other than the normal economic and sales, you know, top line related ones.

Speaker Change: for Corners in the second half of this year. And certainly, so as we watch the O&M picture, we've seen a good story year to date in those savings from exercising our lean muscle and all the operating efficiencies that we look for every year at the company.

Speaker Change: Those have played out according to plan, but certainly as we engage in that outage and all the planning and work that we've done to make sure that it keeps us within our O&M range, that's certainly, you know, the area that we'll look to. There aren't a lot of other things that rise to the top of the list in terms of...

Andrew Cooper: There aren't a lot of other things that rise to the top of the list in terms of potential headwinds other than the normal economic and sales-related ones. We've de-risked our financing plan for the year by doing all the financing we did, so we've got a good handle on what our rate picture is for the year, and the DNA is what it is based on the assets going into service. Just going to your second part on O&M because I think certainly the outage picture is the one that we will watch for the rest of the year.

Speaker Change: potential headwinds other than the normal economic and sales, you know, top line related ones. We've de-risked our financing plan for the year by doing all the financing we did. So we've kind of got a good

Andrew Cooper: We've done risk refinancing plans for the year by doing all the financing we did. So we've kind of got a good, you know, handle on what our rate picture is. For the year in the DNA is what it is, you know, based on the assets going into service.

Speaker Change: you know, handle on what our rate picture is for the year and the DNA.

Andrew Cooper: So just going to your second part on O&M, because I think, you know, certainly the, you know, outage pictures, the one that we watch for the rest of the year, without weather benefit, we certainly have activated the internal dialogue around the potential to take a look at our multi-year O&M plan, and where we can do risk it. And part of the reason for that is actually that, you know, the four-quarters average continues in 25. And so, you know, our ability to have some flexibility in when we initiate some of these O&M projects, whether they're on the TND side, on the technology side, there's a number of things that we look at and how we could toggle and have some agility in terms of how we approach them.

Speaker Change: is what it is, you know, based on the assets going into service.

Speaker Change: So just going to your second part on O&M, because I think, you know, certainly the outage picture is the one that we watch.

Andrew Cooper: With that weather benefit, we certainly have activated the internal dialogue around the potential to take a look at our multi-year O&M plan and where we can de-risk it. Part of the reason for that is that the four-quarters outage continues in 2025. Our ability to have some flexibility in when we initiate some of these O&M projects, whether they're on the T&D side or on the technology side, there's a number of things that we look at and how we could toggle and have some agility in terms of how we approach them. The short answer is yes, we'll look at O&M as we continue to look at the weather and see how the outage schedule pans out as well.

Speaker Change: for the rest of the year, with that weather benefit, we certainly have activated.

Speaker Change: the internal dialogue around the potential to take a look at our multi-year O&M plan and where we can de-risk it.

Speaker Change: And part of the reason for that is actually that, you know, the four-quarters average continues in 25. And so, you know, our ability to have some flexibility in when we initiate some of these O&M projects, whether they're on the T&D side, on the technology side, there's a number of things that we look at and how we could toggle and have some agility in terms of how we approach them. So the short answer is yes, we'll look at O&M as, you know, we continue to look at the weather and see what's.

Andrew Cooper: So the short answer is yes, we'll look at O&M as, you know, we continue to look at the weather and see what's, you know, the outage schedule, you know, how that pans out as well. That's great.

Speaker Change: the outage schedule, how that pans out as well.

Nick Campanella: That's great. I appreciate that, Collar. And one more, if I could, just... With the REG-WAG docket kind of gaining traction, you also kind of have this ACC election in the background as well, and that all kind of culminates around this fall timeline, but how do you kind of see that changing the direction of the WAG docket, if at all? Uh, I think, I mean, the lag...

Nick Campanella: I appreciate that color.

Nick Campanella: And one more if I could just with the Reg Black docket kind of gaining traction, you also kind of have this ACC election in the background as well. And that all kind of culminates around this fall timeline.

Collar: That's great. I appreciate that, Collar. And one more, if I could.

Speaker Change: with the red black docket kind of gaining traction you also kind of have this ACC election in the background as well and That all kind of culminates around this fall timeline But you know how do you kind of see that changing the direction of the the lag docket if at all?

Andrew Cooper: But, you know, how do you kind of see that changing the direction of the lag docket, if at all? I think the lag docket is moving forward on the schedule that they've got there. I mean, right now the election, it's pretty early. We're just out of the primaries. Here, most of the attention right now is at the top of the ticket races. And so you're not, I don't think there's been a lot of dialogue yet on commission election issues. We continue to engage with the candidates on both sides. So it was an uncontested primary on both.

Jeffrey Guldner: I think, I mean, the lag docket is moving forward on the schedule that they've got there. I mean, right now, the election, it's pretty early. We're just out of the primaries. I hear most of the attention right now is on the top of the ticket races, and so you're not, I don't think there's been a lot of dialogue yet on that, commission election issues. We continue to engage with the candidates on both sides.

Speaker Change: I think, I mean, the lag docket is moving forward on the schedule that they've got there. I mean, right now the election, it's pretty early. We're just out of the primaries.

Speaker Change: Most of the attention right now is at the top of the ticket races, and so I don't think there's been a lot of dialogue yet on that.

Jeffrey Guldner: So it was an uncontested primary on both. And so we've been in contact with. The candidates on both sides, and it's an area where we want to continue the dialogue because, again, it ties back to the growth that we're seeing in the state and the need to support that growth. Governor Hobbs has continued to be very supportive of growth in the state and do things that are following up on whatever Republican predecessor was driving.

Andrew Cooper: And so we've been in contact with the candidates on both sides. And it's an area where we want to continue the dialogue because, again, it ties back to the growth that we're seeing in the state and the need to support that growth. And that's been consistent. Governor Hobbes has continued to be very supportive of growth in the state and do things that is following up on whatever Republican predecessor was driving. All right. Thanks a lot.

Michael Lonegan: Thank you. Your next question is coming from Michael Lonegan from Evercore ISI.

Michael Lonegan: Thank you. Your next question is coming from Michael Lonegan from Evercore ISI. Your line is live.

Michael Lonegan: Your line is live. Hi. Thanks for taking my questions. On the financing plan, just wondering if you have any updated thoughts on the timing and type of equity or alternatives. I know you previously said you were leaning towards an ATM program that could match up well with capital deployment.

Michael Lonegan: Hi, thanks for taking my questions. On the financing plan, just wondering if you have any updated thoughts on the timing and type of equity or alternatives. I know you previously said you were leaning towards, you know, an ATM program that could match up well with capital deployment.

Andrew Cooper: Hey, Michael, it's Andrew. Yeah. So, you know, no updates at this point. You know, if you recall, we did our big block that way that we really wanted to use to make sure that we have a robust balance capital structure down at APS. And that's under a forward. So, we'll draw that over time. It would be 18 months to do so. We do risk our maturities about APS and Pinnacle West during the second quarter with a number of debt instruments. And that, you know, used up a little bit of the debt parent debt. Now, that's in our three-year financing plan.

Andrew Cooper: Hey, Michael, it's Andrew. Yeah, so, you know, no updates at this point. But, you know, if you recall, we did our big block equity that we really wanted to use to make sure that we have a robust, balanced capital structure down at APS. And that's under a forward.

Andrew Cooper: So we'll draw that down over time if we have 18 months to do so. However, we do risk our maturities of both APS and Pinnacle West during the second quarter with a number of debt instruments. And that used up a little bit of the parent debt amount that's in our three-year financing plan. So that really leaves predominantly the incremental external financing that we need to do as a parent, the $400 million number that we have there in the plan. Ultimately, at the base case, there still really remains common equity.

Speaker Change: [inaudible]

Andrew Cooper: So, that really leaves predominantly the incremental external financing that we need to do as a parent, the 400 million dollar number that we have there on the plan. And, you know, ultimately, in the base case, there still really remains common equity. Certainly, we'll look at other instruments, and those alternatives are out there. And, as you said, you said it best, Michael, it's an ATM program as an ability to match up the capital needs with the external financing. And so, that would be our base case as we move through the year and think about when we roll forward or financing plan. You know, an ATM tends to be a three-year program.

Speaker Change: and all the financing that we need to do as a parent, the $400 million number that we have there in the plan.

Andrew Cooper: Certainly, we'll look at other instruments, and those alternatives are out there. As you said best, Michael, an ATM program is an ability to match up capital needs with external financing, and so that would be our base case. As we move through the year and think about when we roll forward our financing plan, an ATM tends to be a three-year program, and so we're kind of done with our 24 equity needs. As we look to 25 through 27, we'll provide any updates, but $400 million is the number that we're targeting at the moment, and an ATM certainly remains the base case.

Speaker Change: You know ultimately at the base case there still really remains

Speaker Change: Common Equity, certainly we'll look at other instruments and those alternatives are out there. And as you said it best, Michael, an ATM program is an ability to match up the capital needs with the external financing, and so that would be our base case.

Speaker Change: as we move through the year.

Speaker Change: I think about when we roll forward our financing plan, you know an ATM tends to be a three-year program And so we're kind of done done with our 24 equity needs. And so as we look to 25 through 27

Andrew Cooper: And so, we're kind of done with our 24 equity needs. And so, as we look to 25 through 27, we'll provide any updates. But the 400 million is the number that we're targeting at the moment. And an ATM certainly remains the base case.

Speaker Change: We'll provide any updates, but the 400 million is the number that we're targeting at the moment, and an ATM certainly remains the base case.

Michael Lonegan: Great. Thank you.

Michael Lonegan: Great, thank you. And then going back to the regulatory leg docket, depending on when it's complete and what comes out of it, do you think you'll start preparing a rate case filing right away and file that when it's, you know, when that's complete, that filing is done and, you know, say four to five months later? And, you know, or could we even see a rate case before that docket is finalized? You know, in maybe various forms of what the regulatory lag docket could look like.

Michael Lonegan: And then, going back to the regulatory lag docket, you know, depending on when it's complete and what comes out of it. Do you think you'll start preparing a rate case filing right away and file that when it's, you know, when that's complete, that's done and, you know, say four to five months later? Or could we even see a rate case before that docket is finalized? and maybe various forms of what the regulatory leg docket could look like. Yeah, I think right now we're just still working through the docket and trying to understand directionally where that's going.

Speaker Change: Great, thank you, and then going back to the regulatory leg docket, you know, depending on when it's complete and what comes out of it, do you think you'll start preparing a rate case filing right away and file that when it's complete?

Speaker Change: Jeffrey Guldner, Amanda Ho

Speaker Change: You know in maybe various forms of what the regulatory lag docket could look like

Jeffrey Guldner: Yeah, I think right now we're just still working through the docket and trying to understand directionally where that's going, and then that will help inform our path from that point. So let's see what the next workshop looks like, see if they continue to work through the process, and obviously, we'll keep people posted.

Andrew Cooper: And then that will help inform our path from that point.

Andrew Cooper: So let's see what the next workshop looks like. See if they continue to work through the process, and obviously we'll keep people posted.

Michael Lonegan: Great, thanks for taking my question. Yep, thanks, Michael.

Michael Lonegan: Great, thanks for taking my questions.

Jeffrey Guldner: Yep, that's my call. Thank you.

Operator: Thank you. Your next question is coming from Travis Miller from Morningstar. Your line is live. Good morning.

Travis Miller: Thank you. Your next question is coming from Travis Miller from Morningstar.

Speaker Change: Great. Thanks for taking my questions. Yep. Thanks, Michael.

Travis Miller: Your line is live. Morning, thank you. Hey Jeff.

Speaker Change: Thank you. Your next question is coming from Travis Miller from Morningstar. Your line is live.

Travis Miller: Hey Jeff, you talked a lot at the beginning about the customer bill assistance and the higher bills and stuff. Is there any chance the weather, if it either stays hot or gets hotter, that that could impact working capital for you or the regulatory mechanisms that would offset some of that cash flow issue potentially?

Jeff Guldner: You talked a lot at the beginning about the customer bill assistance and the higher bills and stuff. Is there any chance with the weather if it either stays hot or gets hotter that that could impact working capital for you or the regulatory mechanisms that would offset some of that cash flow? So finishing potentially. Yeah, you know, certainly, you know, we've been working over the last number of years where there's a, you know, moratorium on disconnects and things during the summer. So our, you know, pace of customer receipts throughout the year, you know, tends to be fairly predictable.

Travis Miller: Good morning. Thank you.

Travis Miller: You talked a lot at the beginning about the customer bill assistance and the higher bills and stuff.

Travis Miller: Is there any chance with the weather, if it either stays hot or gets hotter, that that could impact working capital for you or the regulatory mechanisms that would offset some of that cash flow issue potentially?

Andrew Cooper: Yeah, you know, certainly, we've been working over the last number of years where there's a, you know, moratorium on disconnections and things during the summer. So our pace of customer receipts throughout the year tends to be fairly predictable. And so we plan our financing, both the long-term and the availability of short-term capital, to accommodate the normal pace of customer payments over the course of the year. And certainly, the programs that we participate in and direct funds directly from our bottom line, too, as well as the ones that we work with partners on, all provide an opportunity to, you know, kind of reduce some of the pressures on customers from a bill perspective over the course of the year, particularly as we come out of our summer.

Speaker Change: Yeah, you know, certainly, you know, we've been working over the last number of years where there's a, you know, moratorium on disconnects and things during the summer. So our, you know, pace of customer receipts throughout the year, you know, tends to be fairly predictable. And so we plan our financing, both the long-term and the availability of short-term capital to accommodate the normal pace of customer payments over the course of the year.

Jeff Guldner: And so we plan our financing, both the long term and the availability of short-term capital, to accommodate the normal pace of customer payments over the course of the year. And certainly the programs that we participate in and direct funds directly, you know, from our bottom line too, as well as the ones that we work with on partners, all provide an opportunity to, you know, to kind of reduce some of the pressures on customers from a bill perspective over the course of the year. Particularly as we come out of our summer season and those bills begin to be, you know, more front of mind for customers.

Travis Miller: And certainly the programs that we participate in and direct funds directly, you know, from our bottom line too, as well as the ones that we work with on Partners, all provide an opportunity.

Travis Miller: to kind of reduce some of the pressures on customers from a bill perspective over the course of the year, particularly as we come out of our summer season and those bills begin to be more front of mind for customers.

Travis Miller: Okay, you got it. And then another heat question: if we do see these unusual temperatures, what type of planning in terms of system resiliency or even equipment type planning do you do for the heat? I'm thinking extreme weather, taking out some of the equipment, as we've seen with extreme cold weather in other places. What type of contingencies do you have on your system like that?

Travis Miller: Okay, you got it.

Travis Miller: And then another heat question: if we do see these unusual temperatures.

Speaker Change: Okay, you got it. And then another heat question, if we do see these unusual temperatures.

Jeff Guldner: What type of planning in terms of system resiliency or even equipment type planning? Do you do for the heat? You know, I'm thinking extreme weather taking out some of the equipment, as we've seen with extreme cold weather in other places. What type of contingencies do you have on your system like that? That makes sense.

Speaker Change: What type of planning in terms of system resiliency or even equipment type planning do you do for the heat? You know, I'm thinking extreme weather, taking out some of the equipment, as we've seen with extreme cold weather in other places.

Jeffrey Guldner: That makes sense. Yeah, I'll start.

Speaker Change: What type of contingencies do you have on your system like that?

Jeff Guldner: Yeah, I'll start. I mean, that's part of the process, and we've obviously been through, you know, if you go back and look historically, the hottest temperature we've had in Phoenix was actually, was it 2018 or? It was a while ago. And so you always have to manage through with this. And there's a lot of focus around personnel. So how do you make sure that your crews who are working out in the heat have access to, you know, air-conditioned trucks and that we manage the workflow there. And then a fair amount of work to find equipment every year, making sure that we look for resiliency, that we monitor the equipment that does have some heat sensitive and Jake anything.

Jeffrey Guldner: I mean that's part of the process, and we've obviously been through it before. If you go back and look historically, the hottest temperature we've had in Phoenix was actually was it in 2018? It was a while ago, and so you always have to have to manage through this, and there's a lot of focus on personnel. So how do you make sure that your crews who are working out in the heat have access to the air-conditioned trucks that we manage the workflow there? And then a fair amount of work just on the equipment every year, making sure that we look for resilience, that we monitor the equipment that does have some heat sensitivity.

Speaker Change: Yeah, I'll start. I mean, that's part of the process, and we've obviously been through, you know, if you go back and look historically, the hottest temperature we've had in Phoenix was actually, was it 2018 or?

Speaker Change: It was a while ago. And so you always have to manage through with this. And there's a lot of focus around.

Speaker Change: So how do you make sure that your crews who are working out in the heat have access to, you know, air-conditioned trucks and...

Speaker Change: that we manage the workflow there, and then a fair amount of work just on the equipment every year, making sure that we look for resiliency, that we monitor the equipment, that it does have some heat sensitivity. Ed and Jake, anything?

Jacob Tetlow: Yeah, I think Jeff, you said it well. The only thing I'd add as well is the temperature we've seen so far as well within our design criterion, what we plan for. You know, it is interesting that while we saw sales higher in Q2, in large part due to weather, we still didn't break our peak demand compared to last year. And so that's really an indication that we saw higher load temperatures at night, and we had more consistent days around 110 degrees or above. But we actually didn't see the top-end extreme heat as much as we did the year prior.

Jeffrey Guldner: I think, Jeff, you said it well. The only thing I'd add as well is that the temperature we've seen so far is well within our design criteria and what we planned for. You know, it is interesting that while we saw sales higher in Q2 in large part due to weather, we still didn't break our peak demand compared to last year. And so that's really an indication that we saw higher low temperatures at night and we had more consistent days around 110 degrees or above, but we actually didn't see the top end extreme heat as much as we did the year prior.

Speaker Change: Yeah, I think, Jeff, you said it well. The only thing I'd add, as well, is the temperature we've seen so far is well within our design criteria and what we planned for. You know, it is interesting that while we saw

Speaker Change: sales higher in Q2, in large part due to weather, we still didn't break our peak demand compared to last year. And so that's really an indication that we saw.

Speaker Change: higher low temperatures at night and we had more consistent days.

Speaker Change: around 110 degrees or above, but we actually didn't see the top end extreme heat as much as we did the year prior. So from an equipment standpoint, we take it seriously. We have resiliency plans.

Jeffrey Guldner: So from an equipment standpoint, we take it seriously. We have disaster recovery plans. We study each summer, and that informs our future design criteria. But we're actually sitting pretty good in terms of having the impact on equipment fall exactly where we would expect it to be. And we'll continue to monitor and adapt along the way. Yeah, just a correction: the highest temperature in Phoenix was recorded in 1990. And so it is just something you do in a desert environment to plan for hot summers.

Jacob Tetlow: So, from an equipment standpoint, we take it seriously. We have resiliency plans. We study each summer, and that informs our future design criteria. But we're actually sitting pretty good in terms of having the impact on equipment fall exactly where we would expect it to be. And we'll continue to monitor and adapt along the way.

Speaker Change: We study each summer and that informs our future design criteria, but we're actually sitting pretty good in terms of having the impact on equipment fall exactly where we would expect it to be, and we'll continue to monitor and adapt along the way.

Jeff Guldner: Yeah, just a big correction. The highest tampon Phoenix recorded was in 1990, 122 degrees, and so it is just something in a desert environment you plan for hot summers.

Speaker Change: Yeah, just a correction, the highest temp in Phoenix recorded was in 1990.

Speaker Change: 122 degrees and so it is just something in a desert environment you plan you plan for hot summers.

Travis Miller: Whenever you want to send that heat to Chicago, I'd appreciate it. I'll even trade you some zero degrees over there if you'd like. I appreciate the thought.

Travis Miller: Whenever you want to send that heat to Chicago, I'd appreciate it. I'll even trade you some zero degrees over there if you'd like. I appreciate the thoughts.

Speaker Change: Whenever you want to send that heat to Chicago, I'd appreciate it. I'll even trade you some zero degrees over there if you'd like. I appreciate the thoughts.

Travis Miller: Thank you.

Operator: Thank you. Your next question is coming from Julie.

Julien Dumoulin Smith: Your next question is coming from Julien Dumoulin Smith from Jeffries.

Travis Miller: Thanks Travis.

Julien Dumoulin Smith: Your line is live.

Speaker Change: Thank you. Your next question is coming from Julian DeMoulin-Smith from Jeffreys.

Julien Dumoulin: Hey guys, can y'all

Julien Dumoulin Smith: Hey guys, can you hear me? Yeah, I really am. Hey guys. Pleasure. Thanks for the time. I appreciate the opportunity.

Julien Dumoulin: Hey guys, pleasure. Thanks for the time. I appreciate the opportunity.

Speaker Change: Your line is live.

Julian DeMoulin-Smith: Hey guys, can you hear me?

Julian DeMoulin-Smith: Hey, guys.

Julien Dumoulin: Hey, so maybe just coming back to the rate case timing and just the expectations of how this would filter in on the reg lag front, you know, obviously making good progress here on that front. It sounds like it wouldn't be too long, a short period of time subsequent to its resolution, say, in October, so early 25. Is your expectation here that, you know, ultimately, the impacts would be, call it mid-26-ish, if you want to put a tilde on it in terms of addressing that lag and having a partial year?

Julien Dumoulin Smith: Hey, so maybe just coming back to the the rate case timing and just the expectations of how this would filter in on the regular front. You know, obviously making good progress here on that front. It sounds like it wouldn't be too long a short period of time subsequent to the resolution, say in October, so early 25. Is your expectation here that, you know, ultimately the impacts would be, call it mid 26th, if you want to put a tilde to it in terms of addressing that lag and having a partial year. And then maybe you could be a little bit more specific on how you think the extent of that is going right now and on resolving some of that lag, just if I can press you a little bit further.

Julian DeMoulin-Smith: Pleasure. Thanks for the time. I appreciate the opportunity.

Speaker Change: Hey, so, maybe just coming back to the rate case timing and just the expectations of how this would filter in on the reg lag front, you know, obviously making good progress here on that front, it sounds like it wouldn't be too long, a short period of time subsequent to its resolution, say in October, so early 25.

Speaker Change: Is your expectation here that, you know, ultimately the impacts would be, call it mid 26-ish, if you want to put a tilde to it, in terms of addressing that lag and having a partial year?

Julien Dumoulin: And then maybe you could be a little bit more specific on how you think the extent of that is going right now in resolving some of that lag, just if I can press you a little bit further. Yeah.

Speaker Change: And then maybe you could be a little bit more specific on how you think the extent of that is going right now on resolving some of that lag. Just if I can press you a little bit further.

Jeffrey Guldner: Yeah, just, Julien, on the process. I mean, there's a workshop scheduled next in October. That's kind of the data point that is out there.

Jeff Guldner: Yeah, just Julien on the process. I mean, so there's a workshop scheduled next in October. That's that's kind of the data points that is out there. So more dialogue, and I think I would expect the commission might give a little more guidance, or at least have some dialogue on how they see that process moving forward. You know, once you see visibility into that, I think it's pretty standard. Everybody has about the same schedule. It takes about six months to put together a filing, and then it typically takes about a year to work through it. You've got factors like settlement possibilities and other things that come into the analysis.

Speaker Change: Yeah, just, Julian, on the process, I mean, so there's a workshop scheduled next in October. That's kind of the data point that is out there. So more dialogue, and I think, I would expect the commission might give a little more guidance or at least have some dialogue on how they see that process.

Jeffrey Guldner: So more dialogue, and I think I would expect the commission might give a little more guidance or at least have some dialogue on how they see that process. Moving forward, once you see visibility into that, I think it's pretty standard. Everybody has about the same schedule. It takes about six months to put together a filing, and then it typically takes about a year to work through it.

Speaker Change: moving forward. You know, once you see visibility into that, I think it's pretty standard. Everybody has about the same schedule. It takes about six months to put together.

Jeffrey Guldner: You've got factors like settlement possibilities and other things that come into the analysis. You know, we're in August right now, with the workshop coming in October. We'll see how the dialogue continues to go and then and then look at how that, uh... how that would affect the schedule and the timing, one of the things that you know you're starting to see and this goes back to a program that we had in place, and you probably remember it, the Arizona Sun program from a number of years ago.

Speaker Change: and then it typically takes about a year to work through it. You've got factors like settlement possibilities and other things that come into the analysis.

Jeff Guldner: And so, you know, we're in August right now, workshop coming in October. We'll see how the dialogue continues to go and then and then look at how that how that would affect the schedule and the timing.

Speaker Change: We're in August right now, workshop coming in October. We'll see how the dialogue continues to go and then look at how that.

Jeff Guldner: One of the things that, you know, you're starting to see, and this goes back to a program that we had in place. You probably remember it. There's on a sun program from a number of years ago. I think we got that approved in 2012 fish time frame, and that allowed us to move forward with a tracking mechanism to get more concurrent recovery capital that we were investing in that case with solar plants. And now that's part of the SRB process. And so there, there already is some movement that is helping us to address some of those regulatory lag items. The SRB is the one that was activated in the last in the last case and has applied to not just us, but another utility here in the in the state.

Speaker Change: that would affect the schedule and the timing, one of the things that, you know, you're starting to see, and this goes back to a program that we had in place, and you probably remember it, the Arizona Sun Program,

Jeffrey Guldner: I think we got that approved in the 2012-ish time frame, and that allowed us to... move forward with a tracking mechanism to get more concurrent recovery of capital that we were investing in that case with solar plants. Part of the SRB process, and so there already is some movement that is helping us to address some of those regulatory lag items. The SRB is the one that was activated in the last case and has applied to not just us but another utility here in the state.

Speaker Change: From a number of years ago, I think we got that approved in 2012 ish time frame and and that allowed us to To move forward with a tracking mechanism to get more concurrent recovery of capital that we were investing in that case with solar plants and now that's

Speaker Change: Part of the SRB process and so there there already is some movement that is helping us to address some of those regulatory lag items.

Speaker Change: The SRB is the one that was activated in the last case, and has applied to not just us, but another utility here in the...

Jeffrey Guldner: And so those are the kind of things that you just have to continue to work through as the commission addresses the issues so that we can get back to where there's more contemporary recovery of the capital that we're investing to serve the growth we have.

Jeff Guldner: And so those are the kind of things that you just have to continue to work through as the commission, as the commission addresses the issues, so that we can get back to where there's more contemporary recovery of the capital that we're investing to serve the growth we have.

Speaker Change: And so those are the kind of things that you just have to continue to work through as the commission as the commission addresses the issues so that we can get back to where there's more contemporary recovery.

Julien Dumoulin Smith: Awesome. And then related to that, if I can push you the SRB you just alluded to. I mean, in here there's there's no it's an evergreen program as in to the extent to which we get subsequent revisions on your generation needs, the sense of which that you're still negotiation on some of the assets here as long as goes through your typical procurement processes, all of that would still be eligible to participate in the SRB, right? Yeah.

Julien Dumoulin: And then related to that, if I can push you, the SRB you just alluded to, I mean, in theory, there's no, it's an evergreen program, right? As in, to the extent to which we get subsequent revisions on your generation needs, the extent to which you're still in negotiation on some of the assets here, as long as it goes through your typical procurement processes, all of that would still be eligible to participate in that SRB, right?

Speaker Change: of the capital that we're investing to serve the growth we have.

Speaker Change: awesome and then related to that if I can push it the SRB you just alluded to

Speaker Change: I mean, in theory, there's no, it's an evergreen program, right, as in, to the extent to which we get subsequent revisions on your generation needs, the extent to which that you're still in negotiation on some of the assets here, as long as it goes through your typical procurement processes, all of that would still be eligible to participate in the NSRB, right?

Jeffrey Guldner: Yes. Okay. Excellent. Thank you very much. Yes.

Julien Dumoulin Smith: Okay, excellent. Thank you very much.

Julien Dumoulin Smith: Yep, you bet.

Speaker Change: Yep.

Speaker Change: Okay, excellent. Thank you very much. Yep, you bet.

Operator: Thank you.

Operator: Thank you. Once again, everyone, if you have any questions or comments, please press star, then one on your phone. Your next question is coming from Paul Patterson from Glenrock Associates. Your line is live.

Operator: Once again, everyone, if you have any questions or comments, please press star, then one on your phone.

Speaker Change: Thank you. Once again, everyone, if you have any questions or comments, please press star, then one on your phone. Your next question is coming from Paul Patterson from Glenrock Associates. Your line is live.

Paul Patterson: Your next question is coming from Paul Patterson from Glen Rock Associates. Your line is live.

Paul Patterson: Hey, good morning, guys. I apologize for being slightly unclear, but it sounds to me from just listening to the call that perhaps you guys are expecting this regulatory lab for seeing to move somewhat rapidly from a regulatory, you know, in regulatory time. And I just want to make sure I understand this. So there's a workshop, as you mentioned, scheduled in October, but you think that things might move rapidly after that. I just wanted to get some sort of sense on that.

Paul Patterson: I apologize for being slightly unclear. It sounds to me, from just listening to the call, that perhaps you guys are expecting this.

Julian DeMoulin-Smith: Hey, good morning guys. Hey Paul, good morning. Just, and I apologize for being slightly unclear, but...

Paul Patterson: It sounds to me from just listening to the call that perhaps you guys are expecting this

Paul Patterson: Regulatory Lab is proceeding to move somewhat rapidly in regulatory time, and I just want to make sure I understand this. So there's a workshop, as you mentioned, scheduled in October, but you think that that... Things might move rapidly after that. I just wanted to get some sort of sense on that. And would it be safe to assume that you guys are not going to be filing a rate case until you get a determination in that proceeding?

Speaker Change: regulatory wide proceeding to to move

Speaker Change: similar

Speaker Change: rapidly from a regulatory, you know, in regulatory time.

Speaker Change: and I just want to make sure I understand this.

Speaker Change: There's a workshop, as you mentioned, scheduled on in October, but you think that that...

Speaker Change: that things might move rapidly after that. I just wanted to get to get some sort of sense on that and and would it be safe to assume that you guys are not going to be filing a rate case until you you get a determination in that proceeding?

Andrew Cooper: And would it be safe to assume that you guys are not going to be filing a rate case until you get a determination in that proceeding on the, you know, on the ladder, since we don't know where the proceedings ultimately going to go. I wouldn't, I wouldn't say that. I think again, we're in August; there's a workshop scheduled for October. I would expect that that workshop that the commission would have some dialogue on kind of where they feel they are in the process and what they think the timing is going forward. I think to your point, I think they are being pretty deliberate in how they're moving the workshop process forward, but it's kind of hard to sit here and give you expected dates and everything.

Jeffrey Guldner: On the latter, since we don't know where the proceeding is ultimately going to go, I wouldn't say that. I think, again, we're in August. There's a workshop scheduled for October. I would expect at that workshop that the commission would have some dialogue on kind of where they feel they are in the process and what they think the timing is, going forward. I think, to your point, I think they are being pretty deliberate in how they're moving the workshop process forward, but it's kind of hard to sit here and give you expected dates and everything.

Speaker Change: On the, you know, on the latter, since we don't know where the proceedings ultimately going to go, I wouldn't, I wouldn't say that. I think, again, we're in August. There's a workshop scheduled for October.

Speaker Change: I would expect at that workshop that the commission would have some dialogue on kind of where they feel they are in the process and what they think the timing is.

Julian DeMoulin-Smith: going forward, I think.

Julian DeMoulin-Smith: I think they are being pretty deliberate in how they're moving the workshop process forward.

Jeffrey Guldner: I think we'll see how the dialogue goes in October, see how comfortable they get with the information that they're hearing, and get a check-in at that point on what we expect to see from a process standpoint moving forward. Okay. Thanks for the clarification.

Paul Patterson: I think we'll see how the dialogue goes in October, see how comfortable they get with the information that they're hearing, and get a check-in at that point on what we expect to see from a process standpoint moving forward. Okay, thanks for clarification. Yep, I appreciate it.

Julian DeMoulin-Smith: But it's kind of hard to sit here and give you expected dates and everything. I think we'll see how the dialogue goes in October, see how comfortable they get with the information that they're hearing, and get a check-in at that point on what we expect to see from a process standpoint moving forward.

Paul Patterson: Okay. Thanks for the clarification. I appreciate it. Have a great day. Stay cool.

Operator: Have a great one. Stay cool.

Operator: Yep, thanks. Thank you.

Julian DeMoulin-Smith: Okay. Thanks for the clarification. I appreciate it. Have a great one. Stay cool. Yep. Thanks, Paul.

Operator: Thank you. That concludes our Q&A session.

Operator: That completes our Q&A session.

Operator: Everyone has concluded today's event.

Operator: You may disconnect at this time and have a wonderful day. Thank you for your participation.