Q3 2024 Evergy Inc Earnings Call
Good day, and thank you for standing by.
Welcome to the third quarter 'twenty 'twenty four ever G. Inc. Earnings Conference call. At this time, all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone you will then hear an automated message advising that your hands it's rice.
So let's draw your question. Please press star one again.
Please be advised that today's conference is being recorded.
I'd now like to hand, the conference over to your first speaker today, Peter Flynn Director of Investor Relations. Please go ahead.
Thank you Jill and good morning, everyone welcome to <unk> third quarter 2024 earnings Conference call.
Our webcast slides and supplemental financial information are available on our Investor Relations website at investors got average H Dot com.
Today's discussion will include forward looking information.
<unk> two and the disclosures in our SEC filings contain a list of some of the factors that could cause future results to differ materially from our expectations.
Also include additional information on a non-GAAP financial measures.
Joining us on today's call are David Campbell, Chairman, and Chief Executive Officer, and Brian Butler, Executive Vice President and Chief Financial Officer.
David will cover third quarter highlights provide updates on our generation plants, and our regulatory and legislative agendas.
Scott updates to our financial outlook.
Brian will cover our third quarter third quarter results retail sales trends in our long term guidance.
Other members of management are with us and will be available during the Q&A portion of the call.
I'll now turn the call over to David.
Thanks, Pete and good morning, everyone I'll begin on slide five this morning, we reported third quarter adjusted earnings.
A $2 <unk> per share compared to $1 88 per share a year ago. The.
The increase over last year was driven primarily by demand growth new retail sales in FERC investments.
Really offset by cooler summer weather and higher depreciation and amortization expense.
Year to date adjusted earnings are $3 46 per share compared to $3 27 per share a year ago.
With these solid results year to date, we are reaffirming our 2024 adjusted EPS guidance range of $3 73 per share to $3 93 per share.
Brian will discuss these earnings drivers in more detail in his portion of the remarks.
Brian as many of you know he joined the average <unk> on October one as our Chief Financial Officer.
Brian brings a strong track record of experience to our company and he'll be a tremendous addition to our leadership team I would also like to thank Jeff Les for his very able service in the interim role. We all look forward to working with Brian and I know he will be a great mentor and leader for our finance organization.
As part of today's announcement, we are establishing our 2025 adjusted EPS guidance range of $3 92 per share to $4 12 per share.
With a midpoint of $4 <unk> per share.
We're also establishing a long term growth target of 4% to 6% through 2029.
Based on the 2025 midpoint of $4 <unk> per share.
From 2026 to 2029, we anticipate being in the top half of its guidance range relative to the 2025 baseline.
I will provide more details in the upcoming slides.
I'm also happy to announce a 4% increase in our quarterly dividend or $2 67 per share on an annualized basis.
This increase is consistent with our updated growth outlook and working toward the midpoint of our 60% to 70% target payout ratio.
Let's move on to slide six where I'll highlight our recently announced new generation investments.
Will help enable the historic economic development opportunities in Kansas and Missouri.
As we outlined in our 2024 integrated resource plans.
Our overarching goal is to identify the most cost effective and resilient plan that reliably serve our customers across uncertain future scenarios.
We expect to achieve that goal through a balanced approach to new resource additions, including the use of the latest most efficient new technologies for dispatch will generation com.
Complemented by emissions free renewable resources that support economic development in the communities we serve.
which will create new skilled craft jobs and generate substantial property tax revenues.
We launched the predetermination process with the Kansas Corporation Commission yesterday, and we look forward to working with KCC staff, CURB, and other parties for a constructive outcome.
data center operations.
At a macro level, the continued robust customer demand in our service areas is supported by a strong labor market as the Missouri, Kansas, and Kansas City metro area unemployment rates remain below the national average of 4.1 percent.
As David noted in his earlier remarks, we expect weather normalized demand growth through 2029 of 2-3% when factoring in the impact of new large customer load.
While we have not yet included any of the additional six gigawatt plus customer pipeline in our five-year plan We certainly are in active talks with several large customers. We believe this pipeline represents real upside to our EPS and credit metric forecast
Let's now turn to our updated financing plan on slide 16.
As David discussed earlier, our updated five-year rolling capital investment plan contemplates $16.2 billion of investment from 2025 through 2029, including an incremental $1 billion of capital in 2025 and 2026 combined.
Our strong cash flows from operations will be supplemented by the issuance of debt equity and equity like instruments
Our first common stock issuances are planned for 2026 and 2027, at approximately $400 million in each of those years, and will be higher in 2028 and 2029, consistent with the increase in annual level of capital investments in those years.
Our 2025 guidance does not currently contemplate a common stock issuance next year.
So we will remain flexible and opportunistic in the timing and type of funding we deploy throughout the five-year plan as we balance earnings growth and balance sheet strength.
And as I stated earlier, there are several upsides to our EPS and credit metric forecast, including the potential load from the 6 gigawatt large customer pipeline.
Shifting to slide 17, I'll discuss key 2025 earnings considerations.
As we mentioned previously, we are introducing 2025 adjusted EPS guidance of $3.92 to $4.12 per share.
Primary drivers for consideration include load growth ramping up from the metadata center in our Missouri West Territory.
and the Panasonic EV battery manufacturing plant in Kansas Central. Growth will also be driven by new rates Missouri West, which will go into effect in January, a potential partial year impact from new rates at Kansas Central as early as the fourth quarter 2025, and ongoing recovery of our investment in FERC jurisdictional projects.
We expect these positive drivers to be partially offset by the impact from depreciation and interest expense, net of accounting for the deferral benefits from PISA in both Kansas and Missouri.
Moving to slide 18, we highlight key adjusted EPS drivers beyond 2025.
When we expect growth in the top half of our 4-6% target.
Meaningful margin uptick will begin to manifest itself as we expect a significant increase of growth in each year, 2026.
through 2029 as Panasonic, Meta, and Google work towards their full run rates.
We also plan to have more frequent rate cases to avoid large customer rate increases and to ensure the financial stability of our utilities.
In short, we believe our long-term plan strikes an appropriate balance of affordability for our customers.
Strong infrastructure and economic development for our communities, and solid EPS growth.
I will close on slide 19 with the recap of our future financial expectations.
With solid results year to date, we are reaffirming our 2024 adjusted EPS guidance of $3.73 to $3.93 per share.
We are also establishing our 2025 adjusted EPS guidance at $3.92 to $4.12 per share, with the midpoint representing 5% growth from 2024.
From the new baseline midpoint of 4.02.
in 2025, we expect to grow in the top half of our 4% to 6% adjusted EPS target range through 2029.
This is a plan we have high confidence in, with many tailwinds for our business.
Our employees are focused on consistent execution of our operational and financial goals as we advance our strategic objectives of ensuring affordability, reliability, and sustainability for our customers.
Speaker Change: And with that, we will open the call for your questions.
Speaker Change: Thank you, Brian. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we prepare the first call.
Speaker Change: The first question comes from Shaw Perezzi with Guggenheim Partners. Go ahead, your line is open.
Hey guys, good morning.
Speaker Change: Morning, Char. Morning. Brian, congrats on your first earnings call, buddy. Thanks, Char. Happy, very excited to be here.
I'm sure, I'm sure. Congrats.
Speaker Change: David, the industry is starting to see some of the, you know, the larger loads trickle into CapEx earnings growth as we, you know, as we look at this kind of top end of the four to six you guys rolled out today.
Speaker Change: Is there kind of a general earning sensitivity can give us for this customer class as we look at the potential six gigs plus coming down the line? I guess put differently, could another deal or two put you over the top end at this point? I mean, you seem to elude it to greet it, but just kind of curious in the context of the four to six. Thanks.
Speaker Change: Charles, great question. I'd echo Brian's comments about our high confidence in the plan with some real tailwinds. The plan as currently laid out
only include the three announced customers.
Speaker Change: So we've got high confidence in the top half of our range through 2029 with the three announced customers.
Speaker Change: we land additional ones, that would be upside opportunity. So I won't give you that always dependent on how big and which ones and rates, but we see real tailwinds, real potential from any criminal customers. And we have a couple of very active ones in a big pipeline.
Speaker Change: Okay. No, that's helpful because I think that answered the question. And then just, obviously, you have your CAP structure workshop coming up on the 20th. You talked about it on the...
Prepared
Speaker Change: It's not exactly kind of a decisional or a docketed process. I guess, any updated thoughts on how this will feed into your 25 case and any updated thoughts on the 25 GRT itself? Thanks, guys.
Speaker Change: Another good question. So, Lee, and you have it exactly right, excuse me, I've got to...
Speaker Change: I'm so excited I've got a frog in my throat, but the Capital Structure Workshop is one where it's not a decisional meeting.
Speaker Change: It's an opportunity to have a dialogue about a very important driver of the competitiveness of Kansas and the ability to attract capital. So we view it as an opportunity for us to share information around
Speaker Change: About the economic development landscape, the importance of attracting capital and landscape when many other jurisdictions are in the same posture.
Speaker Change: what the common practices are and really outside of a litigated proceeding have the opportunity to have a robust dialogue around it.
It's not a decisional meeting, it's a workshop.
Speaker Change: It'll be manifested, kind of results in how the Kansas rate case advances next year and years following. But even setting up that dialogue outside of a litigated proceeding we think is a constructive step. So we're excited to have that workshop. We'll have...
Speaker Change: presentations jointly with with staff. We'll have some outside presenters who are there. It'll be largely a dialogue. In terms of the general rate case, we plan to file in Kansas Central as I mentioned in the first quarter of 2025.
That schedule, the rates will go into effect.
Speaker Change: sometime in the early or in the fourth quarter of next year as well.
Speaker Change: So we look forward to that discussion, and it's going to be all reliability-focused investments. You know, we don't have any big generation that's come along in that time frame, so it will be investments that will be made through the last rate case and reflective of a more regular cadence, which I think avoids customers having to see a big step change if you have a regular cadence rate case.
Speaker Change: You'll see that filed in the first quarter of next year.
Speaker Change: Perfect. Thanks guys. Appreciate it. See you in a couple days and congrats again, Brian. See you.
Speaker Change: See you soon, Shara. Thank you. One moment for our next question.
Speaker Change: The next question comes from Julian Donalyn Smith with Jeffries. Go ahead, your line is open. Hey, good morning team. Brian, congratulations again. Pleasure. Thank you, Julian. Morning, Julian.
and Matthew Walsh. Thank you. Thank you.
Hey, hey!
Speaker Change: So nicely done team. Look, maybe to follow up on Shara's line of questioning here, I mean, when you think about, you know, what could put you over the edge here, and you talk about that top end here, I'm going to continue to needle you a little bit on this. How do you think about some of the other angles, right? So,
Speaker Change: You talk about including a significant portion of the IRP, what's remaining, and then separately and related, you know, SPP's come up with this ITP here, seems pretty robust. How do you think about what's reflected in terms of that into this latest plan update, if you will?
Up.
Julian: Do you read and digest quickly as always, Julian? So how would I frame it? So I and Brian's been great to have on the team because he's taking a clean look at things. And I think the tone and content of his remarks.
Julian: I would echo, we have high confidence of the plants in front of us.
Speaker Change: It's based on these three customers in the CAPEX plan that we have. We know how important execution is so we want to put a plan out there that we have high confidence in and executing.
Speaker Change: We did notice a substantial portion of the IRP, so the main elements, there's a big solar portion of our solar investment that you see coming online in 2027 in the IRP that we expect to do through a PPA.
Speaker Change: and there's a in the out years a CCGT and a CT that have not yet been included. So those all represent potential additional capital and then what I'd emphasize is the robust discussions we're having with large new customers that all represents opportunity as well.
Speaker Change: But it was really important for us to put out a plan that we had high confidence in executing. And that's exactly what we've done, and we really see a lot of tailwinds, as Brian described.
Go ahead, please.
Speaker Change: Victor when you are talking about earlier or is this more about just regulatory clarity et cetera, and maybe the same dynamic on that solar PPA. The trick is you are uncertain, whether it'll be a PPA or an ownership opportunity I presume.
Julian: I would bifurcate the two Julian we do expect the solar opportunity to be a PPA I would say for the gas plants is just it's a little it's a level of conservatism, we ran them through the ERP, they're needed based on the current three announced customers in a load that we see in our system. So.
Julian: We expect that we're going to need those plants, but.
Speaker Change: Those are the plants that are coming on line I think it's in the 2031 in 2000 22032 timeframe. So I just view it as a we expect they'll still be built as a level of conservatism and also as we will walk through the process with your plants. As you saw there was a lot of enthusiasm and support for the gas plants announcements that we made a.
Speaker Change: A couple of weeks ago in Kansas, We had the governor the speaker of the house the President of Senate key local officials chairs of the respective house and Senate Committee. So there's a lot of support for these.
Speaker Change: For the investments in these communities to the dispatch will generation that represents so.
Julian: Julian as we want to we have a plan we have high confidence in and we think we have some real tailwind as an upside.
Speaker Change: Alongside that plan.
Speaker Change: Got it and just to clarify here I mean, basically as you roll forward and eventually include the CCT I mean, the plan basically or effectively accelerates here as best I read. It obviously you talked about the high end of the plan, but it seems like it even further accelerates if you roll up a further period forward if you will.
Speaker Change: Is that kind of the way to start to read this as the Capex just so long dated whether it's the Tc or the ITT.
Speaker Change: I think adding the.
Speaker Change: No two gas plants would.
Speaker Change: <unk> increased the capital investment would be towards the back end of the plan right those units come online and 31% and 32, but it would be further incremental investment.
Speaker Change: Relating to further rate base growth and again that was reflected in ERP and reflects our approach to a balanced mix of generation and prioritizing affordability alongside reliability and sustainability. So yes, if adding.
Speaker Change: Adding those in would be additional capital in the outer years of the plan.
Speaker Change: Got it alright, sorry for all the details here really appreciate it and best of luck again.
CDI: Well CDI thanks Julien.
Speaker Change: One moment for our next question.
Speaker Change: Next question comes from the line of <unk> <unk> with Evercore go ahead. Your line is open.
Speaker Change: Hey, Dave Good morning, Thank you for taking my questions, Brian Mike Congratulations to you as well.
Yes.
Speaker Change: Absolutely Sir so just guys can you talk about the.
Speaker Change: The cadence of the long term growth rate upper half of our four to six is that a range that you will hit.
Speaker Change: Or is that more sort of a CAGR approach tied to rate case timing et cetera et cetera.
Speaker Change: Yes, good question.
Speaker Change: And just to reiterate we've established our 2025.
Speaker Change: Guidance range in part B give a baseline for that 4% to 6% following 2025 and a top half.
Speaker Change: Expecting the top half of that range in general we're going to have consistent execution of the top path. There are year over year that can be found dynamic dynamics relating to timing. So we haven't given year over year guidance, but our overall goal is for consistency, but there can be some dynamics year over Europe in particular.
Speaker Change: Jurisdictions, and our relative size can drive some <unk>.
Speaker Change: <unk>, but we don't expect to be all that significant and certainly our goal is to be consistent we know that that's what the investors like to see and Thats. We will strive for a more regular cadence of rate cases, I can help with that and it can also help from a customer perspective, we always balance that of course, when we think about timing. Because then there is a more predictable and sort of ratable impact on customers as well.
Speaker Change: Got it so more close to.
Speaker Change: Linear and consistent growth year on year out.
Speaker Change: That's great and then just as you as you think about regulatory lag.
Speaker Change: And you've got all this constructive legislation the state youre going to be more active re filing cycle, how should we think about regulatory lags throughout your five year plan.
Speaker Change: Yes, there, Jeff I'll take that.
Speaker Change: I'll just add onto it David said before I really think.
Speaker Change: 2026 is right around the corner and we have a lot of momentum in <unk> for the plan.
Speaker Change: That are going to kick in in.
Speaker Change: Beginning in 'twenty, five, but certainly in 2026 and beyond and as you think about our five year plan.
Speaker Change: Your question around regulatory lag in rate case cadence, we certainly R. R.
Speaker Change: We're pleased to have both in Kansas and Missouri.
Speaker Change: As you know we have see weapon rates for new gas generation, that's really important to help our credit metrics as we.
Speaker Change: We make these large of investments for our customers.
Speaker Change: So regulatory lag is certainly.
Speaker Change: Better manage under the provisions of pizza going forward.
Speaker Change: Not that there's not any that are still going to be some regulatory lag and with this large of an investment.
Speaker Change: Profile over the next five years it can be important that we stay current on our recoveries of investments. So thats why youll see as David described as being a bit more irregular in our cadence think about it as roughly every 18 months for most jurisdictions, but not all and you guys. All I'd add is I think we've seen in <unk>.
Speaker Change: And we've got some peer utilities in the Missouri jurisdiction.
Speaker Change: Stiction Pisa creates a framework, where you can manage a regulatory lag are.
Speaker Change: On a pretty regular cadence for the other utilities in Missouri, as well reflecting that.
Speaker Change: It doesn't lead to the earnings contribution and that just helps to mitigate lag. So there is still.
Speaker Change: We have a regular cadence. So we're really pleased to have Pisa enacted in Kansas not only for the provisions and the regulatory lag mitigation, but because it reflects.
Speaker Change: The consistent and widespread support for investment to support economic development, Kansas State. So.
Speaker Change: We've got mechanisms in Kansas now they are actually slightly ahead of misery, because there is 90% deferral, rather than 85% and the seaway provision.
Speaker Change: On the Kansas side, not yet on the Missouri side. So we think there are tools to manage that regulatory lag.
Speaker Change: But a regular cadence of rate cases will be important and again from my perspective also beneficial for customers because little more predictable predictable and more irregular as oppose to having longer delays and then step function increases.
Jeff: I appreciate that discussing very helpful, but just kind of putting a finer point on it Jeff.
Speaker Change: So are you modeling substantial improvement in regulatory lag.
Speaker Change: As you rollout this five year capital plan or how should we think about that maybe just directionally. If you don't want to quantify it.
Speaker Change: Yes, I mean directionally there is no doubt as we.
Jeff: Ill give it to you this way Jeff.
Jeff: When we went through the modeling.
Jeff: What is able as David mentioned to come in with some fresh lenses.
Jeff: Quite fortunate to come into the company.
Jeff: After.
Jeff: There were some the company had not some significant significant achievements in 2024, we've talked about the supportive legislation of Kansas constructive rate case settlement, Missouri, and then the Google announcement in the second quarter.
So certainly the team has been through very much the detailed planning.
Jeff: We've looked at earnings growth that is.
Jeff: As I mentioned very strong beginning 2026, which is right around that corner.
Jeff: Added to load growth, we expect but with <unk>, we now have rate base growth at 8% versus the past. It was 6%. So all those things give us tremendous confidence in being in the top half of that 4% to 6% growth through 2029.
Jeff: I do think we are.
Speaker Change: Being conservative conservative in our messaging as David mentioned, because we want to we want to execute across our work streams.
Speaker Change: And firmly land at a higher growth rate hopefully in the future but.
Speaker Change: Directionally speaking for sure regulatory lag is is less burdensome than it was in previous plans given the provisions of the law we have.
Speaker Change: Thank you guys appreciate all the commentary there thanks so much.
Speaker Change: Thank you. Thank you.
Speaker Change: One moment for our next question.
Speaker Change: The next question comes from Michael Sullivan with Wolfe. Please go ahead. Your line is open.
Michael Sullivan: Hey, good morning.
Speaker Change: Good morning, just hey, David just picking up on that last comment.
Speaker Change: Point, you all were making I guess just at a high level, how should we think about seeking rate base growth.
Speaker Change: By two percentage points, and then that only translating to.
Speaker Change: The EPS CAGR going up.
Speaker Change: Half a percentage point I guess, if you think about midpoint to upper half.
Michael: So I think Michael way.
Speaker Change: I think Bob you can model from all expect if you look at our capital investments over time.
Speaker Change: Vega significantly larger in the out years of the plan that it also reflected the 8% rate base growth is the average from 24 to 29 as can be more accelerated in the out years. So we did provide a sort of an overall integrated growth outlook, that's going to be and as Brian described we got some tailwind going into 2010.
Speaker Change: Six.
Speaker Change: So the way I look at it Michael is that we've got potential and we believe some tailwind to drive.
Speaker Change: Profitability drivers over time.
Speaker Change: Our significant new amplify in the back half of the plan that we provide an overall outlook that we're confident in <unk> off of that 2025 baseline starting 2026.
Speaker Change: In other words, there is upside potential, particularly as we get into the out years.
Speaker Change: Okay. No. That's helpful. I mean, I think part of it is just also the introduction of equity and I was just maybe looking for more color on.
Speaker Change: The amount.
Speaker Change: The amount of equity it is actually.
Speaker Change: How much youre introducing is more than half of the Capex increase and I think you're also kind of moderating the dividend growth a little bit as well. So just how do we think about that on the funding side of things.
Speaker Change: Yes.
Speaker Change: And I'll, let Brian weigh in as you know what we said in the past was that we did not anticipate based on our prior capital plan.
Speaker Change: Equity issuances before 2026 now implicit in that Michael as you know is that equity issuances would begin.
Speaker Change: In 2027 in 2028, so I would encourage you to think about the equity interest issuances. We described today is also.
Speaker Change: We're not talking about what we what was also in the plan before as well as what we need to do for funding with respect to the incremental investments that we've made hopefully that makes sense.
Speaker Change: It does.
Speaker Change: Yes, and in terms of timing and overall levels and I think this is Brian.
Speaker Change: Brian So actually Brian you want maybe want to go over again with our expected sort of size and cadences sure time, recognizing that we'll be flexible and opportunistic.
Speaker Change: Absolutely.
Speaker Change: I would say Michael is as you understand we're going to be targeting the 15% <unk>.
Speaker Change: That target throughout.
Speaker Change: And as I discussed earlier, our 2025 EPS guidance does not contemplate a new common stock issuance in 2025, so I just want to be clear about that as you think about the out years.
Speaker Change: Equity needs began in 'twenty six 'twenty seven because again, we added a lot of capital to the plan and $25 26.
Speaker Change: It does grow in 'twenty eight 'twenty nine.
Speaker Change: As the capital plan grows.
Speaker Change: But but as far as is.
Speaker Change: Five to seven question.
Speaker Change: Increasing the not increasing to five to seven staying at four to six in the top half of that and yet rate base going up 2%.
Speaker Change: As David said, there's a lot of <unk> and certainly I think the short answer to your question is conservatism because.
Speaker Change: Because we want to we want to execute and deliver on this plan meet or beat expectations and we've got a lot of tailwind and we'll reevaluate periodically our long term growth.
Speaker Change: Prospects.
Speaker Change: Okay I appreciate all the color if I could just do one more real quick.
Speaker Change: Cost of the gas plants can you give us any rough estimate there.
Speaker Change: Thank you for the clarifying question the gas plants are definitely in our forward Capex plan.
Speaker Change: Julian was.
Speaker Change: Asked a good question because it yields we described in the release in my script that we've included a substantial portion.
Speaker Change: The integrated resource plan. So we've included the gas plants that are in our integrated resource plan.
Speaker Change: Through 2030, there is <unk> in 2031 in 2032 that are not yet included at this time, it's about 1000 megawatts together.
Speaker Change: Of the ones that aren't included.
Speaker Change: Correct.
Speaker Change: Any RP slated to come online in 2031 2032, so its capital in the out years of the plan, but again in the spirit of let's call it conservatism.
Speaker Change: We do think there'll be needed.
Speaker Change: Broad based support for those kind of investments in our service territory, but we just launched the process for the first set so Walmart shoe systematically it's very important for us to work closely and constructively with our regulators obviously as we move through this and we will always be focused on that.
Speaker Change: As we go through this process.
Speaker Change: Okay, Great understood and then I think you answered my question just a minute ago on supply chain are you able to go through.
Speaker Change: P&C RFP process.
Speaker Change: Procure some of the equipment before getting the pre determination.
Speaker Change: Sure.
Speaker Change: Well, it's an insightful question the bulk of the spend is would of course follow up redetermination. So.
Speaker Change: We'll line up and have any of our bus contracting practices in how we what risk we take beforehand, but we're taking some steps to lineup slots and otherwise.
Speaker Change: Modest risk relative to overall project size of course, but pre determination as a key gating item for the vast majority of the stone.
Speaker Change: Sure. Okay, Thats all I had thanks so much.
Speaker Change: Thank you. Thank you.
Speaker Change: One moment for the next question.
Speaker Change: Our next question comes from Ryan Levine with Citi Go ahead. Your line is open.
Ryan Levine: Good morning.
Speaker Change: One follow up in terms of your engagement with these hyperscale customers when youre looking at your supply chain.
Speaker Change: Is it safe to say that any incremental generation at this point would not be eligible or available until the 2031 and beyond time period, and how does that shape the pace of conversations with these customers.
Speaker Change: Well, it's part of the magic of the conversation so it's Brandon.
Ryan Levine: We're in the middle of it how does their interest primarily a speed at this stage.
Ryan Levine: A lot of that comes down in transmission and distribution and availability as well and the specific ramp rate to the customers.
Ryan Levine: We the advanced discussions that we have for the incremental 500 megawatts 1000 megawatts.
Ryan Levine: We're.
Ryan Levine: Part of that active discussion as we believe being able to lineup opportunities to.
Ryan Levine: And that kind of stuff or is it just.
Ryan Levine: Referring to common equity I guess, what I'm, saying is there any potential for.
Ryan Levine: Is there any distinguishing between the two comments.
Speaker Change: Great question, Paul Yes, no plans for common equity in 2025, Youre, absolutely right will be.
Ryan Levine: Thoughtful about market conditions and be opportunistic as we think about 'twenty six as we roll through 2025, but nothing on common stock that we think will become outstanding during the year.
Ryan Levine: We still have a little bit of our financing plan to finish out for 2024, we have some holding company debt, we need to term out roughly in the neighborhood of $4 million to $500 million.
Ryan Levine: And Youll see in our financing plan footnotes that we were going to evaluate whether we do unsecured debt or junior junior subordinated note to fill that.
Ryan Levine: But all of the potential interest costs associated with that issuance are fully baked into our 2025 EPS plan.
Ryan Levine: So thats just a little bit of.
Ryan Levine: Finer detail on that financing side that I wanted to give you.
Ryan Levine: Okay.
Ryan Levine: Then.
Ryan Levine: With respect to the robust discussions.
Ryan Levine: When do you think.
Ryan Levine: They might come to some sort of conclusion or something that what do you think of the announcement if there were to be one might might potentially come out.
Speaker Change: Hi, Paul.
Speaker Change: Virtual discussions you can set timeline, but then it set goals and objectives.
Speaker Change: We hope to.
Ryan Levine: I know from a counterparty perspective as well we are advancing knows with the goal of trying to wrap something up by year end and certainly by the year end call. So there is a time urgency on both sides related to it takes two to tango Mis cases, while the one counterparty. So we don't fully control the timeline, but we do know is that there's very strong interest very active does.
Ryan Levine: <unk> is getting down to the <unk>.
Ryan Levine: Details.
Ryan Levine: But these are of course these are large loads complicated approaches so.
Ryan Levine: I can't guarantee anything, but we're targeting the next next few months given how activities discussions are.
Speaker Change: Okay great.
Speaker Change: And then finally.
Speaker Change: On the <unk>.
Speaker Change: The current projections that you have on the 8% rate base growth.
Speaker Change: It sounds like you said very achievable.
Speaker Change: But what's the how.
Speaker Change: How should we think about what what's your expectations are in terms of the potential REIT.
Speaker Change: <unk> trajectory.
Speaker Change: For customers during that.
Speaker Change: During this period of time this through 2029, obviously its going to vary and what have you, but just roughly speaking.
Speaker Change: How should we think about that.
Speaker Change: The rate impact.
Speaker Change: The current plan.
Speaker Change: Yes, Paul and I think how we describe it as highly confident we would emphasize that point I. Appreciate the question because working.
Speaker Change: All of this plan, we will work closely with our regulators as we implement it because this is about supporting and helping you at all.
Speaker Change: Advance the economic development opportunities and growth in our area. So.
Speaker Change: We believe that the plan lines up with our rate trajectory Thats in line with inflation.
Speaker Change: That's important for US we've made tremendous progress on improving our regional rate competitiveness. These past few years.
Speaker Change: And we don't want to let up on that and the growth that we're seeing helps enable making these significant investments helping to diversify our portfolio add to dispatch will generation.
Speaker Change: But the target is to keep line rates in line with inflation.
Speaker Change: Okay, what is your expectation.
Speaker Change: That seems to be changing here on the streets.
Speaker Change: When you think about inflation what are you guys I mean is that.
Speaker Change: The generic whatever replacement is or what.
Speaker Change: Do you guys have.
Speaker Change: Protection from inflation.
Speaker Change: In General Paul I think we're closer to the historical view of where inflation goes what the fed target is there is some tie in with what actual inflation is because obviously you can have an impact on our costs, but.
Speaker Change: We're hopeful that that inflation is trending towards the 2% range it could be in the mid twos going forward, but your guess is as good as mine with the election impacts may be.
Speaker Change: General expectation in the macro economy is that inflation could be higher so I will not get into that game.
Speaker Change: Because there are many who are more thoughtful about that but no.
Speaker Change: Our view is that we.
Speaker Change: More with it in line with historical trends of deflation and again our goal is to keep affordability at the forefront make sure that we're continuing to maintain and advance the original rate competitiveness.
Speaker Change: Okay, and then just finally on the <unk>.
Speaker Change: The gas plant, that's been announced and everything it sounds very.
Speaker Change: No.
Speaker Change: Regular stuff there is nothing.
Speaker Change: There is no.
Speaker Change:
Speaker Change: There is no plan for Youre not going to be asking you a CCN or argue for any specific something like a ccs or.
Speaker Change: <unk>.
Speaker Change: It's something that some new technology or something thats associated with it I think you mentioned hydrogen, but I think that's hydrogen ready could you just I mean, it sounded to me like things were pretty much.
Speaker Change: Kind of.
Speaker Change: Regular plant things and nothing no real advance technology or something out of it.
Speaker Change: The ordinaries am I right about that.
Speaker Change: Paul what I would describe is it these are deep.