Q4 2024 The Southern Co Earnings Call
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If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
Speaker Change: As a reminder, this conference is being recorded I would now like to turn the call over to Mr. Greg Macleod Director of Investor Relations. Please go ahead Sir.
Greg Macleod: Thanks, Robert Good afternoon, and welcome to Southern company's fourth quarter 2024 earnings call. Joining me today are Chris Womack, Chairman, President and Chief Executive Officer of Southern Company, and Dan Tucker Chief Financial Officer.
Good afternoon, my name is Robert and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Southern Company fourth quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise.
Greg Macleod: Let me remind you that we will make forward looking statements today in addition to providing historical information.
Greg Macleod: Various important factors could cause actual results to differ materially from those indicated in the forward looking statements, including those discussed in our Form 10-K and subsequent securities filings.
As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Greg McLeod, Director Investor Relations. Please go ahead, sir.
In addition, we will present non-GAAP financial information on this call reconciliations to the applicable GAAP measure are included in the financial information. We released this morning as well as the slides for this conference call, which are both available on our Investor Relations website at Investor <unk> Southern company Dot Com at this time I will turn the call over to Chris.
Greg McLeod: Thanks, Robert. Good afternoon, and welcome to Southern Company's fourth quarter 2024 earnings call. Joining me today are Chris Womack, Chairman, President, and Chief Executive Officer of Southern Company, and Dan Tucker, Chief Financial Officer.
Chris Womack: Thank you Greg.
Chris Womack: Good afternoon, and thank you for joining us today.
Greg McLeod: Let me remind you that we will make forward-looking statements today in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements, including those discussed in our Form 10-K and subsequent securities filings.
2024 was an outstanding year for southern company, both operationally and financially.
Chris Womack: We achieved adjusted earnings at the very top of our EPS guidance range, which represents 11% growth from our 2023 adjusted results.
In addition,
We will present non-GAAP financial information on this call.
Chris Womack: All of our business units executed on their plans and delivered.
Greg McLeod: Reconciliations to the applicable gap measure are included in the financial information we released this morning as well as the slides for this conference call, which are both available on our investor relations website at investor.southerncompany.com. At this time, I'll turn the call over to Chris.
Chris Womack: Exceptional value to our customers and investors alike.
Chris Womack: I am incredibly proud of how our team continued to put customers first throughout 2024.
Chris Womack: While this is our daily mission.
Chris Womack: Our dedication was especially evident as our team came together over the past year in response to several weather events, which adversely impacted many of our customers, including the most destructive storm and Georgia Power's history. This past fall.
Chris Womack: Thank you, Greg. Good afternoon and thank you for joining us today.
Chris Womack: 2024 was an outstanding year for Southern Company, both operationally and financially.
Chris Womack: We achieved adjusted earnings at the very top of our EPS guidance range, which represents 11% growth from our 2023 adjusted results.
Chris Womack: Delivering clean safe reliable and affordable energy to the communities and customers. We are privileged to serve will remain our top priority.
Chris Womack: All of our business units executed on their plans and delivered exceptional value to our customers and investors alike.
Chris Womack: Looking forward.
Chris Womack: We believe our portfolio of companies is incredibly well positioned to capitalize on significant opportunities to serve growth and improve our local economies.
Chris Womack: I am incredibly proud of how our team continued to put customers first throughout 2024.
Well, this is our daily mission.
Chris Womack: Our dedication was especially evident as our team came together over the past year in response to several weather events which adversely impacted many of our customers, including the most destructive storm in Georgia Power's history this past fall.
And to sustain success over the long term.
Chris Womack: The foundation of our business model remains our state regulated utility franchises the.
The tremendous value inherent in our three electric utilities and forward natural gas distribution utilities is a function of our continuous focus on our 9 million customers.
Chris Womack: Delivering clean, safe, reliable, and affordable energy to the communities and customers we are privileged to serve will remain our top priority.
Chris Womack: Our constructive regulatory environment with orderly processes and service territories with strong long term fundamentals.
Chris Womack: Looking forward, we believe our portfolio of companies is incredibly well positioned to capitalize on significant opportunities to serve growth and improve our local economies and to sustain success over the long term.
Chris Womack: Economic development activities at our utilities is robust.
Chris Womack: And should provide a tremendous foundation for regular predictable and sustainable long term earnings growth.
Chris Womack: The foundation of our business model remains our state regulated utility franchises.
Chris Womack: Over the past year more than 150 companies either announced expanded operations have made the decision to locate new facilities and our south eastern footprint.
Chris Womack: The tremendous value inherent in our three electric utilities and four natural gas distribution utilities is a function of our continuous focus on our nine million customers.
Chris Womack: These projects are expected to support over 20000, new jobs further highlighting that the region. We proudly serve is thriving.
Chris Womack: are constructive regulatory environments with orderly processes and service territories with strong, long-term fundamentals.
Chris Womack: Some of the larger announcements over the past year, when the manufacturing entertainment chemical and metals industries.
Economic Development Activity
Chris Womack: The economic development pipeline from large electric load customers, including data centers and large manufacturers.
Chris Womack: Represents over 50000 megawatts of potential incremental load by the mid 2000 Thirty's.
Chris Womack: Data centers alone represent roughly 80% of that potential load, while our disciplined approach to forecasting results and our risk adjusted outlook for sales growth comprised of comprised of only a fraction of the F&I development pipeline.
Chris Womack: We are encouraged to have commitments for over 10000 megawatts with advanced discussions in progress for even more.
Chris Womack: We remain committed to our approach to sustainably serving this exciting growth opportunity, including pricing and contract terms designed to protect our investments and provide economic benefits back to existing customers.
We are also encouraged to see the data center momentum first observed and Georgia expanding into both Alabama and Mississippi we.
Chris Womack: We recently signed contracts to serve the power needs of data centers in these two states that total over 1000 megawatts.
Chris Womack: While our state regulated utilities are expected to represent approximately 95% of our projected capital investments. We have also continued to invest in our other complementary strategically aligned businesses.
Chris Womack: Many of these businesses add depth to our vertical integration and provide us with unique market insights that help us attract and better serve customers in our regulated footprint. They also represent potential opportunities to add durability to our long term earnings trajectory.
Speaker Change: Southern power.
Our competitive power business represents a terrific complement to our state regulated businesses.
Speaker Change: Stanley all of its assets are under long term contracts with creditworthy counterparties.
Speaker Change: And we don't take meaningful commodity risk.
Speaker Change: And total southern Power's portfolio has approximately 13000 megawatts of capacity across 50, plus generating facilities in 15 states.
Speaker Change: Clothing, approximately 7000 megawatts of natural gas generation 3000 megawatts of solar and 3000 megawatts of wind.
Speaker Change: Southern power has 500 megawatts of solar currently under under construction with projected in service dates in 2025 and 2026.
Speaker Change: We will continue to be opportunistic on new renewable energy projects that meet our stringent risk return criteria.
Speaker Change: The burgeoning need for reliable dispatch of coal natural gas capacity.
Speaker Change: Unlocks for significant opportunities for southern power.
Speaker Change: First as contracts on our existing natural gas fleet come up for renewal beginning in early 2000 authorities the load growth in the southeast is expected to support future renewal pricing that is significantly higher than our existing contracts.
Speaker Change: Second.
Speaker Change: Meaningful upgrade opportunities are being evaluated on southern powers legacy natural gasoline.
Speaker Change: These could translate into several hundred additional megawatts available to meet future market demands for our capacity.
Speaker Change: Southern power has options at his existing plant sites to build new brownfield power plants in the southeast and.
And lastly, southern Power's exploring opportunities outside of the southeast to serve data centers with new natural gas generation.
Speaker Change: We are very gratified to have developed and retained this incredibly valuable business as it represents a tremendous opportunity to support sustainable growth well into the next decade.
In 2016 with Southern company acquired what is now Southern company gas, we sought to further vertically integrate along the energy value chain.
Speaker Change: An important additional element of that vertical integration, whereas our 50% investment in the southern natural gas pipeline, which overlays our three electric service territories as well as one of our largest natural gas franchises.
Speaker Change: As previously disclosed by our operating partner Kinder Morgan.
Speaker Change: This pipeline is poised for growth.
Speaker Change: Largely to support increased natural gas generation throughout the southeast.
Speaker Change: Southern natural gas as well as our other smaller farsi related pipeline investments.
Speaker Change: Provide a terrific complement to our core growth prospects.
Speaker Change: Even two of our smaller subsidiaries both of which have seen accelerated growth recently due to expanding computing power demand have been incredibly valuable for deeper appreciation and understanding of the current market power.
Speaker Change: Power secure which specializes in providing utility and energy solutions to commercial industrial and load serving customers has seen its business bolstered by the growth in data centers. This has led to a comp a.
Speaker Change: A more comprehensive understanding of data center needs and has enhanced our relationships with many national data center owners.
Speaker Change: Another example of the value in our smaller copper memory subsidiaries as southern Telecom.
Speaker Change: On its own and in partnership with our electric utilities, Southern telecom deploy fiber optic infrastructure that serves as an important.
Speaker Change: An attractive additional product offering enhancing the appeal to data intensive customers to locate and our south Eastern service territories.
Speaker Change: Overtime.
Speaker Change: We have exercised exceptional discipline and intentionality and refining our portfolio of businesses.
Speaker Change: We believe this has uniquely positioned southern company to deliver reliable and affordable energy to our customers as well as to deliver premier risk adjusted total shareholder returns to our investors Dan I'll now turn the call over to you.
Dan Tucker: Thanks, Chris I'm going to pause.
Speaker Change: Robert can you hear us operator.
Robert: Yes, I can very clearly.
Speaker Change: We're being told that none of the audience can hear the audio.
Speaker Change: Okay, I, just send a message to our supervisor.
Speaker Change: Yeah, everyone everything looks fine on my end.
Okay. Thank you, we'll continue I'm being I'm getting mixed reports now.
Speaker Change: No.
Speaker Change: We will continue and what we'll do I believe this is being recorded it will be available for webcast.
And hopefully the Q&A Joseph Thank you Robert.
Chris Womack: Okay, well thanks, Chris.
Speaker Change: So look as you can see from the materials, we released this morning.
We reported strong adjusted earnings per share of $4 five for 2024.
Speaker Change: Which as Chris mentioned earlier was the very top of our 2024 guidance range and represents 11% growth from adjusted earnings.
Speaker Change: From the prior year.
Speaker Change: The primary drivers for our performance compared to 2023, where continued investment in our state regulated utilities and weather related impacts are.
Speaker Change: A complete reconciliation of our quarterly and annual adjusted earnings is included in the materials. We released this morning.
Speaker Change: Turning now to electricity sales, excluding the impact of temporary sales losses due to hurricane Helene weather normalized total retail electricity sales for the year were up approximately 1% compared to 2023.
Speaker Change: Commercial sales were particularly strong led by power usage from new and existing data centers, which were up 17% year over year.
Speaker Change: 2024 was our strongest year on record in terms of new residential electric customers. We added 57000, new residential electric customers as well as 26000, new customers in our natural gas distribution businesses.
Speaker Change: These trends highlight the broad strength, we continue to observe across our service territories, particularly in the southeast.
Speaker Change: We expect this momentum to continue into 2025 with retail electricity sales on a consolidated basis projected to grow approximately 2% to 3% compared to 2020 for weather normal sales.
Speaker Change: Longer term, we project average annual sales growth of approximately 8% from 2025 through 2029, an increase of 2% from our prior long term sales growth expectations.
Speaker Change: Georgia Power's total retail electric sales growth is projected to be approximately 12% over the same period.
Speaker Change: Our commercial segment, which includes data centers and currently represents approximately one third of total retail electricity sales is projected to grow an average of 18% from 2025 to 2029.
Speaker Change: As we have highlighted several times in the past, we take a very measured and disciplined approach to forecasting incremental electric load.
Speaker Change: As Chris mentioned in his remarks, the extraordinary growth in our forecast represents a fraction of the total economic development pipeline.
Speaker Change: Informed by our experience and continuous engagement with prospective and existing customers. Our forecasts are significantly risk adjusted as it pertains to both timing and load size.
Speaker Change: Serving this load reliable reliably require significant capital investments in the coming years, our base capital investment forecast over the next five years is $63 billion, 95% of which is at our state regulated utilities.
Speaker Change: This represents a $14 billion or an approximately 30% increase from our forecast just one year ago.
Speaker Change: In addition to increases for previously announced new projects at southern power and expansion plans for our largest interstate natural gas pipeline incremental.
Speaker Change: Investment in our transmission system is the largest driver of increased capital expenditures in our forecast.
Speaker Change: Our capital investment plan supports projected long term state regulated average annual rate base growth of approximately 7%, a 1% increase from our forecast one year ago.
$63 billion 95 per cent of which is at our state regulated utilities.
This represents a $14 billion or an approximately 30% increase from our forecast just one year ago.
Speaker Change: Our forecast reflects an approach to capital forecast and consistent with that which we've used in the past and that we have not included potential capital investments, primarily new or expanded generation resources, which remains subject to regulatory processes.
In addition to increases for previously announced new projects at southern power and the expansion plans for our largest interstate natural gas pipeline incremental.
Incremental investment in our transmission system is the largest driver of increased capital expenditures in our forecast.
Speaker Change: For example, there are outstanding request for proposals or Rfps for new resources from previously approved Georgia, Power's integrated resource plans or IRR piece that represent approximately 13000 megawatts.
Our capital investment plan supports projected long term state regulated average annual rate base growth of approximately 7%, a 1% increase from our forecast one year ago.
Speaker Change: There are also potential incremental FERC regulated natural gas pipeline investments to meet the increasing energy needs of customers in the southeast.
Our forecast reflects an approach to capital forecasting consistent with that which we have used in the past and that we have not included potential capital investments, primarily new or expanded generation resources, which remains subject to regulatory processes.
Speaker Change: Combined we estimate that reasonable outcomes for these opportunities represent a potential range of incremental regulated capital investments totaling $10 billion to $15 billion for 2025 to 2029.
For example, there are outstanding request for proposals or Rfps for new resources from previously approved Georgia power integrated resource plans or I or PS that represent approximately 13000 megawatts.
Speaker Change: As a reminder, we are currently in active regulatory processes for the vast majority of these opportunities and given the timing of these ongoing regulatory processes. It's likely that we could have better line of sight on a substantial portion of these potential incremental investments later this year at which time, we could update our <unk>.
There are also potential incremental FERC regulated natural gas pipeline investments to meet the increasing energy needs of customers in the South east.
Combined we estimate that reasonable outcomes for these opportunities represent a potential range of incremental regulated capital investments totaling $10 billion to $15 billion for 2025 to 2029.
Speaker Change: <unk> capital investment plan.
Speaker Change: The financing plan, we provided supports our base capital plan and continues to fund the business and a credit supportive manner.
Speaker Change: Preserving our investment grade credit ratings continues to be a priority as we believe that to be a high quality equity investment a company must also be a high quality credit.
As a reminder, we are currently in active regulatory processes for the vast majority of these opportunities and given the timing of these ongoing regulatory processes. It's likely that we could have better line of sight on a substantial portion of these potential incremental investments later this year at which time, we could update our <unk>.
Speaker Change: Our base plan projects average annual equity needs of approximately $800 million a year to support our credit quality and our progress toward our credit metric targets of approximately 17% F. F O to that by the latter part of our forecast horizon. These.
Capital investment plan.
The financing plan, we've provided supports our base capital plan and continues to fund the business and a credit supportive manner.
Speaker Change: These equity needs should be easily manageable with them with our internal plans, which provide approximately $350 million to $400 million annually.
Preserving our investment grade credit ratings continues to be a priority as we believe that to be a high quality equity investment.
Speaker Change: Plus our at the market or ATM program.
Company must also be a high quality credit.
Speaker Change: To the extent incremental capital opportunities become part of our base capital investment plan, our credit quality objectives would remain the same accordingly, we would expect to fund incremental capital investments above our current plan with approximately 30% to 40% equity or equity equivalents.
Our base plan projects average annual equity needs of approximately $800 million a year to support our credit quality and our progress toward our credit metric targets of approximately 17% F F O to debt on them.
Later part of our forecast horizon. These.
Speaker Change: We expect to continue to be flexible and to use the same shareholder focused discipline. We've demonstrated historically when it comes to sourcing incremental equity or equity equivalents since our last earnings call. We've already addressed roughly $500 million of equity needs for 2025 by pricing Atms.
These equity needs should be easily manageable with them with our internal plans, which provide approximately $350 million to $400 million annually.
Plus our at the market or ATM program.
To the extent incremental capital opportunities become part of our base capital investment plan, our credit quality objectives would remain the same accordingly, we would expect to fund incremental capital investments above our current plan with approximately 30% to 40% equity or equity equivalents we.
Speaker Change: Sales under forward contracts and through the issuance of junior subordinated notes or J S ends, which receive 50% equity treatment by the credit rating agencies.
Speaker Change: For decades, our dividend has been an integral part of our value proposition for shareholders. Southern company has paid a dividend that is equal to or greater than the previous year 477 consecutive years with consecutive increases over each of the last 23 years.
Expect to continue to be flexible and to use the same shareholder focused discipline. We've demonstrated historically when it comes to sourcing incremental equity or equity equivalents.
Since our last earnings call, we've already addressed roughly $500 million of equity needs for 2025 by pricing ATM sales under forward contracts and through the issuance of junior subordinated notes or J S ends, which receive 50% equity treatment by the credit rating agencies.
Speaker Change: While future dividend increases are subject to approval by our board of Directors. We project. We project continued modest increases in the dividend over our forecast horizon.
This should serve to lower our dividend payout ratio into the low to mid 60% range as we balance our equity needs with this very important component of our value proposition.
For decades, our dividend has been an integral part of our value proposition for shareholders. Southern company has paid a dividend that is equal to or greater than the previous year 477 consecutive years with consecutive increases over each of the last 23 years.
Turning now to our earnings guidance for 2025 and beyond.
Speaker Change: Our adjusted earnings per share guidance range for 2025 is $4 20.
Speaker Change: Two $4 30 per share.
While future dividend increases are subject to approval by our board of directors.
Speaker Change: Our adjusted guidance midpoint of $4.25 represents 6% growth from our 2024 adjusted EPS guidance midpoint are.
We project continued modest increases in the dividend over our forecast horizon.
This should serve to lower our dividend payout ratio into the low to mid 60% range as we balance our equity needs with this very important component of our value proposition.
Speaker Change: Our projected long term adjusted EPS growth rate guidance is unchanged at 5% to 7% from our 2020 for guidance.
Speaker Change: Clearly we are seeing strong fundamentals that we expect to support our long term growth.
Turning now to our earnings guidance for 2025 and beyond.
Our adjusted earnings per share guidance range for 2025 is $4 22.
Speaker Change: These growth drivers become increasingly significant in the latter years of our forecast horizon.
$4 30 per share.
Speaker Change: At the same time interest rates, which are now expected to be higher for even longer continue to be a partially offsetting factor as our parent company debt gets refinanced at meaningfully higher rates than the securities outstanding today.
Our adjusted guidance midpoint of $4 25 represents 6% growth from our 'twenty 'twenty four adjusted EPS guidance midpoint.
Projected long term adjusted EPS growth rates rate guidance is unchanged at 5% to 7% from our 2024 guidance.
Speaker Change: That said, we are increasingly encouraged about the strength of our long term earnings outlook.
Speaker Change: All else being equal and assuming the current positive momentum continues including the potential for a significant portion of the incremental capital opportunities we've highlighted materializing.
Clearly we are seeing strong fundamentals that we expect to support our long term growth.
These growth drivers become increasingly significant in the latter years of our forecast horizon.
At the same time interest rates, which are now expected to be higher for even longer continue to be a partially offsetting factor is our parent company debt gets refinanced at meaningfully higher rates than the securities outstanding today.
Speaker Change: We believe our long term adjusted EPS should be near the top of our projected long term range.
Speaker Change: And assuming this potentially improved trajectory appears sustainable we also could be positioned to rebase, our 5% to 7% projected growth trajectory at a higher starting point as early as 2027, Chris.
That said, we are increasingly encouraged about the strength of our long term earnings outlook.
All else being equal and assuming the current positive momentum continues including the potential for a significant portion of the incremental capital opportunities we've highlighted materializing.
Chris Womack: Chris I'll now turn the call back over to you. Thank you Dan.
Chris Womack: We are very excited about the future here at Southern company.
Speaker Change: When it comes to the incredible load growth, we see our objective is to serve as much of this growing electric electric load as we can sustainably serve.
We believe our long term adjusted EPS should be near the top of our projected long term range and assuming this potentially improved trajectory appears sustainable we also could be positioned to rebase, our 5% to 7% projected growth trajectory at a higher starting point is early.
Speaker Change: The vertically integrated state regulated service territories that we are privileged to serve are proving well suited to attracting these large load customers.
Speaker Change: And thanks to integrated resource plans and the other orderly processes inherent in our regulated frameworks.
<unk> is 2027.
Speaker Change: Our market is also perhaps proven to be better suited than the unregulated markets at effectively deploying new resources to serve them.
Chris I'll now turn the call back over to you. Thank you Dan.
We are very excited about the future here at Southern company.
When it comes to the incredible load growth, we see our objective is to serve as much of this growing electric electric load as we can sustainably serve.
Speaker Change: Our disciplined approach to forecasting these needs will continue to include a measured risk adjusted methodology as well as pricing and contract terms for new large load customers that continue to benefit and predict protect our existing customers and investors.
The vertically integrated state regulated service territories that we are privileged to serve.
Proving well suited to attracting these large load customers.
Speaker Change: As we continue to grow strong credit quality remains paramount.
And thanks to integrated resource plans and the other orderly processes inherent in our regulated frameworks.
Speaker Change: This important buffer against adversity distinguishes southern company for much of the industry and serves to insulate investors from sudden market impacts as the world around us changes.
Our market is also perhaps proven to be better suited than the unregulated markets and effectively deploying new resources to serve them.
Our disciplined approach to forecasting these needs will continue to include a measured risk adjusted methodology as well as pricing and contract terms for new large load customers that continue to benefit and predict protect high.
Speaker Change: Additionally, one of my top priorities is our team here at Southern company. We believe we have one of the most talented and deepest benches in the industry.
Speaker Change: Continuing to prioritize and invest in the development of our future leaders is crucial to maintaining our competitive edge and ensuring our continued long term success.
Existing customers and investors.
As we continue to grow strong credit quality remains paramount.
This important buffer against adversity distinguishes southern company for much of the industry and serves to insulate investors from sudden market impacts as the world around us changes.
Speaker Change: And finally.
Speaker Change: We aspire to deliver premier risk adjusted total returns to investors.
Speaker Change: The aim is to be a high quality must own stock in a company built to endure.
Additionally, one of my top priorities is our team here at Southern company.
And we believe delivering exceptional value to our shareholders is best achieved by putting our customers first.
We believe we have one of the most talented and deepest benches in the industry.
Speaker Change: <unk>, providing reliable and affordable energy.
Continuing to prioritize and invest in the development of our future leaders is crucial to maintaining our competitive edge and ensuring our continued long term success.
Speaker Change: We had a phenomenal year in 2024.
Speaker Change: I am extremely proud of all we have accomplished as one team across our company.
Speaker Change: Southern company is poised for a bright future and I could not be more excited for the opportunities ahead of us.
And finally.
We aspire to deliver premier risk adjusted total returns to investors. Our aim is to be a high quality must own stock in a company built to endure.
Speaker Change: Thank you for joining us this afternoon and thank you for your continued interest in southern company.
Speaker Change: Operator, we're now ready to take questions and before we do let me just say thanks for everyone's patience as the webcast apparently was only not working temporarily dial and was working fine we will have the entirety of the recording posted for replay after the call.
Speaker Change: And we believe delivering exceptional value to our shareholders is best achieved by putting our customers first including.
Providing reliable and affordable energy.
Speaker Change: We had a phenomenal year in 2024.
Speaker Change: And I am extremely proud of all we have accomplished as one team across our company.
Speaker Change: At this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad a.
Speaker Change: Southern company is poised for a bright future and I could not be more excited for the opportunities ahead of us.
Speaker Change: A confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for.
Greg McLeod: Thank you for joining us this afternoon and thank you for your continued interest in Southern company. Operator, we're now ready to take questions and before we do let me just say thanks for everyone's patience.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Greg McLeod: The webcast apparently was only not working temporarily dialing it was working fine we will have the entirety of the recording posted for replay after the call.
Speaker Change: Our first question comes from Carly Davenport with Goldman Sachs. Please proceed with your question.
Greg McLeod: At this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
Hey, good afternoon, thanks for taking the questions and for all the updates today.
A confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for.
Speaker Change: Maybe just to start on the earnings growth cadence could you just flush out your comments a bit more there just in terms of where you could trend in that five to seven range as we move through the five years of the current plan just as you think about the increase rate base growth and the upside capital investment opportunities and maybe just anything that you see at this point that could potentially derail that.
Chris Womack: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Speaker Change: <unk> trend.
Speaker Change: Sure Carl and thanks for the question and thanks for joining us the.
Speaker Change: Our first question comes from Carly Davenport with Goldman Sachs. Please proceed with your question.
Speaker Change: Look I think the first thing to say is what we've continue to reinforce over time as we are aware we were right. So we have this terrific outlook five to seven long term.
Chris Womack: Hey, good afternoon, thanks for taking the questions and for all the updates today and maybe just to start on the earnings growth cadence could you just flush out your comments a bit more there just in terms of where you could trend in that five to seven range as we move through the five years of the current plan just as you think about the increase rate base growth and the upside capital on that.
Speaker Change: And now we are seeing some incremental fundamental things being additive to the overall profile and look the words were using or adding durability. That's not code for anything that's simply suggesting that.
Chris Womack: And the opportunities and maybe just anything that you see at this point that could potentially derail that trend.
Speaker Change: This is not a fight every year to just get to where we need to be there are enough fundamentals coming into play that this is a long term outlook that we are beginning to get even more confidence in being able to sustain for a long period of time.
Chris Womack: Sure Carl and thanks for the question and thanks for joining us.
Chris Womack: Look I think the first thing to say is what we've continued to reinforce over time as we are aware we were right. So we have this terrific outlook five to seven long term.
Speaker Change: And so the with this incremental update that we just had today and the potential incremental capital that we could get more clarity on in the very foreseeable future.
Chris Womack: And now we are seeing some incremental fundamental things being additive to the overall profile and look the words were using or adding durability. That's not code for anything that's simply suggesting that.
Speaker Change: We're solidly.
Speaker Change: Within our range and potentially with those incremental updates.
Chris Womack: This is not a fight every year to just get to where we need to be there are enough fundamentals coming into play that this is a long term outlook that we're beginning to get even more confidence in being able to sustain for a long period of time.
Speaker Change: Sustainably near the top.
Speaker Change: And I think how we feel positioned.
Speaker Change: Then in the long term as early as 2027 is to be able to not change the five to seven per se or perhaps start that growth rate from a higher sustained point in the near term we are where we were.
Chris Womack: And so the with this incremental update that we just had today and the potential incremental capital that we could get more clarity on in the very foreseeable future.
Great. That's super helpful. Appreciate that and then maybe just on that 10 to 15 billion of investment opportunities above the plan could you talk a little bit about how we should think about the split between sort of what is that Georgia power versus he referenced that natural gas pipeline opportunity and any color in terms of a third of the outcome.
Chris Womack: We're solidly.
Chris Womack: Within our range and potentially with those incremental updates.
Chris Womack: Sustainably near the top.
Chris Womack: And I think how we feel positioned.
Chris Womack: In the long term as early as 2027 is to be able to not change the five to seven per se or perhaps start that growth rate from a higher sustained point in the near term we are where we were.
Speaker Change: That that underpin that estimated capex.
Speaker Change: Yes, absolutely it is substantially all Georgia power. There is some degree of the natural gas pipelines I think in our 10-K, we disclosed the number of.
Speaker Change: Up to $14 billion associated with it that Georgia power item as I mentioned in my prepared remarks for for those that could hear them. He.
Speaker Change: Great. That's super helpful. Appreciate that and then maybe just on that 10 to 15 billion of investment opportunities above the plan could you talk a little bit about how we should think about the split between sort of Whatsapp, Georgia power versus he referenced that natural gas pipeline opportunity and any color in terms of sort of the outcome.
Regulatory processes are ongoing for those and so we're going to maintain the same discipline. We have in the past, we're not going to get ahead of digging.
Speaker Change: Digging into details and speaking to that so around July will start to get some clarity what I will say is look the the dollars are substantial if you look at the Rfps that are on slide 16, and the nature of those I'll just give you a historical context.
Chris Womack: That that underpinned that estimated capex.
Chris Womack: Yes, absolutely it is substantially all Georgia power. There is some degree of the natural gas pipelines I think in our 10-K, we disclosed the number of up to $14 billion associated with that that Georgia power item as I mentioned in my prepared remarks for for those that can hear them.
Speaker Change: All source as an example, that's a big megawatt amount and historically all source rfps have tended to be larger dispatch able resources.
Chris Womack: Regulatory processes are ongoing for those and so we're going to maintain the same discipline. We have in the past we're not going to get ahead of you know digging.
Speaker Change: And the market environment, we've been in historically, those often turned into purchase power agreements.
Chris Womack: Digging into details and speaking to that so around July will start to get some clarity what I will say is look the dollars are substantial if you look at the Rfps that are on slide 16, and the nature of those I'll just give you a historical context I mean the.
Speaker Change: In the current market.
Speaker Change: All of that excess capacity previously kind of bid and as purchases say all a substantial amount is being soaked up by all of the load serving entities in the region. So the availability of excess capacity is much tighter the likelihood of having to build new is much greater.
Chris Womack: All sourced as an example, that's a big megawatt amount and historically all source rfps have tended to be larger dispatch a bowl resources.
Speaker Change: Stop there Carla and see if that addresses your question.
Speaker Change: That does thank you so much for the color.
Chris Womack: And the market environment, we've been in historically, those often turned into purchase power agreements.
Speaker Change: Youre welcome Thanks Carla.
Speaker Change: Our next question comes from Julien Dumoulin Smith with Jefferies. Please proceed with your question.
Chris Womack: In the current market.
Chris Womack: All of that excess capacity previously kind of bid in as purchases I say all a substantial amount is being soaked up by all of the load serving entities in the region. So the availability of excess capacity is much tighter the likelihood of having to build new is much greater.
Speaker Change: Hey, good Hey, good afternoon team very nicely done I feel the confidence exiting from you guys.
Speaker Change: With that said just maybe to.
Speaker Change: Add to the commentary on the regulated side of the business you you provided a number of comments about southern power.
Chris Womack: Stop there Carla and see if that addresses your question.
Speaker Change: Is there any kind of metric you can disclose around the cumulative earnings trajectory that you guys are seeing there today or the potential of Repowering on accumulative basis through the early part of the decade. Obviously, you have a number of different assets at which prices are not disclosed that come up so clearly there's opportunities.
Carla: That does thank you so much for the color.
Carla: Youre welcome Thanks Carla.
Speaker Change: Our next question comes from Julien Dumoulin Smith with Jefferies. Please proceed with your question.
Speaker Change: Hey, Hey, good afternoon team very nicely done I feel the confidence exiting from you guys.
Speaker Change: Difficult to discern externally and how does that add incrementally ultimately to that commentary on 5% to seven if you can elaborate if you don't mind.
Speaker Change: With that said just maybe to.
Speaker Change: Yeah happy to answer that Julian and what I would say again I'll keep coming back to the work because I think it just fits the opportunities at southern power.
Speaker Change: Add to the commentary on the regulated side of the business you you provided a number of comments about southern power.
Speaker Change: Is there any kind of metric you can disclose around the cumulative earnings trajectory that you guys are seeing there today or the potential of Repowering on accumulative basis through the early part of the decade. Obviously, you have a number of different assets at which prices are not disclosed that come up so clearly there's opportunities.
Speaker Change: Really play into this concept of your durability and the sustainability. If you will of that trajectory over the long term substantially all of southern Power's current assets are under long term contracts and Thats true through the end of this decade.
Speaker Change: Difficult to discern externally and how does that add incrementally ultimately to that commentary on five to seven if you can elaborate if you don't mind.
Speaker Change: And so the opportunities that exist for re contracting.
Speaker Change: All kind of lend themselves to benefits.
Speaker Change: Yeah happy to answer that Julian and and what I would say again I'll keep coming back to the work because I think it just fits the opportunities at southern power.
Speaker Change: Into the next decade.
Speaker Change: Kind of adding to that durability concept.
Speaker Change: When it comes to options to build new brownfield gas plants or to build new generation outside of the southeast.
Speaker Change: Really play into this concept of your durability and the sustainability. If you will of that trajectory over the long term substantially all of southern Power's current assets are under long term contracts and that's true through the end of this decade.
Speaker Change: Those two lend themselves to a similar timeframe.
Speaker Change: Not because of a lack of opportunity, but because of what you're seeing broadly in the industry in terms of the timeline to deploy such resources.
Speaker Change: And so the opportunities that exist for re contracting all kind of lend themselves to benefits.
Speaker Change: Getting new equipment, and then obviously the construction process so that two becomes a.
And of the plan into the next decade opportunity.
Speaker Change: Into the next decade, and you know kind of adding to that durability concept. When it comes to options to build new brownfield gas plants or to build new generation outside of the south east.
Speaker Change: In the interim there.
Speaker Change: Actively in the process of Repowering are our first Repowering project that our one of our wind facilities we have.
Speaker Change: Got new solar facilities under construction I think youll see us continue to.
Speaker Change: Those two lend themselves to a similar timeframe not because of a lack of opportunity, but because of what you're seeing broadly in the industry in terms of the timeline to deploy such resources.
Speaker Change: Kind of.
Speaker Change: Use the opportunistic if you will where those opportunities make sense. They may be very limited, but if we see them and we like them, we'll certainly pursue them all of that to say Julien southern power will kind of.
Speaker Change: Getting new equipment, and then obviously the construction process. So that two becomes a kind of end of the plan into the next decade.
Speaker Change: Remain.
Speaker Change: Characterize it as just a steady contributor to the status quo.
Speaker Change: Opportunity.
Speaker Change: In the interim there you know we're actively in the <unk>.
Speaker Change: The opportunity exist at the end of the period and into the Mexican.
Speaker Change: Assess a repowering of the our first Repowering project that our one of our wind facilities, we've got new solar facilities under construction I think you'll see us continue to.
Speaker Change: And doing one thing I would add I mean, I think even us having this conversation.
Speaker Change: Seeks to show you kind of the.
Speaker Change: How these complementary businesses afford us greater durability with the opportunities we see in the marketplace today.
Speaker Change: Kind of us be opportunistic if you will where those opportunities make sense. They may be very limited, but if if we see them and we like them, we'll certainly pursue them all of that to say Julien Southern power will kind of.
Speaker Change: And the excitement that we have around them, we've not had a lot of discussion about them in the past, but as we see what is transpiring in the marketplace today and the opportunities that are in front of us with these complementary businesses. We thought it was important to share what.
Speaker Change: Remain I would characterize it as just a steady contributor to the status quo.
Speaker Change: We see and what we understand but how this supports kind of our path our earnings growth in terms of where we had it but also how it supports our durability.
Speaker Change: The opportunity exist at the end of the period and into the next decade.
Speaker Change: One thing I would add I mean, I think even us having this conversation.
Speaker Change: Yes, and if I can complement that question further I mean, you talk about retail sales accelerating obviously within your regulated content. How do you think about leveraging the sites themselves for co location opportunities or supplementing not just with repowering, but additional outright.
Speaker Change: To show you kind of the.
Speaker Change: How these complementary businesses afford us greater durability with the opportunities we see in the marketplace today.
Speaker Change: And the excitement that we have around them, we not had a lot of discussion about them in the past, but as we see what is transpiring in the marketplace today and the opportunities that are in front of us with these complementary businesses. We thought it was important to share what.
Speaker Change: Potential gas turbines here to serve these debt datacenter opportunities I mean again, if you think about southern power not just re contracting but truly additional.
Speaker Change: What we see and what we understand but how this supports kind of our path of earnings growth in terms of where we had it but also how it supports our durability.
Speaker Change: Within or in adjacent service territories, how does that fit into the plan as well just to be clear.
Speaker Change: Yeah, Hey, Julien said like if youre looking at slide eight in our deck for southern power.
Speaker Change: Yeah, and if I can complement that question further I mean, you talk about retail sales accelerating obviously within your regulated contracts. How do you think about leveraging the sites themselves for co location opportunities or supplementing not just with repowering, but additional outright.
Speaker Change: Kind of getting to the heart of what you are asking in terms of leveraging what's happening in the southeast.
Speaker Change: The things that look through there up rates on the current natural gas fleet opportunity brownfield gas plants in the southeast again those are.
Speaker Change: When we talk about the pipeline you see it on one of our other slides that pipeline of 50 gigawatts through the mid 2030. So this is clearly a very long term opportunity southern power absolutely has the opportunity to play into that you mentioned kind of co location et cetera, that's not part of our market design and where.
Speaker Change: Potential gas turbines here to serve these dead datacenter opportunities I mean again, if you think about southern power not just re contracting but truly additional.
Speaker Change: Within or in adjacent service territories, how does that fit into the plant as well just to be clear.
Speaker Change: Yeah, Hey, Julien so like if you're looking at slide eight in our deck for southern power.
Speaker Change: We're perfectly fine with that we appreciate and are benefited by this wonderful vertically integrated market that we operate in but in terms of them being able to southern power being able to serve load serving entities that are then in turn serving datacenters tremendous opportunity.
Speaker Change: Kind of getting to the heart of what you're asking in terms of leveraging what's happening in the south east.
Speaker Change: The things to look to their up rates on the current natural gas fleet opportunity brownfield gas plants in the southeast again those are.
Speaker Change: When we talk about the pipeline you see it on one of our other sides that pipeline of 50 Gigawatts to the mid 2030. So this is clearly a very long term opportunity southern power absolutely has the opportunity to play into that you mentioned kind of co location et cetera, that's not part of our market design and where.
Speaker Change: Excellent all those.
Speaker Change: Guys congratulations.
Speaker Change: Thanks Julien.
Speaker Change: Austin.
Speaker Change: Our next question comes from Steve Fleishman with Wolfe Research. Please proceed with your question.
Speaker Change: Hey, Steve.
Perfectly fine with that we appreciate and are benefited by this wonderful vertically integrated market that we operate in but in terms of them being able to southern power being able to serve load serving entities that have been in turn serving datacenters tremendous opportunity.
Steve Fleishman: Hey, good afternoon.
Speaker Change: Sure.
Speaker Change: I'm doing great, Thanks, Chris and Dan So.
Speaker Change: Appreciate the additional color on the capital plan and.
Speaker Change: Central kind of growth opportunity.
Speaker Change: Just wanted clarity on one piece of that so.
Speaker Change: Dan you mentioned the ability to to reach the high end and also mentioned this possibility of re basing.
Speaker Change: Excellent so all the best guys congratulations.
Speaker Change: Thank you Leo and good question.
Speaker Change: And I guess first of all why is 27 kind of a key year for that.
Speaker Change: Our next question comes from Steve Fleishman with Wolfe Research. Please proceed with your question.
Speaker Change: That might drive it and is there any way to go.
Speaker Change: Hey, Steve.
Speaker Change: Any sense of the size of re basing that that might be there.
Steve Fleishman: Hey, good afternoon.
Steve Fleishman: I'm doing great. Thanks, Christen Dan so.
Speaker Change: Yes.
Steve Fleishman: Yes, thanks for the question Steve So.
Steve Fleishman: Appreciate the additional color on the capital plan and potential kind of growth opportunity.
Steve Fleishman: This won't surprise you, we're not going to get ahead of ourselves and so in terms of assess.
Steve Fleishman: Just wanted clarity on one piece of that so.
Steve Fleishman: Assessing the magnitude of any re basing let's just wait until we rebase if that happens to measure it.
Steve Fleishman: Dan you mentioned the <unk>.
Steve Fleishman: To to reach the high end and also mentioned this possibility of re basing.
In terms of why 2027, it's it's a lot of different moving parts. It's.
Steve Fleishman: And I guess first of all why is 27 kind of a key year for that.
Steve Fleishman: To a large degree exactly what we keep describing this this tremendous growth that is happening is long term in nature the ramp up in the capital spending in the the revenues from these large load customers are more backend loaded in the plan, but it also.
Steve Fleishman: But that might drive it and is there any way to give us any sense of the size of rebating that that might be there.
Steve Fleishman: Yeah.
Steve Fleishman: Yeah. Thanks for the question Steve So.
Steve Fleishman:
Steve Fleishman: This won't surprise you, we're not going to get ahead of ourselves and so in terms of <unk>.
Steve Fleishman: Mentioned this very briefly in the prepared remarks is a function of what's happening right in front of us with interest cost. So that is probably the biggest ballast and the.
Steve Fleishman: Assessing the magnitude of any Rebase thing, let's just wait until we rebase if that happens to measure it.
Steve Fleishman: In terms of why 2027, it's it's a lot of different moving parts. It's.
Steve Fleishman: Early years and kind of weighting it down to a degree as we refinance some current some of our existing securities that are.
Steve Fleishman: To a large degree exactly what we keep describing this this tremendous growth that is happening is long term in nature the ramp up in the capital spending in the the revenues from these large load customers are more backend loaded in the plan or not but it also.
Steve Fleishman: Today, an ultra low rates, but are happy to be refinanced in this current market.
Steve Fleishman: And then once we get past that and this these opportunities really become.
Steve Fleishman: More tangible than just a forecast and we feel really good about them thats kind of the.
Steve Fleishman: Mentioned this very briefly in the prepared remarks is a function of what's happening right in front of us with interest cost. So that is probably the biggest ballast and the.
Steve Fleishman: Yes.
Steve Fleishman: Said, a different way that's really what's behind the 2027.
Steve Fleishman: Got it okay. So basically some of the headwind maybe moderates then.
Steve Fleishman: Early years and kind of weighting it down to a degree as we refinance some current you know some of our existing securities that are.
Steve Fleishman: But they are in the earlier years and that's got it.
Steve Fleishman: The only so much that needs to be refinanced.
Steve Fleishman: Today at ultra low rates that are have to be refinanced in this current market.
Speaker Change: Yes, that's good.
Steve Fleishman: Okay and then.
Steve Fleishman: And then once we get past that and this these opportunities really become.
Steve Fleishman: I guess.
Speaker Change: Just in terms of I think you recently got approval for.
Steve Fleishman: No more tangible than than just a forecast and we feel really good about them that's.
Speaker Change: Change in the way that you can contract with data centers in Georgia. So I guess I'd be curious kind of like what have you been doing state before that.
Steve Fleishman: The.
Steve Fleishman: You.
Steve Fleishman: Said, a different way that's really what's behind the 2027.
Steve Fleishman: Got it okay. So basically some of the headwind maybe moderates then.
Speaker Change: What are you now able to do differently going forward with that.
Speaker Change: And Steve I would say, we're there yet yes, Steve we were doing a lot of that already.
Steve Fleishman: But they are in the earlier years when this got US there there's only there's only so much that needs to be refinanced.
Speaker Change: I think the codification and the signaling too to the data center customers with something that I think has been very appreciative to them in into the marketplace.
Steve Fleishman: Yes, that's good okay.
Steve Fleishman: Okay and then.
Steve Fleishman: I guess.
Steve Fleishman: Just in terms of I think you recently got approval for.
Speaker Change: As you know.
The Georgia, Georgia Public Service Commission approved these rules and regs in January to just make sure all the risks and costs associated with these large load customers 100, plus megawatts to make sure that there was balanced and fair approach to all customers.
Steve Fleishman: Change in the way that you can contract with data centers in Georgia. So I guess I'd be curious kind of like what have you been doing state before that.
Steve Fleishman: What are you now able to do differently going forward with that.
Speaker Change: Providing tools like credit requirements.
Steve Fleishman: And Steve I'm, saying over there yeah, yes, Steve we were doing a lot of that already.
Speaker Change: Longer term contracts from five to 15 years minimum billing.
Steve Fleishman: I think the codification and the signaling too to the data center customers with something that I think has been very appreciative to them in into the marketplace.
Speaker Change: Site Pacific costs already being payback customer. These things are already being done, but I think that kind of certainty and codification of these processes.
Speaker Change: Brings more certainty and clarity to the marketplace. So not I mean, some of it is new and different but some of it is not we were already deploy.
Steve Fleishman: As you know.
Steve Fleishman: The Georgia, Georgia Public Service Commission approved these rules and regs in January to just make sure all of the risks and costs associated with these large load customers 100, plus megawatts to make sure that there was balance and a fair approach to all customers.
Speaker Change: Deploying a lot of these practices before.
Speaker Change: I'll tell you one of the ones that are kind of Incrementals, Steve that we think is just going to bring tremendous benefits to us in kind of executing on serving this growth.
Steve Fleishman: Providing tools like credit requirements.
Steve Fleishman: Long term contracts from five to 15 years minimum billing.
Speaker Change: Are some of the creditor collateral requirements that are going to be required of customers in our pipeline.
Steve Fleishman: <unk> Pacific costs already being paid by a customer these things are already being done.
Speaker Change: Those provisions are frankly going to help us weed out the more spec speculative projects.
Steve Fleishman: That kind of certainty and codification of these processes.
Steve Fleishman: Brings more certainty and clarity to the marketplace. So not I mean, some of it's new and different but some of it's not we're already deploying.
Speaker Change: And so as a result of that optically for those that are watching you may see the size of the pipeline shrink a little bit over the next three to six months, that's not because the customers that are ultimately going to end up locating in our state I've gone away, it's because the more speculative ones are unwilling to kind of put up there.
Speaker Change: Deploying a lot of these practices before yes.
Steve Fleishman: I'll tell you one one of the ones that are kind of Incrementals. Steve that we think is just going to bring tremendous benefits to us and kind of executing on serving this growth.
Speaker Change: Collateral necessary.
Steve Fleishman: Are some of the credit or collateral requirements that are going to be required of customers in our pipeline.
Speaker Change: In order to stay in the queue.
Speaker Change: The feedback we've heard for many of the large customers the customer names you'd be familiar with it we want to build all this infrastructure are excited about these changes because it helps them ensure that the company is focused on serving the needs that are for lack of a better term more real than not.
Steve Fleishman: Those provisions are frankly going to help us weed out the more spec speculative projects and so as a result of that optically for those that are watching you may see the size of the pipeline shrink a little bit over the next three to six months, that's not because the customers that are ultimately going to end.
Speaker Change: Great. Thank you.
Dave: You bet Thanks, Dave.
Steve Fleishman: Up locating in our state I've gone away, it's because the more speculative ones are unwilling to kind of put up the collateral necessary.
Speaker Change: Our next question comes from Anthony <unk> with Mizuho. Please proceed with your question.
Anthony: Hey, good morning, Good afternoon, Chris sub Dan you guys great update.
Steve Fleishman: In order to stay in the queue the.
Steve Fleishman: The feedback we've heard from many of the large customers the customer names you'd be familiar with it we want to build all this infrastructure are excited about these changes because it helps them ensure that the company is focused on serving the needs that are for lack of a better term more real than not.
Speaker Change: <unk> clearly responding just.
Speaker Change: A quick.
Speaker Change: I guess housekeeping.
Speaker Change: 5% to 7% growth rate from 24 is that off of the 24 actual or off the midpoint of the 24 range.
Speaker Change: It's off of our 2024 guidance, so yes, not a fax or just trying to trying to reflect the.
Speaker Change: Normal course of business not any kind of one time things that might be in the number.
Steve Fleishman: Great. Thank you.
Steve Fleishman: You bet Thanks, Dave.
Speaker Change: Great perfect.
Speaker Change: Our next question comes from Anthony Crowed out with Mizuho. Please proceed with your question.
Speaker Change: Slide 17, I think maybe following up on <unk> question earlier, the 10% to $15 billion.
Speaker Change: Hey, good morning, good afternoon, Crisp sub Dan you guys, Great update stock claims responding just a quick I.
Speaker Change: Capital investments the company typically gives us this refresh on this fourth quarter call.
Speaker Change: Just how will the announcements go or how can we track.
Speaker Change: I guess housekeeping, the 5% to 7% growth rate from 24 is that off of the 24 actual or offset mid point of the 24 range.
Speaker Change: Chipping away at this wood here or is it on Youll give quarterly updates so should wait until fourth quarter.
Speaker Change: I think with the clarity we will have its certainly.
Speaker Change: It's off of our 2024 guidance, so yeah, not opex or just trying to kind of reflect the.
Speaker Change: It's certainly possible that by the time of our second quarter call.
Speaker Change: Kind of normal course of business not any kind of one time things that might be in the numbers.
Speaker Change: We could provide a little more visibility on this I think the fourth quarter remained kind of hour.
Speaker Change: Great perfect.
Speaker Change: On slide 17, I think maybe following up on <unk> question earlier, the 10% to $15 billion capital investments the company Kimberly It gives us this refresh on this fourth quarter call.
Speaker Change: Official time to update everything but with the.
Speaker Change: The magnitude and pace of this.
Speaker Change: Perhaps there'll be an update in July.
Speaker Change: Just how are the announcements go or how can we track.
Speaker Change: Great and just last one I think it's on Steve's question.
Speaker Change: Chipping away at this wood here or is it on Youll give quarterly updates shovel should wait until fourth quarter.
Speaker Change: Talking about the parent debt and some of the financing on slide 26, thanks for the clarity on the $9 billion of parent debt over the next three years that mature.
Speaker Change: I think with the clarity will have its theirs, it's certainly possible that by the time of our second quarter call.
Speaker Change: Do you have an average coupon.
Speaker Change: And if not I can follow up offline I wasn't looking at.
Speaker Change: We could provide a little more visibility on this I think the fourth quarter remain kind of hour.
Speaker Change: Yes follow up with IR to kind of get the.
Speaker Change: Something more specific I'm sure that's all available in the K, but the.
Speaker Change: No official time to update everything but with the.
Speaker Change: The magnitude and pace of this.
Speaker Change: Just in terms of magnitude it's.
Perhaps there'll be an update in July.
Speaker Change: Largely these are having to be refinanced at rates that are in some cases, a 150 to 200 basis points higher.
Speaker Change: Great and just last one I think it's on Steve's question.
<unk> talked about the parent debt and some of the financing on slide 26, thanks for the clarity, but on the 9 billion of parent debt over the next three years that mature.
Speaker Change: Great. Thanks, so much for the clarity and again great update.
Speaker Change: Thanks Anthony.
Speaker Change: Our next question comes from David Arcaro with Morgan Stanley. Please proceed with your question.
Do you have an average coupon.
Speaker Change: And if not I can follow up offline I wasn't looking at yes.
David Arcaro: Hey, David.
David Arcaro: Hey, How're you doing thanks, so much.
Speaker Change: If you follow up with IR to kind of get the yeah, you know something more specific I'm sure. That's all available in the K, but the just in terms of magnitude it's.
Speaker Change: I was wondering if you could touch on what Youre seeing in terms of the availability of gas turbines and what the pricing drop backdrop is looking like I'm thinking with the <unk> got all sorts of Rfps coming up that may may lean toward dispatch more gas generation over time, it seems like there could be.
Speaker Change: Largely these are having to be refinanced at rates that are in some cases 150 to 200 basis points higher.
Speaker Change: Great. Thanks, so much for the clarity and again great uptake.
Speaker Change: You know more coming in your plans in the future and then also thinking about southern power. So I guess, what's your access to turbines. These days.
Speaker Change: Thanks Anthony.
Speaker Change: Okay.
Speaker Change: Our next question comes from David Arcaro with Morgan Stanley. Please proceed with your question.
Speaker Change: We feel pretty good I mean, we have diversified our suppliers and we are engaged with a number of different suppliers.
Speaker Change: Hey, David.
David Arcaro: Hey, How're you doing thanks, so much.
Speaker Change: I was wondering if you could touch on what you're seeing in terms of the availability of gas turbines.
Speaker Change: Clearly, we are having to pay reservation fees to get in line.
Speaker Change: And what the pricing drop backdrop is looking like I'm thinking are you know with the you've got all sorts of Rfps coming up that you know may may lean toward dispatch more gas generation over time, it seems like there could be that you know.
Speaker Change: But I'll tell you right now we feel pretty good about where we are because of our history with these Oems and having this diverse supplier experience that we've been engaged with over number of years.
Speaker Change: So yes, it's challenging I mean, there's a heavy demand on the supply part, but right now we're having ongoing conversations with them letting them know what our needs are.
Speaker Change: More coming in your plans in the future and then also thinking about southern power. So I guess, what's your access determined these days.
Speaker Change: We feel pretty good I mean, we have diversified our suppliers and we are engaged with a number of different suppliers.
Speaker Change: And like I say, we're making the reservations.
To make sure we're in line to respond to the needs that we have and we're doing the exact same thing Dave with EPC providers.
Speaker Change: Clearly, we are having to pay reservation fees to get in line.
Speaker Change: Okay excellent thanks for that color.
Speaker Change: But I'll tell you right now we feel pretty good about where we are because of our history with these Oems and having this diverse supplier experience that that we've been engaged with over a number of years.
Dan Tucker: And let me see Dan I was curious just looking at a photo in the path here.
Speaker Change: 5%.
Speaker Change: When you exclude that the storm impact could you talk about the trajectory when you would be aiming for that 17%.
Speaker Change: Yes, it's challenging I mean, there's a heavy demand on the supply part, but right now we're having ongoing conversations with them letting them know what our needs are.
Speaker Change: <unk> to debt level and kind of describe the path to get there from here.
Speaker Change: Yes, absolutely, Dave look I would characterize it particularly with our base forecast.
Speaker Change: I'd say, we're making the reservations.
Speaker Change: To make sure we're in line to respond to the needs that we have and we're doing the exact same thing Dave with APC providers.
Of the <unk>.
Speaker Change: Middle to late part of our five year Horizon is certainly reasonable and achievable and again I mentioned, if we have this increased capital need the objective doesn't change, but we're going to take a measured approach as to how we get there I think back half of the plan is still perfectly reasonable I will say what <unk>.
Speaker Change: Okay excellent thanks for that color.
Speaker Change: And let me see Dan I was curious just looking at a photo that in the past here 15, 5%.
Speaker Change: When you exclude that the storm impact could you talk about the trajectory when you'd be aiming for that 17%.
Speaker Change: You'll see in 2025 is a little bit of.
Speaker Change: Episode at that level and kind of describe the path to get there from here.
Speaker Change: Flat ish kind of trend in the <unk> to debt and it's and again from that adjusted number that you mentioned, Dave Thats, the right place to start and that's really true.
Speaker Change: Yeah, absolutely, Dave look I I'd characterize it, particularly with our base forecast are kind of the <unk>.
Speaker Change: Middle to late part of our five year Horizon is certainly reasonable and achievable and again I mentioned, if we have this increased capital need the objective doesn't change, but we're going to take a measured approach as to how we get there I think back half of the plan is still perfectly reasonable I will say what.
Speaker Change: <unk> to the the same thing it's the fact that there'll be some lag in the storm costs getting addressed and it's unlikely they'll begin to get recovered.
Speaker Change: 2025.
Speaker Change: Okay, great understood. Thanks, so much.
Speaker Change: You'll see in 2025 is a little bit of a flattish kind of trend in the <unk> to debt and it's and again from that adjusted number that you mentioned that that's the right place to start and that's really attributable to the the same thing it is.
Speaker Change: Thank you Dave.
Speaker Change: Our next question comes from Jeremy Tonet with Jpmorgan Chase. Please proceed with your question.
Hi, Jeremie hi, good afternoon.
Speaker Change: Alright.
Speaker Change: Good good thanks.
Speaker Change: Thanks for all the detail today, a lot of growth coming through there and maybe just wanted to.
Speaker Change: The fact that it there'll be some lag and the storm costs getting addressed and it's unlikely they'll begin to get recovered in 2025.
Speaker Change: Peel back a little bit more on Alabama, and Mississippi. There I think you talked about data centers a bit of growth there, but just wondering I guess, if you could provide a bit more color on what youre seeing there what could be upside be be there over time. It seems like these days.
Speaker Change: Okay, great understood. Thanks, so much.
Speaker Change: You bet.
Speaker Change: Mississippi in particular is really kind of pursuing some of them.
Speaker Change: Our next question comes from Jeremy Tonet with Jpmorgan Chase. Please proceed with your question.
Speaker Change: Growth more aggressively than others and just any other thoughts would be helpful. Thanks.
Speaker Change: Yes.
Speaker Change: Hi, Jeremie hi, good afternoon.
Speaker Change: Alabama, There was a meta project that was announced mid last year I think and it was a couple of hundred megawatts I think I mean, there is more activity occurring there now.
Speaker Change: All right.
Speaker Change: Good good thanks.
Thanks for all the detail today, a lot of growth coming through there and maybe just wanted to.
Speaker Change: They are broader economic development pipeline is very full of activities and projects in the same Mississippi.
Speaker Change: Peel back a little bit more on Alabama, and Mississippi, There I think he talked about data centers a bit of growth there, but just wondering I guess, if you could provide a bit more color on what you're seeing there what could be upside be be there over time and it seems like these days.
Speaker Change: Specifically I think did publicly announce the the compass project.
Speaker Change: Thanks.
Speaker Change: And then they also had a chemical manufacturer that expand the line so.
Speaker Change: Mississippi in particular is really kind of pursuing some of the.
Speaker Change: There was significant capacity opportunities for them. So I think we said it earlier.
Speaker Change: Growth more aggressively than others and just any other thoughts would be helpful. Thanks.
Speaker Change: Yeah, we know them in Alabama, there was a meta project that was announced mid last year I think and it was a couple of hundred megawatts I think I mean, there's more activity occurring there now.
Speaker Change: We see this migration this activity moving westward across our territory.
Speaker Change: And once again, it adds to that excitement and the opportunities we see.
Speaker Change: Their broader economic development pipeline is very full of activities and projects in the same Mississippi.
Speaker Change: Across our company and across just in the future.
Speaker Change: Got it that's helpful there and.
Speaker Change: Mississippi, I think did publicly announce the compass project.
Speaker Change: Just wanted to pivot towards Nucor for a minute if I could and clearly southern has been a leader here historically, but in the marketplace. There's been some trepidation with newbuild given some of the issues in the past.
Speaker Change: And then they also had a chemical manufacturer that expand the line so.
Speaker Change: There was significant capacity opportunities for them. So I think that we said it earlier.
Speaker Change: But just wondering any updated thoughts you could share there it seems like theres strong stakeholder momentum building, there and particularly as it relates to if a federal.
Speaker Change: We see this migration this activity moving westward across our territory and once again it adds to that excitement and the opportunities we see across our company and across you know just in the future.
Stop were to come together on EPC in case of for catastrophic insurance or if a hyperscale or is really willing to step in.
Speaker Change: Got it that's helpful. There and just.
Speaker Change: For that to more type of protection, there I guess, how that could impact your thought process at this point in time.
Speaker Change: Just wanted to pivot towards nuclear for a minute if I couldn't clearly southern has been a leader here historically, but in the marketplace. There's been some trepidation with newbuild given some of the issues in the past.
Speaker Change: Let me be perfectly clear.
Speaker Change: This country needs more nuclear.
Speaker Change: Nuclear is the best long term fit.
Speaker Change: But just wondering any updated thoughts you could share there it seems like theres strong stakeholder a momentum building, there and particularly as it relates to if of a federal.
Speaker Change: So the kind of low growth that the industry is experiencing right now.
Speaker Change: I'll stop be perfectly clear you've identified the risks.
Speaker Change: And whether it's through federal activity, whether it's through some private concerns willing to to participate.
Speaker Change: Backstop were to come together on EPC in case of for catastrophic insurance or if a hyperscale or is really willing to step in.
Speaker Change: Those risks must be mitigated and yes, I mean, we're going to continue to to make the case to tell the story.
Speaker Change: For that to more type of protection, there I guess.
Speaker Change: How that could impact your thought process at this point in time.
Speaker Change: Talk about the virtues that we're experiencing with vogtle, three and four and how well these units are running and the value of them.
Speaker Change: Let me be perfectly clear.
Speaker Change: This country needs more nuclear.
Speaker Change: I mean nuclear is the best long term fit for.
Speaker Change: With this growth that we're experiencing and and what we experienced as we went from unit three and unit four in terms of efficiency gains.
So the kind of low growth that the industry is experiencing right now.
Speaker Change: I'll stop be perfectly clear.
Speaker Change: So there was a wonderful story there for this country to to begin to make this investment and building more nuclear units because the more we build the greater efficiencies we experienced.
Speaker Change: You've identified the risks.
Speaker Change: And whether it's through federal activity, whether it's through some private concerns willing to to participate.
Speaker Change: Supply chain workforce all aspects of this process, we get better at it and that will help us with each project as we move forward. So yes, I mean, we're going to continue to work with our partners work with others on the utility companies.
Speaker Change: Those risks must be mitigated and yes, I mean, we're going to continue to to make the case to tell the story.
Speaker Change: About the virtues that we're experiencing with vogtle, three and four and how well these units are running and the value of them.
Speaker Change: With this growth that we're experiencing and and and and what we experienced as we went from unit three to unit four in terms of efficiency gains I mean, so there there was a wonderful story there for this country to to begin to make this investment and building more nuclear units.
Speaker Change: Talk about the virtues and the benefits and value of new nuclear going forward.
Speaker Change: Got it I'll leave it there thank you.
Speaker Change: Thank you.
Speaker Change: Our next question is from <unk> Chopra with Evercore. Please proceed with your question.
Speaker Change: The more we build the great efficiencies we experienced.
Speaker Change: Yes.
Speaker Change: Supply change workforce all aspects of this process, we get better at it and that will help us with each project as we move forward. So yes, I mean, we're going to continue to work with our partners work with others on the utility companies.
Analyst: Hey, Chris and then so you guys in a few weeks he just one one can't wait.
Speaker Change: Yeah, Yeah look forward.
Speaker Change: Just.
Speaker Change: One.
Speaker Change: Okay.
Speaker Change: Quick question.
Speaker Change: <unk> two <unk>.
Speaker Change: You discussed a lot already and all my other questions questions have been answered just.
Speaker Change: Talk about the virtues and the benefits and the value of new nuclear going forward.
Speaker Change: Trailing debt Capex increase.
Speaker Change: Got it I'll leave it there thank you.
Speaker Change: <unk> equity.
Speaker Change: Thank you.
Speaker Change: So capex went up 13 billion and it looks like you only give you gave partial equity last time around now this time, you've given the equity throughout the five year plan. Thank you for doing that but just it would put the equity on my math at roughly 20% of the capital increase in <unk>.
Speaker Change: Our next question is from their jazz Chopra with Evercore. Please proceed with your question.
Speaker Change: Yeah, Hey, Hey, Chris men. So you guys in a few weeks they just one one can't wait.
Speaker Change: Pointing to 30% to 40% so maybe what are the moving pieces is it slowing down dividend growth is it more tax grants that ability.
Speaker Change: Yeah, Yeah look forward.
Speaker Change: Just one.
Speaker Change: Quick question.
Speaker Change: You discussed a lot already and all the other questions or questions have been answered just reconciling the capex increase.
Speaker Change: Monetization just.
Speaker Change: What are the moving pieces there.
Speaker Change: Yes, I guess I wanted to hop out and just say, it's all of the above I mean, you really did hit on some of the key things. It's it is the other cash flow improvements the transferability of certainly supporting the overall five year plan with all of the tax credits that we have the kind of.
Speaker Change: To equity.
Speaker Change: So capex went up 13 billion and it looks like you know.
Speaker Change: You only give you gave partial equity last time around now this time, you've given the equity towards the five year plan. Thank you for doing that but just it would put the equity on my math at roughly 20% of the capital increase in <unk>.
Speaker Change: <unk>.
Speaker Change: Everything that we've done to kind of take.
Speaker Change: Turning to 30% to 40% so maybe what are the moving pieces is it slowing down dividend growth is it more tax benefit ability.
Speaker Change: Yeah.
Speaker Change: Equity need off the table prior to this not just the $500 million worth that we took off the table for 2025, but just how we thought about our financing plan last year with equity content.
Speaker Change: Monetization just.
Speaker Change: What are the moving pieces there.
Speaker Change: It's also just making sure that we are taking a pragmatic long term view on our objectives right. I think we are incredibly well positioned we definitely prioritize having that buffer against adversity, but there's absolutely no need to knee jerk to hit a particular number.
Speaker Change: Yes, I guess I wanted to hop out and just say, it's all of the above I mean, if you really did hit on some of the key things. It's it is the other cash flow improvements the transferability of certainly supporting the overall five year plan with all of the tax credits that we have.
Speaker Change: The kind of.
Speaker Change: Everything that we've done to kind of take.
Speaker Change: Any particular year as long as our long term objectives and discipline are met.
Speaker Change: <unk>.
Speaker Change: Equity need off the table prior to this not just a 500 million worth that we took off that they were 2025, but just how we thought about our financing plan last year with equity content.
Speaker Change: Thank you would you would you have to have the tax credit number handy what are you monetizing in terms of dollars on average.
Speaker Change: I don't have that certainly follow up with me.
Speaker Change: It's also just making sure that we are taking a pragmatic long term view on our objectives right. I think we are incredibly well positioned we definitely prioritize.
Speaker Change: We can get we can give you some sense of that but it's again, it's it's really just.
Speaker Change: Things for whether it's southern power projects or storage assets in the regulated business a lot of our tax credits can be.
Speaker Change: Having that buffer against adversity, but there's absolutely no need to knee jerk.
Speaker Change: Transferred we've got nuclear Ptc's for both three and four that can be transferred all of our legacy credits prior to IRA that were underlying can't be transferred but that doesn't but the transfer of transferring of the new ones means that we can monetize the old ones at the same time, so thats part of the uplift as well.
Speaker Change: Hit a particular number in any particular year as long as our long term objectives and discipline are met.
Speaker Change: Thank you would you would you happen to have the tax credit number handy what are you monetizing in terms of dollars on average.
Speaker Change: I don't have that certainly follow up how does move from what they are but we can get we can give you some sense of that but it's again, it's it's really just.
Speaker Change: Sure.
Speaker Change: Thank you.
Speaker Change: Our next question is from Paul Fremont with Ladenburg Thalmann. Please proceed with your question.
Speaker Change: Things for you know, whether it's southern power projects or storage assets in the regulated business a lot of our tax credits can't be.
Speaker Change: Hey, Paul Hey, Paul.
Speaker Change: Congratulations.
Speaker Change: First my questions I guess this quarter relates to southern power maybe the first question would be is it is it practical for somebody that consider.
Speaker Change: Transferred we've got you know.
Speaker Change: Nuclear P T six for both three and four that can be transferred all of our legacy credits prior to IRA that were underlying and can't be transferred but that doesn't but the transfer of transferring of the new ones means that we can monetize the old ones at the same time, so that's part of the uplift as well.
Speaker Change: Finishing the summer plant or restarting construction on the summer plant.
Speaker Change: Not southern power.
Speaker Change: Sure Yep. Thank you.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: I mean seriously I mean, we know there is a process underway.
Speaker Change: Our next question is from Paul Fremont with Ladenburg Thalmann. Please proceed with your question.
Speaker Change: Not sure how that's going to play out and what that will look like.
Speaker Change: I would suspect it will.
Paul: Hey, Paul Hey, Paul.
Congratulations.
Speaker Change: Also end up with a need for some of the things we talked about to mitigate some risk I mean, unless somebody is willing to put up the necessary capital.
Paul: First of all my questions I guess, just sort of relates to southern power. Maybe the first question would be is it is it practical for somebody that consider finishing the summer plant or or restarting construction on the summer plant.
Speaker Change: Two.
Speaker Change: To cover it.
Speaker Change: But.
Speaker Change: It's kind of a novel idea, but we'll see how that plays out but most certainly that is not something in the wheelhouse of southern power.
Not southern power.
Paul: Yeah.
No consideration.
Paul: [laughter].
Paul: I mean seriously I mean, we know there is a process underway.
Speaker Change: And then when you talk about sort of construction by southern power gas outside of.
Paul: Not sure how that's going to play out and what that will look like.
Speaker Change: Utility service territories.
I would suspect it will.
Speaker Change: Would it be logical to look at where you have gas ldcs as as to where that new construction might take place.
Paul: Also end up with a need for some of the things we talked about to mitigate risk I mean, unless somebody is willing to put up the necessary capital to.
Speaker Change: Not not necessarily Paul if you think about southern power's existing portfolio. So put the gas side. So we used to have gas assets in various parts of the country. We had some in Minnesota and we had some in Florida and other places, we've largely divested of everything but what's in the southeast but our renewable.
Paul: To cover it but I.
Paul: It's kind of a novel idea, but we'll see how that plays out but most certainly that is not something in the wheelhouse of southern power.
Speaker Change: Oh no consideration.
Speaker Change: And then when you talk about sort of construction by southern power gas outside of our utility service territories.
Speaker Change: Portfolio kind of spans the southwest in the Midwest, and it's really where the market design.
Would it be logical to look at where you have gas L. D CS as as to where that new construction might take place.
Speaker Change: Is kind of ripe for bilateral agreements like that in some cases, serving load serving entities, but what youre able to do in some of those other markets. As you will know is have kind of direct arrangements with large commercial and industrial customers and we've done a lot of that with our renewable fleet will look for those kind of opportunities on the gas.
Speaker Change: Not necessarily not necessarily Paul it if you think about southern power's existing portfolio. So put the gas side. So we used to have gas assets in various parts of the country. We had some in Minnesota and we had some in Florida and other places, we've largely divested of everything but what's in the south east, but our.
Speaker Change: And then last question for me.
Speaker Change: Would there.
Speaker Change: In time, where you would consider a potential spin off of your southern power subsidiary.
Speaker Change: Mobile portfolio kind of spans the southwest and in the Midwest and it's really where the market design.
Speaker Change: Okay.
I mean, we're going to look at everything all the time.
Is kind of ripe for bilateral agreements like that in some cases, serving load serving entities, but what you're able to do in some of those other markets. As you well know is have kind of direct arrangements with large commercial and industrial customers and we've done a lot of that with our renewable fleet will look for those kind of opportunities on the <unk>.
Speaker Change: That's not in our plan today I'll tell you.
Speaker Change: We are gratified to have held on to this business when others didn't it is a tremendous is tremendous optionality.
Speaker Change: Selling it.
Speaker Change: Certainly would be dilutive spinning it off we will see how big it gets in and whether or not that seems to make sense, but we love it as a complement to our portfolio today.
Speaker Change: Syed.
Speaker Change: And then last question for me.
Speaker Change: Would there come a point in time, where you would consider a potential spin off of your southern power subsidiary.
Speaker Change: And I think we've said this before I mean, we loved the cards we have.
Speaker Change: And as all of the.
Speaker Change: The utilities and these other complimentary businesses the contributions they make the participation that make the opportunities they afford us.
Speaker Change: Yeah.
Speaker Change: I mean, we're going to look at everything all the time.
Speaker Change:
Speaker Change: That's not in our plan today I'll tell you.
Speaker Change: We think supports just are our principal objectives in the long term durability.
Speaker Change: We are gratified to have held on to this business when others didn't it is a tremendous is tremendous optionality.
Speaker Change: Our company so.
Dan Tucker: Yes, I mean, as Dan said, it but kind of but we're very pleased with the cards we have.
Speaker Change: Selling it.
Speaker Change: It certainly would be dilutive spinning it off we will see how big it gets in and whether or not that seems to make sense, but we love it as a complement to our portfolio today.
Speaker Change: Great. Thank you so much.
Speaker Change: Thank you Paul.
Speaker Change: Our next question comes from Travis Miller with Morningstar Research. Please proceed with your question.
Speaker Change: And Paul I mean, I think we've said this before I mean, we loved the cards we have.
Speaker Change: And as all of the.
Speaker Change: The utilities and these other complimentary businesses the contributions they make the participation that make the opportunities they afford us.
Travis Miller: Hello, everyone and thank you.
Speaker Change: It's a little chilly up here.
Travis Miller: Chicago suburbs, so keep that guess.
Travis Miller: Going forward.
Speaker Change: Yeah.
Speaker Change: We think supports just are our principal objectives in the long term durability of our company. So.
Speaker Change: Core territory.
Speaker Change: Alright.
Speaker Change: My House, Alright, right underneath neighborhood pipe, so, yes, keeping going and don't don't blow at any point. Please.
Speaker Change: Yes, I mean, as Dan said, it but kind of but we're very pleased with the cards we have.
Speaker Change: Thanks, Ron Thanks for your business.
Speaker Change: Great. Thank you so much.
Speaker Change: Sure you're welcome I got the Bill on the table and make sure to pay in the next couple of days.
Speaker Change: Thank you Paul.
Speaker Change: Our next question comes from Travis Miller with Morningstar Research. Please proceed with your question.
Speaker Change: Anyway aside from that.
Speaker Change: I Wonder if you could talk a little bit about the dynamic between generation Capex and transmission capex, especially in 'twenty eight 'twenty nine it looks like.
Travis Miller: Hello, everyone and thank you.
Speaker Change: It's a little chilly up here in the Chicago suburbs, So keep that guess.
Travis Miller: Going forward.
Speaker Change: Lower even though you're a material number on the generation side, yet obviously, all the load growth you talked about.
Speaker Change: You got a unit Nitecore territory.
Corey: All right Corey that's where my house, Yeah right right.
And then the large number on the transmission side is transmission really the need here to serve that large load or would there be more generation coming.
Corey: But so keep it going and don't don't blow up at any point. Please.
Speaker Change: [laughter] Thanks, Ron Thanks for your business.
Speaker Change: Yes.
Speaker Change: Sarah you woke them I got the bill on the table and make sure to pay in the next couple of days.
Speaker Change: A very fair question, Travis and it really gets back to how we have.
Speaker Change: But anyway aside from that.
Speaker Change: Bifurcated the capital outlook here there is.
Speaker Change: I'm wondering if you could talk a little bit about the dynamic between generation Capex and transmission capex, especially in 'twenty eight 'twenty nine it looks like Oh.
Speaker Change: Better line of sight.
Speaker Change: On the transmission.
Speaker Change: And typically just given our structure that's something that.
Speaker Change: Lower even though you're a material number on the generation side you had obviously all the load growth you talked about.
Speaker Change: Unlike a generation resource can be purchased from a third party and our market we're vertically integrated the generation.
Speaker Change: And then a larger number on the transmission side as transmission really the need.
Tends to have optionality around it you can.
Speaker Change: Year to serve that large load or would there be more generation coming.
Speaker Change: By excess capacity from others, you've got to go through a process to determine the best resource and as I mentioned, we've got 13000 or 13 13 Gigawatts of outstanding Rfps, just in Georgia alone right now and so once that firms up that potential capital of $10 billion to $15 billion includes.
Speaker Change: Yeah. It's that's a very fair question Travis and it really gets back to how we have.
Speaker Change: <unk> the capital outlook here, but there is.
Speaker Change: Better line of sight.
Speaker Change: On the transmission.
Speaker Change: And typically just given our structure, that's something that you know.
Speaker Change: You know a lot of dollars associated with those very same generation resources youre trying to find in the table once they materialize to the extent they do.
Speaker Change: Unlike a generation resource can't be purchased from a third party and our market we're vertically integrated the generation.
Speaker Change: Thats when youll see them kind of marry up its transmission.
Speaker Change: Tends to have optionality around it you can.
Speaker Change: Okay that makes sense, yeah that goes back to your comment about the ppas.
Speaker Change: By excess capacity from others, you've got to go through a process to determine the best resource and as I mentioned, we've got 13000 or 13 13 Gigawatts of outstanding Rfps, just in Georgia alone right now and so once that firms up that potential capital of 10 to 15 billion includes.
Speaker Change: Maybe not satisfying all the RFP.
Speaker Change: Requests out there right.
Speaker Change: That's right.
Speaker Change: Yeah, Okay, and then one quick follow up in terms of transmission supply chain 90 equipment, what's the availability there what does that look like it was a lot of them.
Speaker Change: A lot of talk about the generation side of it what about transmission side of it.
Speaker Change: You know a lot of dollars associated with those very same generation resources, you're trying to find in the table once they materialize to the extent they do.
Speaker Change: It's challenging also but not as difficult as the on the generation side, but once again with our with the size and scale of our company and engagement of the work that we that we involve ourselves in what we do.
Speaker Change: That's when you'll see them kind of marry up with the transmission.
Speaker Change: Okay that makes sense, yeah that goes back to your comment about the Ppas and.
Speaker Change: Find ourselves in a pretty good place.
Speaker Change: Maybe not satisfying all the RFP.
But he is going to work that out it's worked on our supply chain organization is constantly staying on top of assessing the market.
Speaker Change: Requests out there right.
Speaker Change: That's right.
Speaker Change: Yeah, Okay, and then one quick follow up in terms of transmission supply chain 90 equipment, what's the availability there what does that look like it was a lot of them talk about the generation side of it what about <unk>.
Speaker Change: Working with our suppliers and vendors to make sure we understand what the dynamics are and making sure. We let them know what our needs are now and into the future.
Speaker Change: Left hand side of it.
Speaker Change: Absolutely okay very good thanks, so much.
It's it's challenging also but not as difficult as the on the generation side, but once again with our with the size and scale of our company and engagement of the work that we that we involve ourselves in we found ourselves in a pretty good place.
Speaker Change: Thank you.
Speaker Change: Our next question is from Ryan Levine with Citi. Please proceed with your question.
Speaker Change: Hi, Thanks, Hey, Thanks for squeezing me in and are you looking at any policy support to help attract datacenter growth in Alabama, specifically.
Speaker Change: But he is going to work that out it's worked on our supply chain organization is constantly staying on top of us.
Speaker Change: And are you looking at any changes to tariff design for these hyperscale customers like the changes made in Georgia.
Speaker Change: And the market.
Speaker Change: Working with our suppliers and vendors to make sure we understand what the dynamics are and making sure. We let them know what our needs are now and into the future.
Speaker Change: Yes, I'm not aware of any tariff legislation or incentives in Alabama.
Speaker Change: At this time.
Speaker Change: Absolutely okay very good thanks, so much.
Speaker Change: I mean, they do happening as they do overall economic development and there are some incentives packages that they have available, but I'm not aware of any kind of legislative effort underway and the second part of your question was yes tariffs.
Speaker Change: Thank you.
Speaker Change: Our next question is from Ryan Levine with Citi. Please proceed with your question.
Ryan Levine: Hi, Brian Hi, Thanks, Hi, Thanks for squeezing me in and are you looking at any policy support to help attract data center growth in Alabama, specifically.
Speaker Change: I'll take that Ryan and look we've got tremendous flexibility in the way we contract with large load customers, there's really not any kind of change.
Ryan Levine: And are you looking at any changes to tariff design for these hyperscale customers like the changes made in Georgia.
Speaker Change: Changes necessary to attract and serve and price appropriately.
Ryan Levine: Yeah, I'm I'm, not aware of any tariff legislation or incentives in Alabama.
Speaker Change: Customers.
Speaker Change: Okay I appreciate that thanks.
Ryan Levine: At this time.
Speaker Change: You bet. Thank you.
Ryan Levine: I mean, they do happening as they do overall economic development and there are some incentives packages that they have available, but I'm not aware of any kind of legislative effort underway and the second part of your question was yeah tariffs Oh I'll take that Ryan and look we've got tremendous flexibility in the way we contract with large.
Speaker Change: And that will conclude today's question and answer session third are there any closing remarks.
Speaker Change: Again, let me. Thank each of you for taking time to spend time with us today and thank you for your interest in Southern company. We are incredibly excited about our future and we look forward to talking to you again in the future. Thank you very much and have a good day.
Ryan Levine: Load customers, there's really not any kind of chain.
Speaker Change: Changes necessary to attract and serve and price appropriately.
Speaker Change: Thank you, Sir ladies and gentlemen, this concludes the southern company fourth quarter 2024 earnings call. You May now disconnect and we thank you for your participation.
Ryan Levine: Customers.
Ryan Levine: Okay I appreciate the time.
Ryan Levine: You bet. Thank you.
Speaker Change: And that will conclude today's question and answer session thorough are there any closing remarks.
Speaker Change: Again, let me. Thank each of you for taking time to spend time with us today and thank you for your interest in Southern company.
Speaker Change: We're incredibly excited about our future and we look forward to talking to you again in the future. Thank you very much and have a good day.
Speaker Change: Thank you, Sir ladies and gentlemen, this concludes the southern company fourth quarter 2024 earnings call. You May now disconnect and we thank you for your participation.