Q4 2024 Emera Inc Earnings Call
Wed now like to try the conference call over to Dave.
Dave: Vice President.
Speaker Change: Investor Relations. Please go ahead.
Dave: Sure.
Thank you Jenny and thank you all for joining US this morning for our mirrors fourth quarter 'twenty 'twenty four conference call and live webcast mirrors fourth quarter earnings release was distributed this morning via newswire and the financial statements management's discussion and analysis and the presentation being referenced on this call are available on our website at Amira Dot com.
Speaker Change: Joining me for this morning's call are Scott Bell, Florida mirrors, President and Chief Executive Officer, Greg Blunden M Erez, Chief Financial Officer, and other members of the merits management team.
Speaker Change: Before we begin I'd like to advise you that this morning's discussion will include forward looking information, which is subject to the cautionary statement contained in the supporting slide today's discussion and presentation will also include references to non-GAAP financial measures you should refer to the appendix for reconciliations of historical non-GAAP measures to the closest GAAP financial measure.
Scott: And now I will turn things over to Scott.
Scott: Thank you, Dave and good morning, everyone and you have to forgive me. This morning, I am sporting tail end of a cold so.
Scott: Voice isn't quite what it is and I may have to take a break for for a car.
Scott: This morning, we reported adjusted annual adjusted earnings per share of $2 94.
Scott: This is in line with both our 2023 adjusted earnings per share of $2 96, and the benchmark for adjusted EPS growth guidance, we shared last year.
Scott: Our 2024 results were bolstered by a strong fourth quarter.
Scott: We're higher contributions from our regulated utilities and lower corporate costs drove a 33% increase in quarterly adjusted earnings per share.
Scott: Our portfolio of premium utilities located predominantly in Florida continues to show strong growth.
Scott: Earnings contributions have been increasing as we continue to make rate based investments to support the significant population and economic growth happening across our jurisdictions as we continue to advance our reliability and resiliency efforts and as we work to meet with government mandated decarbonization targets.
Scott: Adjusted earnings contributions from our regulated utilities increased more than 24% quarter over quarter and 6% year over year. Despite the impact of lost earnings from the sale of our equity interest in the Labrador Island link.
Scott: I think of 'twenty 'twenty four it was a significant year of progress for a mirror and I'm proud of what we accomplished.
Scott: We began the year with a strategic plan.
Scott: Just on driving long term value for our shareholders.
Scott: Strengthen our balance sheet and credit ratings in order to reduce our cost of capital as we continue to pursue and invest in compelling growth opportunities across our portfolio.
Scott: A key focus of this plan involves a disciplined asset sales process.
Scott: And an optimized approach to capital allocation and.
Scott: And we delivered.
Scott: We achieved numerous milestones that advanced our planet.
Scott: We began with the sale of our equity interest in the Labrador Island link in June and we followed with the announcement of the sale of New Mexico gas in August, which we continue to expect will close later this year.
Scott: We also securitized more than $600 million of Unrecovered fuel costs at Nova Scotia power.
Scott: With these transactions, we more than doubled the expected proceeds from our asset sale program.
Scott: Strategic reallocation of capital announced in June, including adjusting our dividend growth rate to 1% to 2%.
Scott: Allows us to direct more of our growing cash flow towards our robust capital investment opportunities.
Scott: This action coupled with a strong catalyst for growth, we continue to see across the business and the constructive rate case outcomes achieved in 2024 reinforces our continuing confidence in our 5% to 7% average adjusted earnings per share growth through 2027.
Yeah.
Scott: The constructive rate case outcomes, we achieved in 2024 included new Mexico gas, reaching an unopposed settlement agreement in March are proving 30 million U S dollars and new rates that went into effect on October one.
Scott: And in December the Florida Public Service Commission issued its final decision on the Tampa electric rate application approving more than 99% of Tampa Electric's capital and operating spend.
Scott: This resulted in a 185 U S millions of new base rates for 2025.
Scott: Based on a 10.5% allowed Roe.
Scott: An increase of 30 basis points from the previous settlement.
Scott: In addition, the commission awarded subsequent year rate adjustments of $87 million in 2026, and additional $9 million in 2027 and support of capital projects completed after the test year.
The stability provided by a multiyear rate plan enables the business to prioritize operational efficiency, which is critical to effectively managing costs for customers.
Scott: This was a fair balanced decision, which reflects the commissions confidence in Tampa electric to make wise capital investment decisions and to prudently manage costs for customers.
Scott: In turn this gives us confidence to continue investing significant capital needed to support the region's growth and to continue to improve reliability and generating overall better outcomes for customers.
Scott: Key indicators continue to show the Florida's economy a strong.
Scott: Florida has the fastest growing population in the country with even stronger growth in Hillsborough County <unk>.
Scott: <unk> over the next 10 years.
Scott: In 2020 for Florida was also the number one state for net migration and.
Scott: And its GDP grew to 1.7 trillion U S dollars, a 4% increase over 2023.
Scott: The growth in Florida, coupled with a growing desire for natural gas has accelerated demand at peoples gas at a rate of more than double the population growth.
Scott: As a result peoples gas expects to invest nearly 800 U S. A million dollars in capital over the next two years to serve its existing and growing customer base with high levels of service and reliability.
Scott: To support the demand of capital investment at the utility a few weeks ago peoples gas notified the public service Commission of its intention to file for $90 billion to $110 billion of new rates to be effective January one of 2026, they anticipate filing in March.
Scott: I'm proud of what the teams have accomplished this year.
Scott: <unk> fleet deploying more than $3.2 billion in capital investment in 2024.
Scott: This was our largest annual capital investment ever resulting in roughly 7% rate base growth year over year.
Scott: Our capital plan continues to be focused on enhancing and expanding our infrastructure to deliver on customer needs today and in the future.
Scott: Last year, Tampa electric invested almost $2 billion Canadian of capital on behalf of its customers more than 10% of that capital supported the storm protection plan, which is pretty consistent with our level of investment in the plan over the last few years.
The value of these investments for customers was evident in the aftermath of the back to back Hurricanes, Helene and Milton with less system damage and faster restoration timelines than what otherwise would have been experienced.
Scott: Tampa Electric was recognized by the Edison Electric Institute for its impressive storm response effort and.
Scott: And despite these major storms Tampa electric still delivered another year of strong reliability performance in 'twenty 'twenty four for its customers.
To better support reliability and help manage customer costs Tampa electric continued to expand its solar fleet, adding an additional 100 megawatts of solar in 2024.
Scott: This brought total total solar capacity to more than 300 megawatts or 19% of its generating capacity.
Scott: And in 2024, 10% of Tampa Electric's energy came from visa.
Scott: Since we began investing in solar in Tampa Electric in 2027. These investments have saved customers more than 320 U S million dollars and avoided fuel costs.
Speaker Change: Peoples gas the roughly $450 million spent on capital in 2024 helped support customer growth and enhanced fuel resilience. The resiliency was highlighted during the active 2020 for hurricane season, where notwithstanding the devastation of these storms fewer than 0.3.
Speaker Change: Your sense of customers experienced a gas service interruption once again, demonstrating the important role natural gas plays in the energy mix in Florida.
Speaker Change: Peoples gas installed more than 500 million new miles of new main and service lines to service more than 18000, new residential and commercial customers that represents more than 4% customer growth.
Speaker Change: And at Nova Scotia Power capital investment has been laser focused on improving reliability.
Speaker Change: Last year the team at Nova Scotia power completed more reliability projects and more tree trimming than ever before in the company's history.
Speaker Change: This included replacing roughly 3000 poles and trimming more than 650 kilometers of trees.
Speaker Change: The value of this work for customers is clear in 2020 for Nova Scotia power experienced its best reliability year in 30 years.
Speaker Change: On a weather normalized basis power was on more than 99, 9% of the time in 2024 better than most across Atlantic, Canada and in fact better than most across the country.
Speaker Change: Looking forward we.
Speaker Change: We see incremental catalyst for growth in 2025 and beyond.
Speaker Change: In addition to the very strong rate base growth driven by the economic and population growth across our jurisdictions. Several key trends are converging to shape, a new future for regulated utilities.
Speaker Change: Accelerating demand and evolving grid decarbonization electrification and the increasing need for resilience against weather related events require unprecedented capital investment to deliver the reliable energy our customers expect.
Speaker Change: Our five year plan reflects all of this and we believe that the need for this kind of investment will continue to be necessary for the foreseeable future.
Speaker Change: We continue to manage the pace of capital investment keeping affordability top of mind.
Speaker Change: Beyond whats embedded in our capital plan, we're exploring ways, our utilities can support data center development in our jurisdictions.
Speaker Change: Okay.
Speaker Change: With low rates strong reliability and a supportive business environment, Florida is seen as an increasingly attractive location for datacenter investment, which would mean opportunities for Tampa electric to service the load as well as for peoples gas to provide required backup.
Speaker Change: Required fuel for backup generation.
Speaker Change: In 2025, it seems clear we can expect our business to benefit from a strengthening U S. Dollar were based on our current hedge position for the year every penny change drives a penny change in address adjusted EPS.
Speaker Change: As a result of a favorable tailwind we're seeing in our business, including foreign exchange, we expect our adjusted earnings per share growth over the three year guidance period to be somewhat front loaded.
Speaker Change: While we remain comfortable with our average 5% to 7% guidance over the three year period, we'll be disappointed if we don't see adjusted EPS growth that exceeds that range in 2025.
Before turning it over to Greg I want to express my thanks to our team for their hard work and agility in 2024 with unquestionably positioned well for the future.
Speaker Change: We accomplished a lot in 2024 and I'm proud how the team continues to rise to the challenge and set a high bar to deliver for our customers and investors.
Mirror and its operating companies are well equipped to navigate the evolving landscape of the utility sector and to capitalize on emerging opportunities and with that I'll turn it over to Greg to take you through our financial results.
Greg: Thank you Scott and thank you all for joining US. This morning, we reported fourth quarter adjusted earnings of $246 million and adjusted earnings per share of <unk> 84 cents.
Greg: This compares to $175 million and adjusted earnings per share of <unk> 63 cents in the fourth quarter of 2023.
Greg: For the year adjusted earnings increased 5% to $849 million from $809 million in 2023, and adjusted earnings per share were relatively in line with the prior year at $2.94 as compared to $2 96 and 2023.
Greg: Before turning to the driver or drivers of our financial results I want to briefly walk through some of the adjustments to reported earnings this quarter, which were largely driven by the recently enacted excessive interest and financing expenses or Eiffel legislation.
Greg: The implementation of Eiffel drove a tax recovery related to a specific financing structure and its windup.
Greg: And an incremental tax recovery associated with the sale of our equity interest in Labrador Island link both of which are nonrecurring in nature.
Greg: Unrelated to the Eiffel during the quarter, we discontinued the operations of block energy and as a result recognized some windup costs related to that process.
Greg: And that positive to earnings we have excluded all of the above items from adjusted earnings the best present, the ongoing operations of our business.
Greg: Turning to cash flow, our operating cash flow before changes in working capital was impacted by the storm cost deferral of Tampa electric as well as fuel deferrals at both hemp electric in Nova Scotia power.
At the end of 2020 for camp Electric filed an application with the FERC for recovery of approximately $464 million in storm costs incurred primarily during hurricanes, Milton and Helene as well as to replenish the storm reserve.
Greg: Earlier this month, the FERC approved the recovery over a period of 18 months beginning on March 1st.
Greg: While the typical recovery period for storm costs in Florida as 12 months, we are supportive of the commission's decision to modestly extend the recovery period to manage the cost impact to our customers.
Greg: When normalizing for fuel and storm regulatory deferrals operating cash flow before changes in working capital increased 7% to $2 billion, primarily driven by new rates of peoples gas and new Mexico gas and continued customer growth across our Florida utilities.
Greg: This was partially offset by transaction costs and lower contributions from the sale of our equity interest in Labrador Island link as well as lower contributions from Emera energy.
Greg: In 2024, we successfully executed on our strategic plan and in doing so improved our credit metrics by more than 100 basis points looking forward I want to reiterate what I said at our Investor day in December there can be no question about our ability to achieve threshold credit metrics. This year with $185 million of new rates in effect at Tampa electric they expect.
Greg: The close of the new Mexico gas transaction later, this year and other catalysts for growth, namely lower corporate costs.
Greg: We were pleased to see that last month S&P returned our outlook to stable in recognition of our successful efforts to de lever and reflecting confidence in our cash flow growth for 2025.
Greg: While we can't control the timing, we are confident that our actions to date and the visible cash flow cash flow growth positions us well for Moody's and Fitch to also return outlook to stable sometime this year.
Greg: Turning to our quarterly results increased contributions from all of our regulated utilities and lower corporate costs drove a 33% increase in adjusted EPS This quarter.
Greg: Robust performance of our gas utilities was a key driver of growth in the fourth quarter with U S. Dollar contributions increasing by more than 40% or $18 million. This was driven by higher earnings at both peoples gas and new Mexico gas as a result of new base rates.
Greg: Favorable weather and customer growth and Keith contributions from our Caribbean utilities, and Tampa electric during the quarter.
Greg: At Tampa electric the impact of new rates and customer growth was partially offset by loss load during hurricane Milton.
Greg: Contributions from our Canadian utilities was positively impacted by an income tax recovery recognized in Nova Scotia power. This was driven by the use of tax loss carryforwards to offset the taxable income that was created upon the reduction of our regulatory fueled deferral balance in the fourth quarter.
Greg: And while the impact was recognized in 2024. This would otherwise have been recognized over the forecast period as the outstanding fuel balance was recovered from customers. This was unexpected recovery that was reflected within our outlook for Nova Scotia power This year.
Greg: And the higher contributions from those grocery power, partially offset by the decreased contributions, resulting from the sale of our equity interest in the Labrador Island link.
Greg: Quarter over quarter corporate costs were favorably impacted by the recognition of a deferred tax asset. The recently enacted Eiffel legislation created more taxable income in 2024 and allowed us to take advantage of loss carryforwards that were previously not recognized.
Greg: Prior to the enactment of Eiffel, we were conservative and not recognizing the tax benefits related to all of our corporate costs and corporate interest expense.
Greg: And with the changes we are able to do so and expect reductions in our corporate tax expense of approximately $2 million to $4 million per quarter on an ongoing basis.
Greg: For the quarter. This was offset by timing difference in the valuation of our long term compensation and related hedges.
Greg: And finally less favorable market conditions and the recognition of investment tax credits of bear swamp in 2023 drove lower earnings from a mere energy compared to Q4 2023.
Greg: Many of the drivers for the quarter are the same as they are for the year, but there are a few items I'd like to highlight.
Greg: For the year, the strengthening U S dollar had a more meaningful impact on the earnings from our U S utilities, driving a <unk> increase in adjusted EPS compared to 2023 and.
Speaker Change: And as Scott mentioned based on our current positions for 2025 every one cent change in the Canadian U S. Dollar foreign exchange rate will have a roughly one cent impact on our adjusted earnings per share.
Speaker Change: Excluding the impact of foreign exchange earnings from New Mexico gas for the year decreased modestly due to lower <unk> revenues when compared to a very strong 2023.
Speaker Change: Contributions from our Canadian utilities decreased year over year due the sale of our equity interest in the Labrador Island link, which was more than offset by higher contributions from Nova Scotia power.
Speaker Change: And lastly, I want to highlight that while the timing differences in the evaluation of long term compensation and related hedge has created some volatility in our fourth quarter results as expected there was no impact on adjusted EPS year over year.
Speaker Change: We have made a modest technical change to our plans that will significantly reduce the quarterly volatility that we have recently experienced.
Scott: And with that I will turn it back over to Scott.
Scott: Thank you Greg as mentioned earlier the 2024, we successfully executed on our strategic plan that strengthened our balance sheet and optimized our portfolio.
We have a strong story focused in Florida with some.
Scott: One of the best assets in the North American facilities.
Scott: Pivotal time in our industry to invest in great demand resilience and efficiency.
Scott: We're ready to meet this moment and are focused on executing on our robust growth opportunities across our portfolio to deliver for customers and shareholders alike.
Scott: Now, we'd like to open the call for questions.
Scott: Okay.
Scott: Cool.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: You have a question and this question Star followed by the one on your Touchtone phone questions will be taken in the order received.
Speaker Change: Should you wish to cancel your request. Please press star followed by the two if you're using a speaker phone. Please lift the handset question any case once again that is star one third you wish to ask a question.
Speaker Change: Your first question is from Robert Hope from Scotiabank. Your line is now open.
Robert Hope: Good morning, everyone.
Speaker Change: The first questions on Nova Scotia.
Speaker Change: The budgets out there you have received regulatory approvals there.
Speaker Change: You are looking to see the allowed R&D earned ROE to be below the band in 2025, how do you think about measures are the path forward to get.
Speaker Change: Earned ROE in the band and when could we expect new rates.
Speaker Change: Hi, Rob, it's Peter for Nova Scotia power and good morning.
Speaker Change: We know we deal we do need to be on a path to rates, but we also.
Speaker Change: But we need to balance that with what our customers expect.
Speaker Change: Which is reliable and affordable power.
Speaker Change: Thanks.
Speaker Change: We continue to look for the right approach to this but working with stakeholders.
Speaker Change: Includes the provincial government to make sure that we do have that focus on reliability and.
Speaker Change: Affordability going forward.
Speaker Change: Thank you Nick.
Speaker Change: Sorry go ahead.
Speaker Change: Just wanted to make sure that we didn't lose everybody in the line my apologies.
Speaker Change: Your next question is from Maurice Choy from RBC capital markets. Your line is open.
Maurice Choy: Thanks, and good morning, everyone.
Maurice Choy: I just want to come back to comment you had in the prepared remarks, and I apologize if I misheard. This.
Maurice Choy: You mentioned that due to the FX tailwind.
Maurice Choy: Be disappointed.
Maurice Choy: <unk> does not exceed that.
Maurice Choy: Implied high 7% three year CAGR.
Maurice Choy: Assuming that's right.
Maurice Choy: I don't know is there any headwinds that you may.
Maurice Choy: You may see or are watching out for and just to be clear. When you make that comment are you using the $2.94 EPS in 2024 as your base because obviously that includes the two.
Maurice Choy: Benefits and corporate.
Maurice Choy: Corporate.
Maurice Choy: Yes, Maury you said Scott again, so yes, I mean, we've really benchmark against 296 was what we referenced in June So our 294 for 2024 was.
Maurice Choy: Was in pretty tight pretty tight to that but continue to stick with our 5% to 7%.
Maurice Choy: Our guidance over the 2020 over through to the 2027 period.
Maurice Choy: But yes, you heard correctly.
Maurice Choy: Staying with the with the tailwind that we're seeing we would expect 2025 to be stronger than.
Maurice Choy: And then that 5% to 7% range will be disappointed if we're if we're not exceeding that 5% to 7% range in terms of tailwind.
If FX goes goes goes the other way if we have.
Maurice Choy: Significantly unfavorable weather.
Maurice Choy: Would be the sort of the normal items that that might.
Maurice Choy: It might might.
Maurice Choy: It might impact things if there was if there was a headwind.
Maurice Choy: But right now, we're feeling pretty pretty comfortable with the 5% to 7% guidance over the three year period remain.
Maurice Choy: Very comfortable with that and are encouraged at what we're seeing as it relates to our expectations for 2025.
Maurice Choy: Thanks for that clarification, and just to finish off.
Maurice Choy: You mentioned that Florida may be at an attractive location for data Center development.
Maurice Choy: Curious within your five year plan.
Maurice Choy: Sure.
Maurice Choy: How much of any data center related investments do you have baked in there and if not much any thoughts on what the size of the assumption that it could be.
Greg: Yes, Laurie its Greg.
Speaker Change: In our five year capital plan, we don't have anything.
Speaker Change: Related to capital investments to support data centers and our sense is if we see something from a data center perspective.
Speaker Change: It'll be more modest compared to what you see in some jurisdictions, but it would certainly be helpful. A couple of years out from a load perspective, but certainly wouldn't necessarily drive any capital investment.
Speaker Change: Yeah.
Thank you Youre.
Speaker Change: Youre welcome.
Speaker Change: Thank you.
Speaker Change: Next question is from Mark Jarvi from CIBC capital markets. Your line is now open.
Speaker Change: Thank you good morning.
Speaker Change: I just wanted to.
Speaker Change: Again to the June 23rd hearing for new Mexico gas pretty well what would be the expectation on the timeline and the path for next steps beyond that for approval.
Speaker Change: Yes.
Greg: Yes, Mark it's Greg.
Speaker Change: The schedule is starting to become clear, but irrespective of whether it goes through a fully litigated process in new Mexico or like many change of controls in the state that often get done through settlements, we still think it'll be probably towards the end of the third quarter before we have resolution both of those paths.
Greg: The difference in timing would only be.
I believe a matter of weeks.
Greg: And so there's no settlement discussions are ongoing at this point now that table when it comes to the June hearings.
Greg: The settlement discussions are part of the process there, but even if there was a settlement the commission would still have to hear that settlement and opine on it and so that might shorten the process by a few weeks, but it would be weeks not months.
Speaker Change: Understood and then just wanted to dig into a couple of the outlook statements and the MD&A. One is the earnings for that STI should be comfortable with like 24, just curious if that reflects the tax recovery.
Speaker Change: The benefit of the 2024 numbers, which I think for your numbers the 160.
Speaker Change: Adjusted earnings and then the other one would be that youll be sort of at the bottom end of the ROE band at peoples gas.
Speaker Change: And any risks and go below and then to stay at that level is there a sort of some plans on deferrals of opex or capex.
Speaker Change: To manage the on are we primarily this year.
Speaker Change: Yeah, So mark first in Nova Scotia power is the short answer is yes.
Speaker Change: That concludes our adjusted earnings for this year and that's what we're referring to when we say we expect it to be relatively consistent next year.
Speaker Change: On peoples gas just the growth we're seeing in there right and the capital investment we have to make we don't really there's not a lot of flexibility and that we're investing investing this capital for on the bench for the benefit of our customers and keeping pace with the customer growth that we're seeing.
Speaker Change: But we're pretty comfortable with where we will be from a range perspective, obviously again weather can impact it a little bit.
Speaker Change: Again, the team down there that's why they've had to file for rates and the full application that we made in March.
Speaker Change: And in the interim we will be doing everything they can to manage their cost profile. Both from an operating capital perspective to make sure we stay in our band in 2025.
Ron: Okay. Thanks, Ron.
Speaker Change: Thanks Mark.
Speaker Change: Thank you once again, please press star one should you wish to ask a question.
Speaker Change: Your next question is from Ben Pham from BMO capital markets. Your line is now open.
Speaker Change: Hi, Good morning, I, just wanted to touch base on that.
Speaker Change: The attacks.
Speaker Change: Conversation.
Speaker Change: Just wanted to clarify on the corporate expense side it sounds like the.
Speaker Change: All the tax losses that <unk> had already sat in on a go.
Speaker Change: Gulfport, you'll get a benefit is there anything any other moving parts outside of that.
Speaker Change: No. That's affected is right I think we've taken.
Speaker Change: A prudent but conservative approach in the past to the extent that if we had corporate costs that are tax deductible, we havent been recognizing the.
Speaker Change: The deferred tax asset on it because we didn't necessarily have the visibility on utilization of those.
Speaker Change: The changes with Aiful, we will now be able to tax effect those items as you would traditionally expect so.
Speaker Change: So that'll provide a little bit of a tailwind going forward, probably to the tune of $2 million to $4 million a quarter.
Speaker Change: Okay.
Speaker Change: Got it and then also in that segment.
Speaker Change: But block energy.
Speaker Change: Maybe you could give us an update on <unk>.
Speaker Change: What happened there is that is that just simply just taking the loss out of future years on a year over year.
Speaker Change: Basis.
Speaker Change: Really just a defendant.
Speaker Change: Into effect, the wind down of that of that business well, we all along we're optimistic about the technology and the opportunity within the market.
Speaker Change: The reality is that the external environment to block energy changed changed dramatically.
Speaker Change: Over the last over the last 12 to 24 months, both as it relates to.
Speaker Change: Capital funding.
Speaker Change: In that tech tech sector, and frankly, even as it relates to.
Speaker Change: Sort of the.
Speaker Change: Push around decarbonization and some in some markets.
Speaker Change: And changing tax legislation. So we just made the very difficult decision against a business that we'd put put a little bit of heart and soul into.
Speaker Change: Over the last few years and thought had some promise that.
Speaker Change: But that is near term viability was challenged and our focus is on making sure that we're delivering on our earnings per share growth guidance and continuing to.
Speaker Change: Maximize returns and value for our shareholders and had to make the difficult decision that.
Speaker Change: We move on from that business and therefore, we took the provision.
Speaker Change: And Ben if I could add so as you're well aware it has been a bit of a drag on EPS of over the last couple of years and so obviously going forward.
Speaker Change: We won't have that same experience.
Speaker Change: Okay got it and maybe one last.
Speaker Change: Last question on the credit rating.
Speaker Change: You got your conversations yet.
Yes.
Speaker Change: Rate case.
Speaker Change: Successful.
Speaker Change: Is it really just more of them.
Speaker Change: Agency getting some visibility on that.
Speaker Change: In new Mexico sale of that.
Speaker Change: It's a big trigger point that I'm gonna decision.
Speaker Change: Yes, I think Thats I think thats.
Speaker Change: Probably the largest gating item for for the last two agencies that have moved this back to stable yet.
Speaker Change: Ben but.
Speaker Change: So.
Speaker Change: We're very confident we're not losing any sleep over whether or not in new Mexico is going to close we're very confident in that process.
Speaker Change: But I think a combination as we continue to print much stronger credit metrics every quarter on a trailing 12 months I think that will also be helpful.
Speaker Change: But yes, we believe the work has been done and that's why you can detect my extreme confidence that we will get to where we need to be in 2025.
Speaker Change: Okay got it thank you.
Pat: Thanks Pat.
Patrick Kenny: Thank you. Your next question is from Patrick Kenny from National Bank Financial Your line is now open.
Thank you and good morning, everyone.
Patrick Kenny: Maybe just Greg on the preferred debt ratio in Florida that ratio can you just clarify how you're normalizing for the mismatch in FX rates just in terms of.
Patrick Kenny: The debt at year end translated at $1 44, I believe versus cash.
Patrick Kenny: Cash flows coming in at a lower rate and then how are you thinking about that going forward with respect to the.
Patrick Kenny: 100 basis point decline in our show rate improvement in ratio.
Yes, when we talk about the improvement.
Patrick Kenny: Our expectations for 2025, Patrick where we.
Patrick Kenny: Normalizing for FX said.
Patrick Kenny: That whatever the average rate is for the year that would translate in our cash flows that should be done for the debt as well there is nothing particularly unique.
Patrick Kenny: The FX rate at December 31 for that none of our debt matures on December 31st obviously that is one reconciling item that we're still working through with the agencies on 2025 or sorry 2024. There is also the treatment fuel securitization of the Nova Scotia power storm caused the Tampa. So there is there is a number of items in <unk>.
Patrick Kenny: 2024 that we're still working through how the rating agencies treat it but as we look forward and those things are all normalized we're assuming that FX doesn't have any impact on our credit metrics.
Speaker Change: Okay. Thanks for that.
Scott: And then Scott maybe.
Patrick Kenny: You mentioned the.
Patrick Kenny: All being a fluid situation withheld the grids are evolving over time.
Patrick Kenny:
Patrick Kenny: Obviously, a lot of opportunities ahead of you from different avenues, but given capital is somewhat finite year could you, perhaps just provide us with your.
Patrick Kenny: Prioritizing or ranking in terms of.
Patrick Kenny: Grid reliability modernization versus.
Patrick Kenny: Decarbonization versus affordability type initiatives.
Patrick Kenny: Yes so.
Pat: And it's a good question Pat Thank you for that because it's one that.
Pat: <unk> has had a lot of discussion and debate as I'm sure you know.
Pat: Often referred to as the energy Trilemma, how do you balance all three of those things investments required for reliability investments required for de carbonization, and keeping rates affordable for customers and look from a decarbonize. Each perspective. The reality is we really were just executing government policy on <unk>.
Pat: De carbonization, we're not.
Pat: We're not driving investments specifically to Decarbonize, we will we will make investments that are the most cost effective for customers, while ensuring that we are meeting.
Whatever climate policies are in place, either legislatively or by or by regulators and so.
Pat: In terms of the priority is as you say as we hear from our customers. Our first priority would be reliability and a very close second would be affordability.
Pat: And those are the two most important within that.
Pat: To the extent that we can make de carbonization investments that help with affordability.
Pat: We will obviously do that and we will also obviously makes it decarbonize the carbonization investments that we required to in order to.
Pat: To comply with.
Pat: With government policy, which would largely be.
Pat: With Nova Scotia power, where there'd be both federal and provincial requirements in terms of meeting decarbonization.
Speaker Change: Okay, great. Thanks for that last housekeeping item, just any update on the timing for the.
Speaker Change: The dual listing.
Pat: The Nike.
Speaker Change: Okay.
Speaker Change: Yes, we're still working through what Patrick but it'll be in the spring.
Speaker Change: Okay.
Speaker Change: I'll leave it there.
Speaker Change: Hey, Thanks, Matt.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Well thank you.
Speaker Change: There are no further questions at this time I will now turn the call back to Dave prior to closing remarks.
Speaker Change: Thank you Jamie and thank you all for your interest in Amira. Please feel free to reach out to the Investor Relations team. If you have any follow up questions. Thank you all and have a great day.
Speaker Change: Thank you ladies and gentlemen, the conference has now ended thank you all for joining you may all disconnect your lines.