Q1 2025 CenterPoint Energy Inc Earnings Call

There will be a question and answer session after managements remarks.

To ask a question press star one on your Touchtone keypad.

I will now turn the call over to Jacky, Richard Senior Vice President of corporate planning Investor Relations and Treasurer, Mr. Richard.

Speaker Change: Good morning, and welcome to Centerpoint <unk> first quarter 2025 earnings conference call, Jason wealth, our CEO and Chris Foster, our CFO, who will discuss the company's first quarter results.

Jason Wells: Over the long term, we continue to expect to grow non-gap EPS at the mid to high end of our 6% to 8% range annually through 2030. We also expect to grow dividend per share in line with earnings growth over the same period of time.

This is a production of the Center for Autism and Related Disorders

Speaker Change: Management will discuss certain topics that contain projections and other forward looking information and statements that are currently based on management's beliefs assumptions and information currently available to management.

Jason Wells: I would like to now discuss the improvements we have made in advance of the upcoming hurricane season. As many of you recall, immediately after Hurricane Beryl, we introduced our Greater Houston Resiliency Initiative to significantly accelerate resiliency investments to reduce the number of outages during extreme weather events, as well as to help restore service more quickly when those outages occur. I'm proud of the progress our crews have made. By June 1st, we will double the number of grid automation devices on our system. will replace 26,000 poles designed to withstand extreme winds and trim or remove over 6,000 miles of high risk vegetation since we launched this initiative last August.

Speaker Change: These forward looking statements are subject to risks and uncertainties.

Speaker Change: Actual results could differ materially based on various factors as noted within our Form 10-Q, and other SEC filings as well as our earnings materials, we undertake no obligation to revise or update publicly any forward looking statements.

Speaker Change: Good morning and welcome to CenterPoint Energy's first quarter earnings conference call with senior management. During the company's prepared remarks, all participants will be in a listen-only mode. There will be a question and answer session after management's remarks. To ask a question, press star 11 on your touch-tone keypad.

Speaker Change: We reported 45 of earnings per share for the first quarter of 2025 on a GAAP basis.

Speaker Change: Management will be discussing certain non-GAAP measures on today's call when providing.

Speaker Change: Adding guidance, we use the non-GAAP EPS measure of diluted adjusted earnings per share on a consolidated basis referred to as non-GAAP EPS.

Jason Wells: It is important to note that much of this work is being performed in parallel with our base workload. In fact, taking all together, we will have completed what amounts to an extra one and a half years of work on top of our base work plan in the last nine months. I want to thank the team here at CenterPoint for acting with urgency to improve customer outcomes as we head into the 2025 hurricane season. We remain committed to working towards our goal of being the most resilient coastal grid in the country.

Speaker Change: For information on guidance methodology, and reconciliation of the non-GAAP measures used in providing guidance. Please refer to our earnings news release and presentation on our website, we use our website to announce material information.

Jason Wealth: This call is being recorded information on how to access the replay can be found on our website now I'd like to turn the call over to Jason.

Jason Wealth: Thank you Jackie and good morning, everyone on today's call I'd like to address four key areas of focus first I'll touch on our first quarter financial results second I will discuss the improvements we've made in advance of the upcoming hurricane season in support of our goal to build and operate the most resilient coastal grand in the country.

Jason Wells: Now, turning to my third key area of focus, a brief overview of our regulatory progress, including some recent filings at Houston Electric. Before I touch on any specific regulatory filing, I want to put into perspective what our teams have accomplished over the last 18 months. Last year, five of our now seven service territories were subject to a rate case proceeding that represented nearly 90% of our enterprise rate base. As of today, we have received final orders in three and are now awaiting another for our Minnesota gas. where we've already reached an all party settlement. After the conclusion of the last rate case for our Ohio gas business, we expect that over 80% of our enterprise rate base will not be subject to a general rate case proceeding for about another four years.

Speaker Change: We reported 45 cents of earnings per share for the first quarter of 2025 on a GAAP basis.

Speaker Change: Management will be discussing certain non-GAAP measures on today's call.

Jason Wealth: Third I'll provide a brief update on our regulatory progress through the first quarter and touch on a few recent filings at Houston Electric.

Speaker Change: When providing guidance we used the non-GAAP EPS measure of diluted adjusted earnings per share on a consolidated basis referred to as non-GAAP EPS.

Jason Wealth: And lastly, I'll provide an update on the continued significant and diversified load growth in our Houston Electric service territory, which is driving an increase of $1 billion to our capital investment plan through 2030.

Speaker Change: For information on guidance methodology, and reconciliation of the non-GAAP measures used in providing guidance. Please refer to our earnings news release and presentation on our website.

Jason Wealth: Now starting with our first quarter results. This morning, we announced non-GAAP EPS of <unk> 53 for the first quarter.

Speaker Change: Use our website to announce material information.

Jason Wealth: As a quick reminder, and as Chris will cover in more detail.

Jason: This call is being recorded information on how to access the replay can be found on our website now I'd like to turn the call over to Jason.

Jason Wealth: I want to emphasize that our incremental revenue from capital recovery mechanisms will be more weighted to the second half of the year as we were unable to access those mechanisms consistent with our historical schedules last year, given our rate case activity.

Jason Wells: This significantly de-risked regulatory profile provides a solid foundation for our financial plan through the remainder of the decade. I now want to briefly touch on a few filings in our Houston Electric Service Territory.

Jason: Thank you Jackie and good morning, everyone on today's call I'd like to address four key areas of focus first I'll touch on our first quarter financial results.

Christopher Foster: Chris will provide updates on filings in our other jurisdictions in his.

Jason Wealth: We anticipated this profile when we initiated our guidance and we are reaffirming our 2025 non-GAAP EPS guidance range from $1 74 to $1 76, which equates to 8% growth at the midpoint from our deliver 2024, non-GAAP EPS of $1 62.

Jason: Second I will discuss the improvements we've made in advance of the upcoming hurricane season in support of our goal to build and operate the most resilient coastal greater the country.

Jason Wells: I'll start with our most recent filing related to our temporary generation units. Last week, we made a filing to remove the unamortized rate base of our large temporary generation. As a result, average residential customers will see a reduction in their electric delivery charges, which, over time, will equate to a monthly savings of up to $2. This plan was publicly supported by several key stakeholders at a recent legislative hearing.

Jason: Third I'll provide a brief update on our regulatory progress through the first quarter and touch on a few recent filings at Houston Electric.

Jason Wealth: The long term, we continue to expect to grow non-GAAP EPS at the mid to high end of our 6% to 8% range annually through 2030.

Jason: And lastly, I'll provide an update on the continued significant and diversified load growth in our Houston Electric service territory, which is driving an increase of $1 billion to our capital investment plan through 2030.

Jason Wealth: We also expect to grow dividend per share in line with earnings growth over the same period of time.

Jason Wells: Second, I want to provide an update on our system resiliency plan filing. As you may recall, we refiled our system resiliency plan at the end of January. The contents of that filing were informed broadly by our extensive stakeholder engagement after Hurricane Beryl. We heard loud and clear that our stakeholders wanted a more resilient grade delivered at an accelerated pace. We believe the investments included in our updated filing are responsive to that feedback, as well as the feedback we've received from intervenors from our initial filing. We look forward to further discussing the merits of our plan during a mutually agreed to mediation, which is scheduled for next week.

Jason Wealth: I would like to now discuss the improvements we have made in advance of the upcoming hurricane season.

Jason: Now starting with our first quarter results. This morning, we announced non-GAAP EPS of <unk> 53 for the first quarter.

Jason Wealth: As many of you recall immediately after hurricane barrel, we introduced our greater Houston Resiliency initiative to significantly accelerate resiliency investments to reduce the number of outages during extreme weather events as well as to help restore service more quickly when those outages occur.

Jason: As a quick reminder, and as Chris will cover in more detail.

Jason: I want to emphasize that our incremental revenue from capital recovery mechanisms will be more weighted to the second half of the year as we were unable to access those mechanisms consistent with our historical schedules last year, given our rate case activity.

Jason Wealth: I'm proud of the progress our crews have made by June 1st we will double the number of grid automation devices on our system will replace 26000 pools designed to withstand extreme winds and trim or remove over 6000 miles of high risk vegetation. Since we launched this initiative last August.

Jason: We anticipated this profile when we initiated our guidance and we are reaffirming our 2025 non-GAAP EPS guidance range from $1 74 to $1 76, which equates to 8% growth at the midpoint from our deliver 2024, non-GAAP EPS of $1 62.

Jason Wells: Absent a settlement in this docket, the PECT has a statutory deadline of mid-September to issue its final order.

Jason Wealth: It is important to note that much of this work is being performed in parallel with our base workload plan and.

Jason Wells: Lastly, I want to touch upon our upcoming cost determination filing related to the storm cost recovery for Hurricane Beryl and other storms. Within the next two weeks, we anticipate making our cost determination filing to seek recovery of the $1.1 billion of cost incurred to restore over 2 million outages as a result of Hurricane Beryl. In addition, this filing will also include approximately $100 million of restoration costs related to two subsequent storms. Approximately 90% of the hurricane barrel-related costs are related to 2,000 CenterPoint frontline personnel and nearly 13,000 mutual aid workers who traveled from approximately 30 states over a nine-day period.

Jason: For the long term, we continue to expect to grow non-GAAP EPS at the mid to high end of our 6% to 8% range annually through 'twenty three.

Jason Wealth: In fact taken altogether, we will have completed what amounts to an extra one and a half years of work on top of our base work plan in the last nine months.

Jason: We also expect to grow dividend per share in line with earnings growth over the same period of time.

Jason Wealth: I want to thank the team here at Centerpoint for acting with urgency to improve customer outcomes as we head into the 2025 hurricane season.

Jason: I would like to now discuss the improvements we have made in advance of the upcoming hurricane season.

Jason: As many of you recall immediately after hurricane barrel, we introduced our greater Houston Resiliency initiative to significantly accelerate resiliency investments to reduce the number of outages during extreme weather events as well as to help restore service more quickly when those outages occur.

Jason Wealth: We remain committed to working towards our goal of being the most resilient coastal grid in the country.

Jason Wealth: Now turning to my third key area of focus a brief overview of our regulatory progress, including some recent filings at Houston Electric.

Jason Wealth: Before I touch on any specific regulatory filing I want to put into perspective, what our teams have accomplished over the last 18 months.

Jason: I'm proud of the progress our crews have made by June 1st we will double the number of grid automation devices on our system will replace 26000 pools designed to withstand extreme winds and trim or remove over 6000 miles of high risk vegetation. Since we launched this initiative last August.

Jason Wells: Notably, their work led to restoration times that were in line or better than other Texas peers, as well as peers outside of Texas, that experienced similarly damaging storms. The Securitization Mechanism for Texas Utilities continues to be an important and constructive storm cost recovery tool for both customers and utilities. It mitigates the customer bill impact of system damage from severe weather while also providing liquidity to utilities to continue to efficiently fund capital investments for the benefit of customers.

Jason Wealth: Last year five of our now seven service territories were subject to a rate case proceeding that represented nearly 90% of our enterprise rate base.

Jason Wealth: As of today, we have received final orders in three and are now awaiting another for our Minnesota gas business, where we have already reached an all party settlement.

Jason: It is important to note that much of this work is being performed in parallel with our base workload play.

Jason: In fact taken altogether, we will have completed what amounts to an extra one and a half years of work on top of our base work plan in the last nine months.

Jason Wealth: After the conclusion of the last rate case for our Ohio gas business, we expect that over 80% of our enterprise rate base will not be subject to a general rate case proceeding for about another four years.

Jason: I want to thank the team here at Centerpoint for acting with urgency to improve customer outcomes as we head into the 2025 hurricane season.

Jason Wells: We look forward to working with stakeholders towards a constructive resolution of this upcoming file.

Jason Wealth: This significantly Derisk regulatory profile provides a solid foundation for our financial plan through the remainder of the decade.

Christopher Foster: As I mentioned, Chris will cover the details of our other regulatory filings in his section.

Jason: We remain committed to working towards our goal of being the most resilient coastal grid in the country.

Jason Wealth: I now want to briefly touch on a few filings at our Houston Electric service territory.

Jason Wells: Finally, I want to discuss the recent load growth trends in our Houston Electric Service Territory and provide some additional color on the $1 billion increase to our capital investment plan through 2030. As you may recall, on our last quarter call, we outlined what we believe to be a conservative forecast of a 10 gigawatt increase by 2031 in peak load on our Keystone Electric system. We continue to see positive trends that only bolster our confidence in this forecasted load growth figure. Notably, since we submitted our forecast to ERCOT at the end of January, our load interconnection queue has grown by another seven gigawatts through 2031.

Jason: Now turning to my third key area of focus a brief overview of our regulatory progress, including some recent filings at Houston Electric.

Jason Wealth: Chris will provide updates on filings in our other jurisdictions in his section.

Jason Wealth: I'll start with our most recent filing related to our temporary generation units last week, we made a filing to remove the unamortized rate base of a large temporary generation units.

Jason: Before I touch on any specific regulatory filing.

Jason: Want to put in perspective, what our teams have accomplished over the last 18 months.

Jason: Last year five of our now seven service territories were subject to a rate case proceeding that represented nearly 90% of our enterprise rate base.

Jason Wealth: As a result average residential customers will see a reduction in their electric delivery charges, which overtime will equate to a monthly savings of up to $2.

Jason: As of today, we have received final orders in three and are now awaiting another for our Minnesota gas business, where we have already reached an all party settlement.

Jason Wealth: This plan was publicly supported by several key stakeholders at a recent legislative hearings.

Jason Wealth: Second I want to provide an update on our system resiliency plan filing as you may recall, we refiled our system resiliency plan at the end of January the.

Jason Wells: This represents a nearly 20% increase in load interconnection requests in a little more than two months. This significant increase is driven by a diverse set of load growth factors, including industrial customer demand, data centers, and transportation electrification projects. At this time, we are not increasing our forecast of a peak load increase of 10 gigawatts by 2031, which, as a reminder, represents about a 50 percent increase in peak demand on our system over the next six years. However, these new data points provide us even stronger conviction in our submitted forecast. This tremendous growth potential will undoubtedly require additional capital investment in the electric transmission system, which, as we alluded to in a fourth quarter call, we believe to be at least an incremental $3 billion of capital investment by the end of the decade.

Jason: After the conclusion of the last rate case for our Ohio gas business, we expect that over 80% of our enterprise rate base will not be subject to a general rate case proceeding for about another four years.

Jason Wealth: The contents of that filing were informed broadly by our extensive stakeholder engagement after hurricane barrel, we heard loud and clear that our stakeholders wanted a more resilient grid delivered at an accelerated pace.

Jason: This significantly Derisk regulatory profile provides a solid foundation for our financial player through the remainder of the decade.

Jason Wealth: We believe the investments included in our updated filing are responsive to that feedback as well as the feedback we've received from Interveners from our initial filing.

Jason: I now want to briefly touch on a few filings at our Houston Electric service territory.

Jason: This will provide updates at filings in our other jurisdictions in his section.

Jason Wealth: We look forward to further discussing the merits of our plan during a mutually agreed to mediation, which is scheduled for next week.

Jason: I'll start with our most recent filing related to our temporary generation units last week, we made a filing to remove the unamortized rate base of a large temporary generation units as.

Jason Wealth: Any settlement in this docket. The PCT is a statutory deadline of mid September to issue its final order.

As a result average residential customers will see a reduction in their electric delivery charges, which overtime will equate to a monthly savings of up to $2.

Jason Wealth: Lastly, I want to touch upon our upcoming cost determination filing related to the storm cost recovery for hurricane barrel and other storms.

Jason Wells: would likely more thereof. While the total forecasted capital investment and exact timing are still being refined and will be influenced by the PECT recommendation on the high-voltage standard, we plan to incorporate the increased capital investment in our guidance over the course of this year, starting with today's increase of $1 billion. This initial $1 billion increase in our capital investment guidance, which now takes our total investment plan to $48.5 billion through 2030. reflects nearly a dozen transmission projects we will be submitting to ERCOT's regional planning group in the coming weeks. We will continue working with stakeholders on the final transmission voltage standard and anticipating providing additional updates to our capital investment guidance over the next two quarters.

Jason: This plan was publicly supported by several key stakeholders at a recent legislative hearings.

Jason Wealth: Within the next two weeks, we anticipate making our cost determination filing to seek recovery of the $1 1 billion of cost incurred to restore over 2 million outages as a result of hurricane barrel in.

Jason: Second I want to provide an update on our system resiliency plan filings as you may recall, we refiled our system resiliency plan at the end of January.

Jason Wealth: In addition, this filing will also include approximately $100 million of restoration costs related to two subsequent storms.

Jason: Contents of that filing we're informed broadly by our extensive stakeholder engagement after hurricane barrel, we heard loud and clear that our stakeholders wanted a more resilient grid delivered at an accelerated pace.

Jason Wealth: Approximately 90% of the hurricane barrel related costs are related to 2000, and Centerpoint frontline personnel and nearly 13000 mutual aid workers, who traveled from approximately 30 states over a 90 day period.

Jason: We believe the investments included in our updated filing are responsive to that feedback as well as the feedback we've received from Interveners from our initial filing.

Jason Wealth: Notably their work led to restoration times that were in line or better than other Texas peers as well as peers outside of Texas that experienced similarly, damaging storms.

Jason: We look forward to further discussing the merits of our plan during a mutually agreed to mediation, which is scheduled for next week apps.

Jason: Perhaps any settlement in this docket. The PCT is a statutory deadline of mid September to issue its final order.

Jason Wealth: The securitization mechanism for Texas utilities continues to be an important and constructive storm cost recovery tool for both customers and utilities.

Jason Wells: In addition to these electric transmission investment opportunities, we continue to see a robust set of incremental capital investment opportunities in our Houston Electric Service Territory, as well as other jurisdictions. In Houston Electric, we see the potential capital investment opportunities as we partner with the City of Houston on its Downtown Revitalization Program, which will require substantial investment to support both growth and modernization of our underground electric system and our downtown sub-system. We will also evaluate additional resiliency investments towards the latter part of the decade as we continue to aim to be the most resilient coastal grid in the United States.

Jason: Lastly, I want to touch upon our upcoming cost determination filing related to the storm cost recovery for hurricane barrel and other storms.

Jason Wealth: Mitigates the customer bill impact of system damage from severe weather, while also providing liquidity to utilities to continue to efficiently fund capital investments for the benefit of customers.

Jason: Within the next two weeks, we anticipate making our cost determination filing to seek recovery of the $1 $1 billion of cost incurred to restore over 2 million outages as a result of hurricane barrel in.

Jason Wealth: We look forward to working with stakeholders towards a constructive resolution of this upcoming filing.

Jason: In addition, this filing will also include approximately $100 million of restoration costs related to two subsequent storms.

Jason Wealth: As I mentioned, Chris will cover the details of our other regulatory filings in his section.

Finally, I wanted to discuss some recent load growth trends in our Houston Electric service territory and provide some additional color on the $1 billion increase to our capital investment plan through 2030.

Jason: Approximately 90% of the hurricane barrel related costs are related to 2000, and Centerpoint frontline personnel and nearly 13000 mutual aid workers, who traveled from approximately 30 states over a 90 day period.

Jason Wells: We also have a number of incremental capital investment opportunities outside of our Houston Electric business. One example relates to our Texas gas business, which relies on third parties to move our own gas throughout the greater Houston region. We believe there's an investment opportunity to build a localized high-pressure distribution network around the city of Houston. similar to what we've constructed in our Minnesota Gas Service Territory that can result in significant savings for our customers.

Jason Wealth: As you may recall on our last quarter call. We outlined what we believe to be a conservative forecast of a 10 gigawatt increased by 2031 and peak load on our Houston Electric system.

Jason: Notably their work led to restoration times that were in line or better than other Texas peers as well as peers outside of Texas that experienced similarly, damaging storms.

Jason Wealth: We continue to see positive trends had only bolster our confidence in this forecasted load growth figure.

Jason: The securitization mechanism for Texas utilities continues to be an important and constructive storm cost recovery tool for both customers and utilities.

Jason Wealth: Notably since we submitted our forecaster ERCOT at the end of January our load interconnection queue has grown by another seven gigawatts through 2031. This represents a nearly 20% increase in load interconnection requests and a little more than two months.

Jason: Mitigates the customer bill impact of system damage from severe weather, while also providing liquidity to utilities to continue to efficiently fund capital investments for the benefit of customers.

Jason Wells: Investments related to this project will likely begin next year and extend well into the next We are excited to share more about all of these capital investment opportunities in the third quarter of this year when we plan to provide a new comprehensive 10-year plan. These examples of capital investment opportunities across our business further strengthens our conviction that we have one of the most tangible long-term growth plans in the industry. We believe that the growth in Houston Electric Service Territory, in combination with the capital investment opportunities and our other businesses, will continue to drive growth for years to come.

Jason Wealth: This significant increase was driven by a diverse set of load growth factors, including industrial customer demand data centers and transportation electrification projects.

Jason: We look forward to working with stakeholders towards a constructive resolution of this upcoming filing.

Jason: As I mentioned, Chris will cover the details of our other regulatory filings in his section.

Jason Wealth: At this time, we're not increasing our forecast of a peak load increase of 10, Gigawatts by 2031, which as a reminder represents about a 50% increase in peak demand on our system over the next six years. However, these new data points provide us even stronger conviction in our submitted forecasts.

Jason: Finally, I wanted to discuss the recent load growth trends at our Houston Electric service territory and provide some additional color on the $1 billion increase to our capital investment plan through 2030.

Jason: As you may recall on our last quarter call. We outlined what we believe to be a conservative forecast of a 10 gigawatt increased by 2031 and peak load at our Houston Electric system.

Jason Wealth: This tremendous growth potential we will undoubtedly require additional capital investment in the electric transmission system, which as we alluded to on our fourth quarter call.

Jason Wells: Equally important, this growth will also provide a sustainable platform for our customers, whose charges will continue to benefit from the ever-growing population and economic activity. We are privileged to serve all of the communities across our four-state footprint, and we continue to focus on executing for the benefits of our customers and all of our stakeholders.

Jason Wealth: We believe to be at least an incremental $3 billion of capital investment by the end of the decade with likely more thereafter.

Jason: We continue to see positive trends had only bolster our confidence in this forecasted load growth figure.

Jason: Notably since we submitted our forecast to ERCOT at the end of January our load interconnection queue has grown by another seven gigawatts through 2031. This represents a nearly 20% increase in load interconnection requests and a little more than two months.

Jason Wealth: While the total forecasted capital investment and exact timing are still being refined and will be influenced by the PCT recommendation on the high voltage standard.

Christopher Foster: And with that, I'll hand it over to Chris. Thanks, Jason. This morning, I will plan to cover four areas of focus. First, the details of our first quarter results and how we're thinking about the remainder of the year. Second, I'll touch on the regulatory progress we've made across the various states that we have the privilege to serve. Third, I'll discuss our progress on the execution of the 2025 Capital Investment Plan and our positively revised Capital Investment Plan through 2030. And finally, I'll provide an update on where we ended the first quarter with respect to the balance sheet and credit management.

Jason Wealth: We plan to incorporate the increased capital investment in our guidance over the course of this year, starting with today's increase of $1 billion.

Jason: This significant increase was driven by a diverse set of load growth factors, including industrial customer demand data centers and transportation electrification projects.

Jason Wealth: This initial $1 billion increase in our capital investment guidance, which now takes our total investment plan to $48 5 billion through 2030.

Jason: At this time, we're not increasing our forecast of a peak load increase of 10, Gigawatts by 2031, which as a reminder represents about a 50% increase in peak demand on our system over the next six years. However, these new data points provide us even stronger conviction in our submitted forecasts.

Jason Wealth: It reflects nearly a dozen transmission projects, we will be submitting to ERCOT to regional planning group in the coming weeks.

Jason Wealth: We will continue working with stakeholders on the final transmission voltage standard and anticipating providing additional updates to our capital investment guidance over the next two quarters.

Jason: This tremendous growth potential will undoubtedly require additional capital investment in the electric transmission system, which as we alluded to on our fourth quarter call.

Christopher Foster: Let's now move to the financial results shown on slide 7. On a GAAP EPS basis, we reported 45 cents for the first quarter of 2025. On a non-GAAP basis, we reported $0.53 for the first quarter of 2025, compared to $0.55 in the first quarter of 2024. Our non-GAAP EPS results for the first quarter remove the book loss resulting from the sale of Louisiana and Mississippi gas LDCs. As part of the sale, $217 million of goodwill was disposed. This was the reason for the book loss associated with the transaction. Now, taking a closer look at the quarter, growth in rate recovery contributed three cents when compared to the same quarter last year.

Jason Wealth: In addition to these electric transmission investment opportunities, we continue to see a robust set of incremental capital investment opportunities and our Houston Electric service territory as well as other jurisdictions.

Jason: We believe to be at least an incremental $3 billion of capital investment by the end of the decade.

Jason: With likely more thereafter.

Jason: While the total forecasted capital investment and exact timing are still being refined and will be influenced by the PCT recommendation on the high voltage standard we plan to incorporate the increased capital investment or our guidance over the course of this year, starting with today's increase of $1 billion.

Jason Wealth: In Houston Electric we see the potential capital investment opportunities as we partner with the city of Houston on its downtown revitalization program, which will require substantial investment to support both growth and modernization of our underground electric system in our downtown Substations.

Jason Wealth: We will also evaluate additional resiliency investments towards the latter part of the decade as we continue to aim to be the most resilient coastal grid in the United States.

Jason: This initial $1 billion increase in our capital investment guidance, which now takes our total investment plan to $48 5 billion through 2030.

Jason Wealth: We also have a number of incremental capital investment opportunities outside of our Houston electric business.

Jason: Reflects nearly a dozen transmission projects, we will be submitting to ERCOT to regional planning group in the coming weeks.

Christopher Foster: I want to take a moment to discuss why this figure is lower than what you've seen in our previous first quarter earnings. As a reminder, during 2024, we were prosecuting five separate rate And due to this, we were unable to recover our capital investments on our normal filing rhythm of traditional interim recovery mechanisms. In some cases, such as the distribution and transmission capital trackers at Houston Electric, these filings were delayed several months from when they were traditionally filed. In other instances, such as the GRIP filing at Texas Gas, we were unable to file for recovery of capital investments for over a year.

An example relates to our Texas gas business, which relies on third parties to move our owned gas throughout the greater Houston region.

Jason: We will continue working with stakeholders on the final transmission voltage standard.

Jason: Dissipating, providing additional updates to our capital investment guidance over the next two quarters.

Jason Wealth: We believe there is an investment opportunity to build a localized high pressure distribution network around the city of Houston similar to what we've constructed in our Minnesota gas service territory that could result in significant savings for our customers.

Jason: In addition to these electric transmission investment opportunities, we continue to see a robust set of incremental capital investment opportunities and our Houston Electric service territory as well as other jurisdictions.

Jason Wealth: Investments related to this project will likely begin next year and extend well into the next decade.

Jason: In Houston Electric we see the potential capital investment opportunities as we partner with the city of Houston on its downtown revitalization program, which will require substantial investment to support both growth and modernization of our underground electric system in our downtown Substations.

Jason Wealth: We are excited to share more about all of these capital investment opportunities in the third quarter of this year when we plan to provide a new comprehensive 10 year plan.

Jason Wealth: These examples of capital investment opportunities across our business further strengthens our conviction that we have one of the most tangible long term growth plans in the industry.

Christopher Foster: The filings we made during the first quarter represent a catch-up of capital investment recovery and represent nearly $2.2 billion of capital investments made in 2024 and nearly $260 million of associated revenue requirement in 2020. Over the next few months, rates will be updated and the associated earnings will begin to materialize. As such, you should expect a lower earnings profile in the first half of 2025, primarily due to these timing differences. Slide 7 depicts our expectation for the earnings shape for the remainder of the year. As you can see, we expect a more back-weighted earnings profile than typical in our non-post-rate case year.

Jason: We will also evaluate additional resiliency investments towards the latter part of the decade as we continue to aim to be the most resilient coastal grid in the United States.

Jason Wealth: We believe that the growth in Houston Electric service territory in combination with a capital investment opportunities in our other businesses will continue to drive growth for years to come.

Jason: We also have a number of incremental capital investment opportunities outside of our Houston electric business.

Jason Wealth: Equally important this growth will also provide a sustainable platform for our customers, whose charges will continue to benefit from the ever growing population and economic activity.

One example relates to our Texas gas business, which relies on third parties to move our owned gas throughout the greater Houston region.

We believe there is an investment opportunity to build a localized high pressure distribution network around the city of Houston.

Chris Foster: We are privileged to serve all of the communities across our four state footprint and we continue to focus on executing for the benefits of our customers and all of our stakeholders and with that I'll hand, it over to Chris.

Jason: Similar to what we've constructed in our Minnesota gas service territory that could result in significant savings for our customers.

Jason: Investments related to this project will likely begin next year and extend well into the next decade.

Chris Foster: Thanks, Jason.

Christopher Foster: As Jason mentioned, this shape was known at the time we initiated guidance, and we are confident in our ability to execute through the remainder of the year. Coming back to the quarter, weather and usage was a favorable 5 cents when compared to the comparable quarter of 2024, as Texas and Indiana both had more seasonably normal weather as compared to the milder weather of Q1 2024. O&M was two cents unfavorable when compared to the first quarter of 2024. This was primarily driven by the timing of work, as we sought to accelerate our vegetation management work ahead of the official start of the 2025 hurricane season.

Chris Foster: This morning, I will plan to cover four areas of focus.

Jason: We are excited to share more about all of these capital investment opportunities in the third quarter of this year when we plan to provide a new comprehensive 10 year plan.

Chris Foster: First the details of our first quarter results and how we're thinking about the remainder of the year.

Chris Foster: Second I will touch on the regulatory progress we've made across the various states that we have the privilege to serve.

Jason: These examples of capital investment opportunities across our business further strengthens our conviction that we have one of the most tangible long term growth plans in the industry.

Chris Foster: Third I'll discuss our progress on the execution of the 2025 capital investment plan.

Chris Foster: Our positively revised capital investment plan through 2030.

Jason: We believe that the growth in Houston Electric service territory in combination with a capital investment opportunities at our other businesses will continue to drive growth for years to come equally.

Chris Foster: And finally I'll provide an update on where we ended the first quarter with respect to the balance sheet and credit metrics.

Jason: Equally important this growth will also provide a sustainable platform for our customers, whose charges will continue to benefit from the ever growing population and economic activity.

Chris Foster: Let's now move to the financial results shown on slide six.

Christopher Foster: In addition, interest expense and financing costs were four cents unfavorable when compared to the first quarter in 2024. These four cents were primarily driven by the approximately $3.4 billion of net new debt issuances since the first quarter of last year, some of which were slightly higher coupon junior subordinated notes, given our focus on the balance sheet and emphasis on credit-supportive instruments. Lastly, as you may recall, last year we issued $500 million of common equity. $250 million of these issuances were a pull forward from 2025 as we sought to strengthen our balance sheet after storm restoration.

Chris Foster: On a GAAP EPS basis, we reported <unk> 45 for the first quarter of 2025.

Jason: We are privileged to serve all of the communities across our four state footprint and we continue to focus on executing for the benefits of our customers and all of our stakeholders.

Chris Foster: On a non-GAAP basis, we reported <unk> 53 for the first quarter of 2025 compared to 55 in the first quarter of 2024.

Chris: With that I'll hand, it over to Chris.

Chris Foster: Our non-GAAP EPS results for the first quarter removed the book loss, resulting from the sale of Louisiana, and Mississippi gas Ldcs.

Chris: Thanks, Jason.

Chris: This morning, I'll plan to cover four areas of focus.

Chris: First the details of our first quarter results and how we're thinking about the remainder of the year.

Chris Foster: As part of the sale $217 million of goodwill was disposed. This was the reason for the book loss associated with the transaction.

Chris: Second I will touch on the regulatory progress we've made across the various states that we have the privilege to serve.

Chris Foster: Now taking a closer look at the quarter growth and rate recovery contributed <unk> when compared to the same quarter last year.

Chris: Third I'll discuss our progress on the execution of the 2025 capital investment plan.

Chris: Our positively revised capital investment plan through 2030.

Christopher Foster: These equity issuances resulted in an unfavorable variance of two cents, quarter over quarter.

Chris Foster: I want to take a moment to discuss why this figure is lower than what you've seen in our previous first quarter earnings walks.

Chris: And finally I'll provide an update on where we ended the first quarter with respect to the balance sheet and credit metrics.

Christopher Foster: Next, I'll briefly touch on our regulatory progress related to the Interim Capital Recovery Trackers we filed during the quarter, starting with Houston Electric. As I mentioned in my earlier remarks, we had a number of interim filings that we filed outside of our normal case. The Distribution Capital Recovery Tracker, or DCRF, was one such. We filed the first of our two allowed for the year at the end of February with a requested revenue requirement increase of approximately $123 million. This filing incorporates capital investments made between January and December of last year and was updated for revenues otherwise recovered in our Houston Electric.

Chris Foster: As a reminder, during 2024, we're prosecuting five separate rate cases, and due to this we were unable to recover our capital investments on a normal filing rhythm of traditional interim recovery mechanisms.

Chris: Let's now move to the financial results shown on slide six.

Chris: On a GAAP EPS basis, we reported <unk> 45 for the first quarter of 2025.

Chris Foster: In some cases, such as the distribution and transmission capital trackers at Houston Electric.

Chris: On a non-GAAP basis, we reported <unk> 53 for the first quarter of 2025 compared to 55 in the first quarter of 2024.

Chris Foster: These filings were delayed several months from when they were traditionally filed.

Chris Foster: In other instances such as the grip filing in Texas gas, we were unable to file for recovery of capital investments for over a year.

Chris: Our non-GAAP EPS results for the first quarter removed the book loss, resulting from the sale of Louisiana, and Mississippi gas L. D. CS.

Chris Foster: The filings we made during the first quarter, representing a catch up of capital investment recovery and represent nearly $2 2 billion of capital investments made in 2024, and nearly $260 million of associated revenue requirement increases.

Chris: As part of the sale $217 million of goodwill was disposed. This was the reason for the book loss associated with the transaction.

Chris: Now taking a closer look at the quarter growth and rate recovery contributed <unk> when compared to the same quarter last year.

Christopher Foster: We expect that customer delivery charges will be updated later in June. In addition to the Distribution Capital Tracker filing, we also filed for the first of our two Allowed Transmission Recovery Tracker filings, or TCOS. This filing included a revenue requirement increase of approximately $64 million. which was recently approved with rates anticipated to be updated in the coming weeks.

Chris Foster: Over the next few months rates will be updated and the associated earnings will begin to materialize.

Chris: I want to take a moment to discuss why this figure is lower than what you've seen in our previous first quarter earnings walks.

Chris Foster: As such you should expect a lower earnings profile in the first half of 2025, primarily due to these timing differences.

Chris: As a reminder, during 2024, we're prosecuting five separate rate cases, and due to this we were unable to recover our capital investments on a normal filing rhythm of traditional interim recovery mechanisms.

Chris Foster: Slide seven depicts our expectation for the earnings shape for the remainder of the year.

Chris Foster: As you can see we expect a more back weighted earnings profile than typical in our non postal rate case year.

Christopher Foster: and moving now to Texas Gas. In mid-February, we filed our Annual Capital Investment Recovery Mechanism, or GRIP, which included a revenue requirement increase of approximately $71 million. I'd like to highlight that this is another one of the interim recovery mechanisms that we were unable to file last year as we prosecuted the Texas gas rate. The $71 million revenue request is larger than previous GRIP filings, as it incorporates 15 months of capital investments, for which we are seeking recovery, rather than the traditional 12 months. We anticipate customer gas delivery charges will be updated to reflect the new revenue requirement associated with this filing by early June.

Chris: In some cases, such as the distribution and transmission capital trackers at Houston Electric this.

Chris Foster: As Jason mentioned this shape was known at the time, we initiated guidance and we are confident in our ability to execute through the remainder of the year.

Chris: These filings were delayed several months from when they were traditionally filed.

Chris: In other instances such as the grip filing in Texas gas, we were unable to file for recovery of capital investments for over a year.

Chris Foster: Coming back to the quarter.

Chris Foster: Weather and usage was a favorable <unk> <unk> when compared to the comparable quarter of 2024, as Texas and Indiana, both had more seasonably normal weather as compared to the milder weather of Q1 2024.

Chris: The filings we made during the first quarter represented a catch up of capital investment recovery and represent nearly $2 2 billion of capital investments made in 2024, and nearly $260 million of associated revenue requirement increases.

Chris Foster: O&M was <unk> <unk> unfavorable when compared to the first quarter of 2024.

Chris Foster: This was primarily driven by the timing of work as we thought to accelerate our vegetation management work ahead of the official start of the 2025 hurricane season.

Chris: Over the next few months rates will be updated and the associated earnings will begin to materialize.

Chris: As such you should expect a lower earnings profile in the first half of 2025, primarily due to these timing differences.

Chris Foster: In addition.

Chris Foster: Interest expense and financing costs were <unk> <unk> unfavorable when compared to the first quarter in 2024.

Christopher Foster: Next, I'll touch on our capital investment plan execution through the first quarter and our positively revised capital plan through 2030, as shown here on slide 8. In the first quarter of 2025, we invested $1.3 billion of base work for the benefit of our customers and communities. In short, we are right on track to meet our 2025 capital investment target of $4.8 billion. Looking further ahead, and as Jason mentioned, today we are increasing our capital investment plan that runs through 2030 by $1 billion. from $47.5 billion to now $48.5 billion. We intend to finance these incremental investments in line with our previously communicated rule of thumb of 50% equity and 50% debt.

Chris: Slide seven depicts our expectation for the earnings shape for the remainder of the year as.

Chris Foster: <unk> were primarily driven by the approximately $3 4 billion.

Chris: As you can see we expect a more back weighted earnings profile than typical in our non postal rate case year.

Chris Foster: Of net new debt issuances since the first quarter of last year, some of which were slightly higher coupon junior subordinated notes given our focus on the balance sheet and emphasis on credit supportive instruments.

Chris: As Jason mentioned this shape was known at the time, we initiated guidance and we are confident in our ability to execute through the remainder of the year.

Chris Foster: Lastly, as you may recall.

Chris: Coming back to the quarter.

Chris Foster: Last year, we issued $500 million of common equity.

Chris: Weather and usage was a favorable <unk> <unk> when compared to the comparable quarter of 2024, as Texas and Indiana, both had more seasonably normal weather as compared to the milder weather of Q1 2024.

Chris Foster: $250 million of these issuances were a pull forward from 2025 as we sought to strengthen our balance sheet after storm restoration.

Chris Foster: These equity issuances resulted in an unfavorable variance of <unk> quarter over quarter.

Chris: O&M was <unk> <unk> unfavorable when compared to the first quarter of 2024.

Chris: This was primarily driven by the timing of work as we thought to accelerate our vegetation management work ahead of the official start of the 2025 hurricane season.

Chris Foster: Next I'll briefly touch on our regulatory progress related to the interim capital recovery trackers, we filed during the quarter, starting with Houston electric.

Christopher Foster: To be clear, however, we are not updating this year's equity plans, as we still do not intend to issue common equity. That's because we pulled forward our 2025 equity base plan needs last year. Today's capital investment increase is one of our first steps in a planned effort to sustainably increase our capital investment plan to support the rapid and significant growth the greater Houston area continues to experience. Over the next two quarters, you should expect incremental updates regarding CapEx and associated financing. Later in Q3 of this year, we will be in a position to aggregate all of these updates, as well as provide others to you to give you all a comprehensive update and a new 10-year plan.

Chris: In addition.

Chris Foster: As I mentioned in my earlier remarks, we had a number of interim filings that we filed outside of our normal cadence.

Chris: Interest expense and financing costs were <unk> <unk> unfavorable when compared to the first quarter in 2024.

Chris Foster: The distribution capital recovery tracker or <unk> was one such filings.

Chris: These <unk> were primarily driven by the approximately $3 4 billion.

Chris: Net new debt issuances since the first quarter of last year, some of which were slightly higher coupon junior subordinated notes given our focus on the balance sheet and emphasis on credit supportive instruments.

Chris Foster: We filed the first of our two allowed for the year at the end of February with our requested revenue requirement increase of approximately $123 million.

Chris Foster: This filing incorporates capital investments made between January and December of last year.

Chris: Lastly, as you may recall.

Chris: Last year, we issued $500 million of common equity.

Chris Foster: And was updated for revenues otherwise recovered in our Houston Electric case.

Chris: $250 million of these issuances were a pull forward from 2025 as we sought to strengthen our balance sheet after storm restoration.

Chris Foster: We expect that customer delivery charges will be updated later in June.

Chris Foster: In addition to the distribution capital tracker filings. We also filed for the first of our two allowed transmission recovery tracker filings or T cost.

Chris: These equity issuances resulted in an unfavorable variance of <unk> quarter over quarter.

Christopher Foster: Finally, I want to touch on how we're thinking about the balance sheet and where we ended the quarter with respect to our credit metric. As of the end of the quarter, our trailing 12-month adjusted FFO-to-debt ratio based on the Moody's Rating Methodology was 13.9% when removing transitory storm-related costs. This quarter, we made progress towards getting back to our target cushion range of 100 to 150 basis points with the closing of our Louisiana and Mississippi LDP. which resulted in net cash proceeds of a little over a billion dollars. We also expect an additional $400 million of securitization proceeds related to the May 2024 derecho storm event later this summer.

Chris: Next I'll briefly touch on our regulatory progress related to the interim capital recovery trackers, we filed during the quarter, starting with Houston electric.

Chris Foster: This filing included a revenue requirement increase of approximately $64 million, which was recently approved with rates anticipated to be updated in the coming weeks.

Chris: As I mentioned in my earlier remarks, we had a number of interim filings that we filed outside of our normal cadence.

Chris Foster: And moving now to Texas gas.

Chris Foster: In mid February we filed our annual capital investment recovery mechanism or grip, which included a revenue requirement increase of approximately $71 million.

The distribution capital recovery tracker or <unk> was one such filings.

Chris: We filed the first of our two allowed for the year at the end of February.

Chris Foster: I'd like to highlight that this is another one of the interim recovery mechanisms that we were unable to file last year as we prosecuted the Texas gas rate case.

Chris: With our requested revenue requirement increase of approximately $123 million.

Chris: This filing incorporates capital investments made between January and December of last year.

Chris Foster: The $71 million revenue request is larger than previous grip filings as it incorporates 15 months of capital investments for which we are seeking recovery rather than the traditional 12 months.

Chris: And was updated for revenues otherwise recovered in our Houston Electric case.

Christopher Foster: In addition, as Jason discussed, we plan to file for the cost determination for the roughly $1.1 billion of storm costs related to Hurricane Beryl and $100 million related to other storms within the next two weeks. We anticipate receiving securitization bond proceeds around the end of this year. During the quarter, we also took advantage of the recent stock performance and proactively worked to de-risk 2026's financing In particular, we executed equity forward sales through our ATM program of approximately $145 million. With respect to 2025 Common Equity Needs, there is no change, as we do not anticipate the need for Common Equity through the remainder of the year to fund our current plan.

Chris: We expect that customer delivery charges will be updated later in June.

Chris: In addition to the distribution capital tracker filing we also filed for the first of our two allowed transmission recovery tracker filings or T cost.

Chris Foster: We anticipate customer gas delivery charges will be updated to reflect the new revenue requirement associated with this filing by early June.

Chris Foster: Next I'll touch on our capital investment plan execution through the first quarter and are positively revised capital plan through 2030 as shown here on slide eight.

Chris: This filing included a revenue requirement increase of approximately $64 million, which was recently approved with rates anticipated to be updated in the coming weeks.

Chris Foster: In the first quarter of 2025, we invested $1 $3 billion of base work for the benefit of our customers and communities.

Chris: And moving now to Texas gas.

Chris: In mid February we filed our annual capital investment recovery mechanism or grip, which included a revenue requirement increase of approximately $71 million.

Chris Foster: In short we are right on track to meet our 2025 capital investment target of $4 8 billion.

Chris: I'd like to highlight that this is another one of the interim recovery mechanisms that we were unable to file last year as we prosecuted the Texas gas rate case.

Chris Foster: Looking further ahead and as Jason mentioned today, we are increasing our capital investment plan that runs through 2030 by $1 billion.

Christopher Foster: However, we'll continue to be opportunistic in addressing 2026 Equity Needs. We will continue to stay laser-focused in supporting the balance sheet while also investing for the benefit of our customers and communities. We are off to a solid start in 2025, and we are right on plan to deliver our full year results. We are reaffirming our 2025 non-GAAP EPS guidance range of $1.74 to $1.76. which equates to 8% growth at the midpoint from our delivered 2024 non-gap EPS of $1.62. Over the long term, we continue to expect to grow non-GAP EPS at the mid to high end of the 6 to 8 percent range annually through 2030.

Chris: The $71 million revenue request is larger than previous grip filings as it incorporates 15 months of capital investments for which we are seeking recovery rather than the traditional 12 months.

Chris Foster: From $47 5 billion to now $48 5 billion.

Chris Foster: We intend to finance these incremental investments in line with our previously communicated rule of thumb, a 50% equity and 50% debt.

Chris: We anticipate customer gas delivery charges will be updated to reflect the new revenue requirement associated with this filing by early June.

Chris Foster: To be clear. However, we are not updating this year's equity plans as we still do not intend to issue common equity.

Chris: Next I'll touch on our capital investment plan execution through the first quarter and are positively revised capital plan through 2030 as shown here on slide eight.

Chris Foster: That's because we pulled forward our 2025 equity base plan needs last year.

Chris Foster: Today's capital investment increase is one of our first steps in a planned effort to sustainably increase our capital investment plan to support the rapid and significant growth the greater Houston area continues to experience.

Chris: In the first quarter of 2025, we invested $1 $3 billion of base work for the benefit of our customers and communities.

Jason Wells: We look forward to the remainder of 2025 and executing for the benefit of all stakeholders.

Chris: In short we are right on track to meet our 2025 capital investment target of $4 8 billion.

Chris Foster: Over the next two quarters, you should expect incremental updates regarding capex and associated financing.

Jason Wells: And with that, I'll now turn the call back over to Jason. Thank you, Chris. We are excited about the opportunities in front of us through the end of the decade and beyond, and we look forward to sharing an updated 10-year plan in the third quarter of this year.

Chris: Looking further ahead and as Jason mentioned today, we are increasing our capital investment plan that runs through 2030 by $1 billion.

Chris Foster: Later in Q3 of this year, we will be in a position to aggregate all of these updates as well as provide others to you to give you all a comprehensive update and a new 10 year plan.

Chris: From $47 5 billion to now $48 5 billion.

Operator: Thank you, Jason.

Operator: With that, we'll now turn it over to Q&A. Operator. At this time, we will begin taking questions. If you wish to ask a question, please press star 11 on your touch-tone keypad. The company requests that when asking a question, callers pick up their telephone handsets. Thank you.

Chris Foster: Finally, I want to touch on how we're thinking about the balance sheet and where we ended the quarter with respect to our credit metrics.

Chris: We intend to finance these incremental investments in line with our previously communicated rule of thumb.

Chris Foster: As of the end of the quarter, our trailing 12 months adjusted <unk> to debt ratio based on the Moody's rating methodology was 13, 9%.

Chris: 50% equity and 50% debt.

Chris: To be clear. However, we are not updating this year's equity plans as we still do not intend to issue common equity.

Shahriar Pourreza: Our first question is from Shahriar Pourreza with Guggenheim Partners. Hi, good morning team.

Chris Foster: When removing transitory storm related costs.

Chris: That's because we pulled forward our 2025 equity base plan needs last year.

Chris Foster: This quarter, we made progress towards getting back to our target cushion range of 100 to 150 basis points with the closing of our Louisiana and Mississippi L. D.

Chris: Today's capital investment increase is one of our first steps in a planned effort to sustainably increase our capital investment plan to support the rapid and significant growth the greater Houston area continues to experience.

Constantine Lednev: It's actually Constantine here for Shahriar. Thanks for taking questions.

Constantine Lednev: Starting off on the CapEx update, as you were including the $1 billion of upside today, how should we be thinking about the cadence of updates as we get to the 3Q roll forward? Do you anticipate more incremental updates in the 2030 plan, or is there a more comprehensive 3Q update? How does the higher run rate imply for the upside when you roll forward the plan?

Chris Foster: Which resulted in net cash proceeds of a little over $1 billion.

Chris Foster: We also expect an additional $400 million of securitization proceeds related to the May 2024, Derecho storm event later this summer.

Chris: Over the next two quarters, you should expect incremental updates regarding capex and associated financing.

Chris: Later in Q3 of this year, we will be in a position to aggregate all of these updates as well as provide others to you to give you all a comprehensive update and a new 10 year plan.

Chris Foster: In addition, as Jason discussed we plan to file for the cost determination for the roughly $1 $1 billion of storm costs related to hurricane barrel and.

Jason Wells: Yeah, good morning, Constantine. It's Jason here. Maybe two key points, and then I'll expand. First, you know, we do see significant CapEx tailwinds across our business, in particular in Houston Electric, but also, as I alluded to, in our Texas gas business as well. Second, and to your point on timing, You know, we have a history of updating kind of our CapEx guidance as we get incremental data points, and I, we're going to continue to use that that approach. So, you know, this quarter, we've updated the CapEx guidance for the billion dollars, really reflecting the nearly dozen projects that will be filing with the ERCOT Regional Planning Group.

Chris: Finally, I want to touch on how we're thinking about the balance sheet and where we ended the quarter with respect to our credit metrics.

Chris Foster: And $100 million.

Chris Foster: Related to other storms within the next two weeks.

Chris Foster: We anticipate receiving securitization bond proceeds around the end of this year.

Chris: As of the end of the quarter, our trailing 12 months adjusted <unk> to debt ratio based on the Moody's rating methodology was 13, 9%.

Chris Foster: During the quarter.

Chris Foster: We also took advantage of the recent stock performance and proactively worked to de risk 2020, Six's financing plan.

Chris: When removing transitory storm related costs.

Chris Foster: In particular, we executed equity forward sales through our ATM program of approximately $145 million.

Chris: This quarter, we made progress towards getting back to our target cushion range of 100 to 150 basis points with the closing of our Louisiana and Mississippi L. D.

Chris Foster: With respect to 2025 common equity needs. There is no change as we do not anticipate the need for common equity through the remainder of the year to fund our current plan.

Chris: Which resulted in net cash proceeds of a little over $1 billion.

Chris Foster: However, we will continue to be opportunistic in addressing 2026 equity needs.

Chris: We also expect an additional $400 million.

Jason Wells: We have additional projects that we will file later this summer. So there will be a time, you know, whether it's a second quarter call or third quarter call, we'll have even incremental. updates with respect to electric transmission, and then we will also provide, as we've discussed, a much more comprehensive update in the third quarter, really rolling forward that 10-year plan. But last time we initiated a 10-year plan, you know, we initiated it at $40 billion and today it's at $48.5 billion. The CAPEX tailwinds remain significant and I'd expect us just to be in a periodic rhythm of updating as we get additional regulatory guidance.

Chris: Our securitization proceeds related to the May 2024, Derecho storm event later this summer.

Chris Foster: We will continue to stay laser focused in supporting the balance sheet, while also investing for the benefit of our customers and communities.

Chris: In addition, as Jason discussed we plan to file for the cost determination for the roughly $1 $1 billion of storm costs related to hurricane barrel.

Chris Foster: We are off to a solid start in 2025, and we are right on plan to deliver our full year results.

Chris Foster: We are reaffirming our 2025 non-GAAP EPS guidance range of $1 74 to $1 76, which equates to 8% growth at the midpoint from our delivered 2024, non-GAAP EPS of $1 62.

Chris: And $100 million.

Chris: Related to other storms within the next two weeks.

Chris: We anticipate receiving securitization bond proceeds around the end of this year.

Chris: During the quarter. We also took advantage of the recent stock performance and proactively worked to de risk 2020 Six's financing plan.

Chris Foster: Over the long term, we continue to expect to grow non-GAAP EPS at the mid to high end of the 6% to 8% range annually through 2030.

Chris: In particular, we executed equity forward sales through our ATM program of approximately $145 million.

Chris Foster: We look forward to the remainder of 2025 and executing for the benefit of all stakeholders and with that.

Chris: With respect to 2025 common equity needs. There is no change as we do not anticipate the need for common equity through the remainder of the year to fund our current plan How's.

Constantine Lednev: Great, thanks for that.

Jason Wells: And we've seen some regulatory lag issues with peers in Texas due to the growth and inflection CapEx. And as you're adding the CapEx and rolling forward, do you see any rate constructs being adequate to limit the ROE issues given you just came out of the rate case? Or would you look for any improvements and constructs on a go forward basis? Yeah, let me be clear. I don't see any challenge with regulatory lag to achieve the guidance. that we've initiated. And I think our track record helps prove that. You know, when we initiated our original 10-year plan, we doubled CapEx at Houston Electric.

Jason Wealth: I'll now turn the call back over to Jason.

Speaker Change: Thank you Chris we are excited about the opportunities in front of us through the end of the decade and beyond and we look forward to sharing an updated 10 year plan in the third quarter of this year.

Chris: However, we will continue to be opportunistic in addressing 2026 equity needs.

Chris: We will continue to stay laser focused in supporting the balance sheet, while also investing for the benefit of our customers and communities.

Speaker Change: Thank you, Jason with that I will now turn it over to Q&A operator.

Chris: We are off to a solid start in 2025, and we are right on plan to deliver our full year results.

Speaker Change: At this time, we will begin taking questions.

Speaker Change: Just ask a question. Please press star one one earnings has some keypad now.

Chris: We are reaffirming our 2025 non-GAAP EPS guidance range of $1 74 to $1 76.

Speaker Change: Any request that when asking a question Carlos pick up their telephone handsets. Thank you.

Chris: This equates to 8% growth at the midpoint from our delivered 2024, non-GAAP EPS of $1 62.

Speaker Change: Our first question is from Shar <unk> with Guggenheim partners.

Jason Wells: We've since doubled it again. And we've also nearly doubled it yet again. Over that period of time, we've increased our earned returns. So I don't see this profile of incremental CapEx providing challenges from a regulatory lag standpoint in terms of achieving our guidance.

Shar: Hi, good morning, it's actually comparable here for Shar.

Chris: Over the long term, we continue to expect to grow non-GAAP EPS at the mid to high end of the 6% to 8% range annually through 2030.

Speaker Change: Thanks for taking the questions.

Speaker Change: Starting off on the Capex update as you are.

Speaker Change: Including the $1 billion of upside today, how should we be thinking about the cadence of updates as we get the <unk> roll forward.

Chris: We look forward to the remainder of 2025 and executing for the benefit of all stakeholders and with that.

Speaker Change: Paid more incremental updates in the 2030 plan or is there a more comprehensive update how does the higher run rate implied for the upside.

Jason: I'll now turn the call back over to Jason.

Jason Wells: Now, that being said. just because we have a historical test year. We have some regulatory lag in our business that we will constantly look at regulatory and legislative solutions to help chip away at. We think it's in our customer's best interest. to fund incremental CapEx. from the ongoing cash that we generate in the business. And so there will be a continued focus on reducing regulatory lag for the benefit of our customers and our investors. But I just want to be 100% clear, we do not see a challenge with regulatory lag for achieving the guidance that we've outlined.

Jason: Thank you Chris we are excited about the opportunities in front of us through the end of the decade and beyond and we look forward to sharing an updated 10 year plan in the third quarter of this year.

Speaker Change: Forward the plant.

Speaker Change: Yes, good morning, Concertina, it's Jason here.

Speaker Change: Sure.

Speaker Change: Maybe two key points and then I'll expand first we do see.

Speaker Change: Thank you, Jason with that I'll now turn it over to Q&A operator.

Jason: At this time, we will begin taking questions.

Speaker Change: Significant capex tail wins across our business in particular in Houston electric, but also as I alluded to in our Texas gas business as well.

Jason: To ask a question. Please press star one one are you touched on key pad.

Jason: Any request that when asking a question colors pick up their telephone handsets. Thank you.

Speaker Change: Second and to your point on timing.

Speaker Change: We have a history of updating kind of our capex guidance as we get incremental data points.

Shar: Our first question is from Shar <unk> with Guggenheim partners.

Speaker Change: We're going to continue to use that that approach so.

Shar: Hi, good morning, it's actually comparable here for Shar.

Shar: Thanks for taking the questions.

Speaker Change: This quarter, we've updated our capex guidance for the $1 billion really reflecting the nearly a dozen projects that we'll be filing with the archive regional planning group.

Shar: Starting off on the Capex update.

Constantine Lednev: Excellent. Appreciate that.

Shar: Including the $1 billion of upside today, how should we be thinking about the cadence of updates as we get the <unk> roll forward.

Nick Campanella: Our next question comes from Nick Campanella of Woods Barclays. Hey, good morning. Thanks for taking the question.

Shar: More incremental updates in the 2030 plan or is there a more comprehensive update how does the higher run rate implied for the upside.

Speaker Change: We have additional projects that we will file later this summer.

Speaker Change: So there'll be a time.

Speaker Change: Whether it's the second quarter call, our third quarter call, we'll have EBIT incremental.

Nick Campanella: Good morning, Nick. Hey. Good to see the momentum on the capital expenditures. Can you maybe just kind of talk about where your head is at on financing these new opportunities and just recognize that you kind of trade at a more healthy multiple? So, is equity kind of your preferred route here? Should we be looking towards asset sales? Just what's kind of the pecking order? And if you are looking at asset sales, maybe kind of talk about what's core versus not. Thanks.

Shar: The plant.

Speaker Change: Updates with respect to electric transmission and then we will also provide as we've discussed a much more comprehensive update in the third quarter really rolling forward that 10 year plan.

Shar: Yes, good morning, Concertina, it's Jason here.

Shar: Maybe two key points and then I'll expand first we do see.

Shar: Significant capex tail wins across our business in particular in Houston electric, but also as I alluded to in our Texas gas business as well.

Speaker Change: But last time, we initiated a 10 year plan, we initiated a $40 billion and today, it's at $48 5 billion.

Shar: Second and to your point on timing.

Speaker Change: The Capex tailwind remains significant and I'd expect us just to be at a periodic rhythm of updating as we get additional regulatory data points.

Christopher Foster: Sure. Good morning, Nick. I think it's a few key factors to think about. Let me first just remind you that even with the CapEx momentum, we were clear this morning that there is no incremental 2025 equity need. So that's kind of the place to start. Given where we are trading, we've also been really focused on being proactive there, right? So you also saw us move forward with the forward equity approach to de-risk portion of 2026. Beyond that, as we look into the electric transmission opportunities that Jason referenced, those will be probably more back-weighted going forward.

Shar: We have a history of updating kind of our capex guidance as we get incremental data points.

We're going to continue to use that that approach so.

Speaker Change: Great Thanks for that.

Shar: This quarter, we've updated the capex guidance for the $1 billion really reflecting the nearly a dozen projects that we'll be filing with the ERCOT regional planning group.

Speaker Change: We've seen some regulatory lag issues with tears in place.

Speaker Change: Growth in the inflection in Capex.

Speaker Change: Adding the Capex and rolling forward do you see any rate construct being adequate to limit the ROE issue given you've just come out of the rate case or would you look for any improvements in contract on a go forward basis.

Shar: We have additional projects that we will file later this summer.

Shar: So there'll be a time, whether its the second quarter call our third quarter call, we'll have EBIT incremental.

Speaker Change: Yes, let me be clear I don't see any challenge with regulatory lag to achieve the guidance that we've initiated.

Shar: Updates with respect to electric transmission and then.

Christopher Foster: And so, as a result, we'll consistently look and have always, in recent years, looked at the way to most efficiently finance that work going forward. We've previously provided the— The growth-related CapEx rule of thumb of 50% debt, 50% equity to fund as we go forward. And at the same time, just given where we are, I'll say, macroeconomically, there's certainly been increased interest in, in particular, gas LDCs, just kind of broadly in the country. I think as a result, that's increased inbounds for us as well. And so you can imagine, we're going to consistently be open to the most efficient way to finance our work.

Shar: We'll also provide as we've discussed a much more comprehensive update in the third quarter really rolling forward that 10 year plan.

Speaker Change: I think our track record.

Speaker Change: Helps prove that when we initiated our.

Shar: But last time, we initiated a 10 year plan.

Speaker Change: The original 10 year plan, we doubled.

Shar: Initiated at $40 billion and today, it's at $48 5 billion.

Speaker Change: Capex ex Houston electric we've doubled it again.

Speaker Change: And we've also nearly doubled it yet again.

Shar: Capex tailwind remains significant and I'd expect us just to be in a periodic rhythm of updating as we get additional regulatory data points.

Speaker Change: Over that period of time, we've increased our earned returns.

Speaker Change: So I don't see this profile of incremental capex, providing.

Shar: Great Thanks for that.

Speaker Change: Challenges from a regulatory lag standpoint in terms of achieving our guidance now that being said.

Shar: We've seen some regulatory lag issues with tears in place.

Christopher Foster: And finally, I think the other thing to keep in mind is now that we're working our way through really completing a lot of these rate cases, as you look at the net benefits, there's both the earnings-related tailwinds that Jason's referenced before, but it is also the case that we've been able to improve our operating cash flow profile. So we're seeing really when you isolate just all those benefits of completing those cases that really credit to the team to getting us to this point, we probably are looking on the order of roughly 5% operating cash flow improvement.

Shar: Growth in the inflection in Capex.

Speaker Change: Just because we have a historical test year.

Shar: Adding the Capex and rolling forward do you see any.

Shar: <unk> construct.

Speaker Change: We have some regulatory lag in our business that we will constantly look at regulatory and legislative solutions to help chip away at we think it's in our customers' best interest.

Shar: Adequate to limit the ROE issue, given you've just come out of the rate case or would you look for any improvement in contract on a go forward basis.

Shar: Yeah, let me be clear I don't see any challenge with regulatory lag to achieve the guidance that we've initiated.

Speaker Change: To fund incremental Capex.

Speaker Change: From the ongoing cash that we generate in the business.

Shar: And I think our track record helps.

Helps prove that when we initiated our.

Speaker Change: And so there will be a continued focus on reducing regulatory lag for the benefit of our customers and our investors.

Shar: Original 10 year plan, we doubled.

Christopher Foster: So hopefully that gives you the color for kind of how we're thinking about the plan going forward. Thanks, thanks for the question. You know, obviously, we're going to keep you interested in wanting to attend as we as we update the plan later this year.

Shar: Capex ex Houston electric we've doubled it again.

Speaker Change: I just wanted to be 100% clear, we do not see.

Shar: And we've also nearly doubled it yet again.

Speaker Change: A challenge with regulatory lag for achieving the guidance that we've outlined.

Shar: Over that period of time, we've increased our returns.

Speaker Change: Excellent I appreciate that.

Shar: So I don't see this profile of incremental capex, providing.

Speaker Change: Congratulation.

Speaker Change: Our next question comes from Nick Kevin Miller of.

Shar: <unk> from a regulatory lag standpoint in terms of achieving our guidance now that being said.

Speaker Change: With Barclays.

Speaker Change: Hey, good morning, Thanks for taking my question.

Shar: Just because we have a historical test year.

Speaker Change: Morning, Ed.

Speaker Change: Hey.

Speaker Change: Good to see the momentum on the capital expenditures can you maybe just kind of talk about where your head is out on financing these new opportunities and just recognize that you've kind of trained in a more healthy multiple.

Shar: We have some regulatory lag in our business that we will constantly look at regulatory and legislative solutions to help chip away at we think it's in our customers' best interest.

Jason Wells: But look, we've got a incredible foundation. for our continued earnings trajectory, right? You know, with the CapEx guidance that we've announced today, it's a 10 plus percent rate-based figure through the end of the decade. That's an incredible foundation. This is... Capital spend that our customers are asking for, right? Capital spend that's driven by hardening our system, improving the resiliency, capital spend that's associated with the incredible growth of the economy here. But growing rate base north of 10% through the decade is a really strong foundation for our earnings guidance. I'd say philosophically, the other thing to think about is we have a track record of delivering at or above the range that we have guided to.

Speaker Change: So it's equity kind of your preferred route here should we be looking towards asset sales just what's kind of the pecking order and if you are looking at asset sales, maybe kind of talk about what's core versus not.

Shar: To fund incremental Capex.

Shar: From the ongoing cash that we generate in the business.

Shar: And so there will be a continued focus on reducing regulatory lag for the benefit of our customers and our investors.

Speaker Change: Sure. Good morning, Nick I think it's a few key factors to think about let me first remind you that even with the capex momentum.

Shar: I just wanted to be 100% clear, we do not see.

Speaker Change: We're clear this morning that there is no incremental 2025 equity need best kind of place to start.

Shar: A challenge with regulatory lag for achieving the guidance that we've outlined.

Speaker Change: Given where we are trading we've also been really focused on being proactive there right. So you also saw us.

Shar: Excellent I appreciate that.

Shar: Congratulations.

Shar: Our next question comes from Nick Kevin Miller.

Speaker Change: Move forward with the forward equity approach to de risk a portion of 2026.

Shar: With Barclays.

Speaker Change: Beyond that as we look into the electric transmission opportunities that Jason referenced those will be probably more back weighted going forward and so as a result, we'll consistently look and have always in recent years look at the way to most efficiently finance that work going forward.

Speaker Change: Hey, good morning, Thanks for taking my question good morning.

Shar: Hey.

Shar: Good to see the momentum on the capital expenditures can you maybe just kind of talk about where your head is that on financing these new opportunities and just recognize that you've kind of trade at a more healthy multiple.

Jason Wells: I think the most important thing is the absolute confidence in achieving the guidance we put out there and to the extent that we can over delivering for all of our stakeholders. So we'll continue to keep that philosophy in mind as I said, a strong base, but certainly more to come as we roll out the new plan later this year. All right, thanks a lot.

Speaker Change: Previously provided.

Shar: So it's equity kind of your preferred route here should we be looking towards asset sales, just what's kind of the pecking order and if.

Speaker Change: The growth related Capex rule of thumb of 50% debt, 50% equity to fund as we go forward.

Speaker Change: And at the same time, just given where we are I'll say the macro economically there has certainly been increased interest and in particular gas LDC just kind of broadly in the country.

Shar: You are looking at asset sales, maybe kind of talk about what's core versus not.

Speaker Change: Sure. Good morning, Nick I think it's a few key factors to think about let me first remind you that even with the capex momentum.

Durgesh Chopra: Our next question is from Durgesh Chopra with Evercore ISI. Hey, good morning team. Solid quarter here, congrats on that.

Speaker Change: As a result, that's increased inbound.

Shar: We're clear this morning that there is no incremental 2025 equity need.

Speaker Change: For us as well.

Speaker Change: And so you can imagine we're going to consistently be open to the most efficient way to finance our work and finally I think the other thing to keep in mind is now that we're working our way through really completing a lot of these rate cases as you look at the net benefit there is both the earnings related tailwind that Jason referenced before.

Shar: To start.

Shar: Given where we are trading we've also been really focused on being proactive there right. So you also saw us.

Durgesh Chopra: Hey, just wanted to start off with, Chris, can you help us reconcile the CapEx is a billion dollars higher, the equity just increased modestly, 100 million or so there. Just, you know, it's not your 50% equity with the CapEx increase, so what's driving that? Why is it such a modest equity increase versus a large capital increase? Sure thing. Good morning, Durgesh. I think what you're referencing is potentially what we had done in the last quarter is we had increased a capex at that time, roughly $500 million. And associated with that, there actually was a $250 million equity increase to the plan.

Shar: Move forward with the forward equity approach to de risk a portion of 2026.

Shar: Beyond that as we look into the electric transmission opportunities that Jason referenced those will be probably more back weighted going forward and so as a result, we'll consistently look and have always in recent years look at the way to most efficiently finance that work going forward.

Speaker Change: But it is also the case that we've been able to improve our operating cash flow profile. So we're seeing really when you isolate just all those benefits of completing those cases that really credit to the team to getting us to this point, we probably are looking on the order of roughly 5% operating cash flow improvement. So hopefully that gives you the color for kind of how we're thinking about the plan going.

Shar: Previously provided.

Shar: The growth related Capex rule of thumb of 50% debt, 50% equity to fund as we go forward.

Shar: And at the same time, just given where we are I'll say the macro economically there has certainly been increased interest and in particular gas LDC just kind of broadly in the country.

Speaker Change: Forward.

Speaker Change: Hey, that's super helpful.

Speaker Change: U as we kind of look towards the third quarter, when we get the kind of full plan you've been doing this 6% to 8% long term earnings growth outlook, you've been doing closer to 8% plus and just what's your kind of philosophy and how thats changing.

Christopher Foster: So going forward, you should think about it as the same approach, 50% debt, 50% equity as we go. And again, I think it's important to also recognize the timing, right? So sizing and timing.

Shar: As a result, that's increased inbound.

Shar: For us as well.

Shar: And so you can imagine we're going to consistently be open to the most efficient way to finance our work and finally I think the other thing to keep in mind is new.

Christopher Foster: Timing, again, is largely driven by both the fact that we're in the early planning stages of the electric transmission projects reference, but also that we're going to be stepping into over time the system resiliency plan work, which really just starts to pick up in 26 and then more heavily gets work resourced and we'll need more capex in 27 and 28. That's helpful, Chris. Maybe I wasn't clear.

Speaker Change: Can you just give us an idea if you are I guess reassessing that CAGR as we get into the third quarter and where that can go. Thanks.

Shar: Now that we're working our way through really completing a lot of these rate cases as you look at the net benefit there is both the earnings related tailwind that Jason referenced before but it is also the case that we've been able to improve our operating cash flow profile. So we're seeing really when you isolate just all of those benefits of completing those cases.

Speaker Change: Thanks, Thanks for the question, obviously, when it keep you interested and wanting to attend.

Speaker Change: As we update the plan later this year, but look we've got a incredible foundation.

Speaker Change: For our continued earnings trajectory right with the Capex guidance that we've announced today.

Christopher Foster: I was just kind of comparing Q4 versus this CapEx update of a billion. And then the equity and equity linked securities went up from 265 to 275. Maybe I'm not thinking about this the right way. I would have thought the equity increase would be much larger than just 100 million. No, I understand. And we can follow up with you, Durgesh, on the explicit materials. It'd be a, it was a $500 million increase in an associated $250 million in equity as well.

Shar: That's really a credit to the team to getting us to this point, we probably are looking at on the order of roughly 5% operating cash flow improvement. So hopefully that gives you the color for kind of how we're thinking about the plan going forward.

Speaker Change: <unk> plus percent rate base CAGR through the end of the decade that has an incredible foundation. This is Cal.

Speaker Change: Capital spend that our customers are asking for rate capital spend thats driven by.

Shar: Hey, that's super helpful and.

Speaker Change: Hardening our system, improving the resiliency capital spend that's associated with the incredible growth of the economy here, but growing rate base north of 10% of the decade is a really strong foundation for our earnings guidance I'd say philosophically. The other thing to think about as we.

Shar: You know as we kind of look towards the third quarter. When we get the kind of full plan you've been doing this 6% to 8% long term earnings growth outlook, you've been doing closer to 8% plus.

Durgesh Chopra: Okay, I will follow up.

Durgesh Chopra: And just on the $3 billion in additional capital opportunities, I just want to be clear that on top of the billion today, that's one part of the question. And second, is that $3 billion all tied to the 765 KV, i.e. there's additional opportunities on top of that $3 billion? Good morning, Durgesh. It's Jason here. Yeah, there's at least 3 billion of capex upside. I'd say that 2 billion of that relates to what I would consider to be almost regular way, electric transmission spend to continue to harden and the system and support growth. I think about a billion relates to sort of the gas transmission opportunity that I discussed.

Shar: Just what's your kind of philosophy and how that's changing.

Shar: Can you just give us an idea if you are I guess reassessing the CAGR as we get into the third quarter and where that can go.

Speaker Change: Have a track record of deliver.

Speaker Change: Delivering.

Speaker Change: At or above the range that we.

Shar: Thanks. Thanks for the question, obviously, we're going to keep you interested and wanting to attend.

Speaker Change: That we have guided to I think the most important thing is the absolute confidence in achieving the guidance we've put out there.

Shar: As we update the plant later this year, but look we've got a incredible foundation.

Speaker Change: The extent that we can over delivering for all of our stakeholders, we will continue to keep that.

Shar: For our continued earnings trajectory right with the Capex guidance that we've announced today to 10 plus percent rate base CAGR through the end of the decade, that's an incredible.

Speaker Change: Our philosophy in mind as I said, a strong base, but certainly more to come as we rollout the new plan later this year.

Shar: Foundation this is <unk>.

Speaker Change: Alright, Thanks, a lot.

Shar: Capital spend that our customers are asking for rate capital spend thats driven by.

Speaker Change: Our next question is from <unk> Chopra with Evercore ISI.

Shar: Hardening our system, improving the resiliency capital spend associated with the incredible growth of the economy here, but growing rate base north of 10% through the decade is a really strong foundation for our earnings guidance I'd say philosophically. The other thing to think about as we.

Unidentified Chopra: Hey, good morning team solid quarter congrats on that.

Jason Wells: I wouldn't necessarily say those figures or amounts. are impacted by the 760 kilovolt Standard. The electric transmission amounts could be significantly more than that to the extent that the state adopts that 765 kV standard. So, again, maybe the way I'd look at it is that there's probably at least, at least three billion of incremental capex upside beyond the billion that we folded in today.

Speaker Change: Just wanted to start off with Chris.

Chris can you help us reconcile the Capex is.

Speaker Change: <unk> is a $1 billion higher the equity.

Speaker Change: Just increase modestly.

Shar: Have a track record of.

Speaker Change: $100 million or so there.

Shar: Delivering.

Speaker Change: It's not your yes.

Shar: At or above the range that we.

Speaker Change: 60% equity with the Capex increase of what's driving that why is it such that modestly.

Shar: We have guided to I think the most important thing is the absolute confidence in achieving the guidance we've put out there.

Speaker Change: Modest equity inquiries were still a large capital increase.

Sure. Thank you morning, guys I think what you're referencing is potentially what we have done in the last quarter. As we had increased capex at that time, roughly $500 million and associated with that there actually was a $250 million.

Shar: The extent that we can over delivering for all of our stakeholders, we will continue to keep that.

Durgesh Chopra: And it could be substantially more than that through the remainder of the decade. Got it. Very clear. Thank you, guys.

Shar: Our philosophy in mind as I said, a strong base, but certainly more to come as we rollout the new plan later this year.

Speaker Change: Equity increase to the plan. So going forward you should think about it is the same same approach 50% debt 50.

Steve Fleishman: Our next question is from Steve Fleishman with Wolf Research. Yeah, hi. My first question was mainly related to what I think you just answered on the seems like we're going to get this 765 KB decision pretty soon.

Shar: Alright, Thanks, a lot.

Speaker Change: Our next question is from <unk> Chopra with Evercore ISI.

Speaker Change: The percent of equity as we go and again I think it's important to also realize that the timing right. The sizing and timing timing again is largely driven by both the fact that we're in the early planning stages of the electric transmission projects referenced but also that we're going to be stepping into overtime the system resiliency plan.

Speaker Change: Hey, good morning team solid quarter congrats on that.

Speaker Change: Just wanted to start off with Chris.

Steve Fleishman: just maybe you could just frame The options. is it just 765 or? or lower and just, you know, scenario, you know, scenarios for your capital plan, if anything incremental than what you just said. Thanks, Steve, and good morning. Yeah, we could get the policy standard on on the voltage levels as early as today at the PECT meeting. I think there's... The state has expressed a desire to move to more of a 765 KV standard, but hopefully we'll get further clarity today. I think that that policy. will be important for us. We have a couple of our substations that would be impacted by that 765 KV build-out.

Chris can you help us reconcile the Capex is.

Speaker Change: It's a $1 billion higher the equity.

Speaker Change: Which really just starts to pick up in 'twenty six and then more heavily gets worked resource and will need more capex in 2007 and 2008.

Speaker Change: Just increased modestly.

Speaker Change: $100 million or so they're just.

Speaker Change: It's not your 50.

Speaker Change: <unk>, 50% equity with the Capex increase of what's driving that why is it such that modestly.

Speaker Change: That's helpful. Chris maybe I wasn't clear I was just kind of comparing Q4 versus this capex update of $1 billion.

Speaker Change: Modest equity inquiries, we're still large capital increase.

Speaker Change: Sure. Thank you morning, guys I think what youre referencing.

Speaker Change: And then the equity and equity linked Securities went up from $2 65 to 75, maybe I'm not thinking about this the right way I would've thought the <unk>.

Speaker Change: Currency is potentially what we have done in the last quarters, we had increased capex at that time roughly $500 million.

Speaker Change: QWERTY inquiries would be much larger than just $100 million.

Speaker Change: And associated with that there actually was a $250 million.

Speaker Change: No I understand and we can follow up with Peter Gershon the explicit materials.

Speaker Change: Equity increase to the plan. So going forward you should think about it is the same same approach, 50% debt, 50% equity as we go and again I think it's important to also realize that the timing right sizing and timing timing again is largely driven by both the fact that we are in the early planning stages of the electric transmission projects reference.

Speaker Change: It was a 500 million increase and the associated $250 million in equity as well.

Speaker Change: Okay, Alright, I will follow up and then just on the $3 billion in additional capital opportunities I just want to be clear that's on top of the $1 billion.

Jason Wells: One of those pathways would connect the northern part of our system to the southern part of our system, effectively cutting right through the greater Houston area. That would be pretty complicated construction and would significantly increase the cost. And so that's why there's a pretty wide range. of the potential cost for the electric transmission to build out. Again, we folded in a billion today. I think it's at least two billion, and it could be substantially more than that if we move to that seven sixty five KB standard and build to that standard connecting the northern part of our region to the southern part of our region.

Speaker Change: But also that we're going to be stepping into overtime the system resiliency plan.

Speaker Change: Today, that's one part of the question and second is that $3 billion all tied to the 765 JV I E. There is additional opportunities on top of that $3 billion.

Speaker Change: Which really just starts to pick up in 2006, and then more heavily gets worked resource and will need more capex in 'twenty seven and 'twenty eight.

Speaker Change: Hey, good morning.

Jason Wealth: It's Jason here, Yes, there is at least $3 billion of Capex upside I would say that.

Speaker Change: That's helpful. Chris maybe I wasn't clear I was just kind of comparing Q4 versus this capex update of $1 billion.

Jason Wealth: $2 billion of that relates to what I would consider to be almost regular way.

Speaker Change: And then the equity and equity linked Securities went up from 265 to <unk> 75, maybe I'm not thinking about this the right way I would've thought the equity increase would be much larger than just the $100 million.

Jason Wealth: Electric transmission spend to continue to harden.

Jason Wealth: The system and support growth I think about 1 billion relates to the gas transmission opportunity that I discussed.

Speaker Change: No I understand and we can follow up with Peter Gershon the explicit materials.

Jason Wells: Outside of that, you know, there are other projects as we continue to see. significant renewable growth on the system. and making sure that we. We have kind of a stable grid is important. We are looking at high voltage DC line, which could help provide voltage support on the system as well as maybe more efficiently move those electrons around the greater Houston territory. That would also create an upward bias on the CapEx guidance. I think there's really, at the end of the day, a significant amount of CapEx upside related to electric transmission. And the final point I'll make is we've been talking about the incremental upside for the remainder of the decade.

Speaker Change: Was a 500 million increase and the associated $250 million in equity as well.

Jason Wealth: I wouldn't necessarily say those figures are amounts.

Jason Wealth: Are impacted by the 760 <unk>.

Speaker Change: Okay, Alright, I will follow up and then just.

Speaker Change: The 3 billion in additional capital opportunities I, just want to be clear that's on top of the $1 billion.

Jason Wealth: Standard.

Jason Wealth: The electric transmission amounts could be significantly more than that to this to the extent that that.

Speaker Change: Today, that's one part of the question and second is that $3 billion all tied to the 765 JV I E. There is additional opportunities on top of that $3 billion.

Jason Wealth: State adopts that 755 kv standard.

Jason Wealth: So again, maybe the way I'd look at it is that Theres, probably at least at least 3 billion of incremental capex upside beyond the 1 billion that we folded in today and it could be substantially more than that through the remainder of the decade.

Speaker Change: Hey, good morning.

Speaker Change: It's Jason here, Yes, there is at least $3 billion of Capex upside I would say that.

Speaker Change: $2 billion of that relates to what I would consider to be almost regular way.

Jason Wealth: Got it very clear thank you guys.

Speaker Change: Our next question is from Steve Fleishman with Wolfe Research.

Jason Wells: You know, as I alluded to the call, we're not seeing. growth slowdown in the Greater Houston region. If anything, it's accelerating. And so I think the electric transmission buildout will only accelerate as we get into the next decade. Today we're able to move fairly quickly with these interconnection requests because we have a little bit of incremental capacity on our electric system. You know, as we continue to connect all this new load, we are utilizing existing capacity, and it's going to require incremental CapEx to build out that transmission capacity well into the next decade.

Speaker Change: Electric transmission spend to continue to harden.

Speaker Change: Our system and support growth I think about 1 billion relates to sort of the gas transmission opportunity that I discussed.

Speaker Change: Yes, hi.

Speaker Change: My first question was mainly related to what I think you just answered on the it seems like we're going to get to 765 kv decision pretty soon.

Speaker Change: I wouldn't necessarily say those figures are amounts.

Speaker Change: Are impacted by the 760 <unk>.

Speaker Change: Just.

Speaker Change: Maybe you could just frame.

Speaker Change: The options.

Speaker Change: Standard.

Speaker Change: Is it just 765 or.

Speaker Change: The electric transmission amounts could be significantly more than that to this to the extent that that the state dots that 755 kv standard.

Speaker Change: We're lower than just generic scenarios for your capital plan, if anything incremental to what you just said.

Jason Wells: So think about this is there's plenty of CapEx outside, whether it's the 765 kV standard, high voltage DC lines, different paths. through the remainder of the decade. And then as we get into the 2030s, electric transmission will continue to be a significant tailwind for the company. Great, thanks. And one other question, I know your growth is pretty... kind of diversified. But in the last few calls you've given. some data center backlog numbers. Do you have any updated data center backlog numbers? Yeah, you know, the seven gigawatt increase in our interconnection queue that I mentioned, so you know, on the on the fourth quarter call.

Speaker Change: Thanks, Steve and good morning.

Speaker Change: So again, maybe the way I'd look at it is that Theres, probably at least at least 3 billion of incremental capex upside beyond 1 billion that we fold it in today.

Speaker Change: Yes, we could get the.

Speaker Change: Policy standard on the voltage levels as early as today PCT meeting.

Speaker Change: And it could be substantially more than that through the remainder of the decade.

Speaker Change: I think there is.

Speaker Change: Expressed.

Speaker Change: The state has expressed a desire to move to more of a 765 JV standard, but hopefully we'll get further clarity today.

Speaker Change: Got it very clear thank you guys.

Speaker Change: Our next question is from Steve Fleishman with Wolfe Research.

Speaker Change: I think that that policy.

Steve Fleishman: Yes, hi.

Speaker Change: We will be important for us we have a couple of our substations that.

Steve Fleishman: My first question was mainly related to what I think you just answered on the it.

Steve Fleishman: It seems like we're going to get just 765 kv decision pretty soon.

Speaker Change: <unk> would be impacted by that 765 kv build out one of those pathways.

Steve Fleishman: Just.

Steve Fleishman: Maybe you could just frame.

Speaker Change: The northern part of our system to the southern part of our system effectively cutting right through greater.

Steve Fleishman: The options.

Jason Wells: A little over two months ago, we said that we had a 40 gigawatt interconnection to now it's 47 gigawatts. Six of that is related to incremental data center demand. Our data center queue is now roughly 20 gigs. I think one of the important drivers, Steve, to the diversified point of the economy that you've mentioned is we're starting to grow. a larger ecosystem here in the Greater Houston area. We've had some really high profile, high tech manufacturing announcements with Foxconn, Apple, Nvidia. all looking at rapidly expanding their production of their server racks, everything but effectively the chips.

Steve Fleishman: Is it just 765 or.

Steve Fleishman: Lower than just severe scenarios through your capital plan, if anything incremental to what you just said.

Speaker Change: Greater Houston area.

Speaker Change: That would be pretty complicated.

Speaker Change: Construction and would significantly increase the cost and so thats why theres a pretty wide.

Speaker Change: Thanks, Steve and good morning.

Steve Fleishman: Yes, we could get the.

Speaker Change: Range.

Steve Fleishman: Policy standard on the voltage levels as early as today PCT meeting.

Speaker Change: The potential cost for the electric transmission build out again, we've folded in 1 billion today I think it's at least $2 billion and it could be substantially more than that if we move to that 755 kv standard and built to that standard connecting the northern part of our region to the southern part of our region outside of that there are other projects as we continue to see.

Steve Fleishman: I think there is.

Steve Fleishman: Expressed.

Steve Fleishman: The state has expressed a desire to move to more of a 765 JV standard, but hopefully we'll get further clarity today.

Steve Fleishman: I think that that policy.

Speaker Change: Significant.

Speaker Change: Renewable growth on this system.

Steve Fleishman: <unk> will be important for us we have a couple of our substations that.

Speaker Change: We're making sure that we are.

Speaker Change: We have kind of a stable grid is important we are looking at high voltage DC line, which could help provide voltage support on the system as well as maybe more efficiently move.

Steve Fleishman: Would be impacted by that 765 kv build out.

Steve Fleishman: And I think that that significant investment in that kind of data center ecosystem is also continuing to attract data center demand. And so it has really been an explosive level of growth for us, really starting back to last summer. Great, thank you.

Steve Fleishman: One of those pathways would connect the northern part of our system to the southern part of our system effectively cutting right through greater the greater Houston area.

Speaker Change: Those electrons around the greater Houston territory that would also.

Steve Fleishman: That would be pretty complicated construction and with significantly increased the cost and so thats why theres a pretty wide.

Speaker Change: Create an upward bias on the Capex guidance.

Speaker Change: I think there is it really at the end of the day.

Speaker Change: A significant amount of capex upside related to electric transmission and the final point I'll make is we have been.

Steve Fleishman: Range.

Julien Dumoulin-Smith: Our next question comes from Julien Dumoulin-Smith of Jeffries. Hey, good morning, team. Thank you guys very much. Nicely done again. Maybe just to get ahead a little bit of our third quarter conversation here.

Steve Fleishman: The potential cost for the electric transmission build out again.

Speaker Change: Talking about the incremental upside through the remainder of the decade as I alluded to in the call we're not seeing.

Steve Fleishman: And a 1 billion today I think it's at least $2 billion and it could be substantially more than that if we move to that 755 kv standard and built to that standard connecting the northern part of our region to the southern part of our region outside of that there are other projects as we continue to see.

Speaker Change: Growth slowdown in the greater Houston region, if anything it's accelerating.

Speaker Change: And so I think the electric transmission build out will only accelerate as we get into the next decade.

Julien Dumoulin-Smith: When you think about the $3 billion in additional opportunities, can you just clarify a little bit of the various pieces? I know you said, for instance, there was $1 billion of gas transmission. But then in the comments, you talked about this high-pressure distribution network that seemingly could be, I think you insinuated maybe a little bit more than that as you try to replicate what you've done in Minnesota. Can you elaborate a little bit on what the various pieces would be to the plus side on the three in terms of whether the 765 and distribution?

Speaker Change: We were able to move fairly quickly with these interconnection request, because we have a little bit of incremental capacity on our electric system.

Steve Fleishman: Significant.

Steve Fleishman: Renewable growth on the system.

Steve Fleishman: And then making sure that we are.

Speaker Change: As we continue to connect all of this new load.

Steve Fleishman: We have kind of a stable grid is important we are looking at high voltage DC line, which could help provide voltage support on the system as well as maybe more efficiently move.

Speaker Change: We are utilizing existing capacity and it's going to require incremental capex to build out that transmission capacity well into the next decade. So think about this is there's plenty of capex upside whether it's the 765 kv standard high voltage DC lines.

Steve Fleishman: Those electrons around the greater Houston territory that would also.

Steve Fleishman: Create an upward bias on the Capex guidance.

Julien Dumoulin-Smith: And also clarify a little bit, I know we've got a five-year plan and now increasingly focused on a 10-year plan. Can you clarify what would be in the five versus 10? It seems as if a lot of these items may be very well back-and-weighted, not just within the five-year, but even back-and-weighted within the 10 versus the five-year plan.

Speaker Change: Different paths through the remainder of the decade, and then as we get into the 2000 Thirty's electric transmission will continue to be a significant tailwind for the company.

Steve Fleishman: I think there is it really at the end of the day.

Steve Fleishman: Significant amount of Capex upside related to electric transmission and the final point I'll make is we've been talking about the incremental upside through the remainder of the decade as I alluded to in the call we're not seeing.

Speaker Change: Great. Thanks, and one other question I know your growth is pretty.

Steve Fleishman: Growth slowdown in the greater Houston region, if anything it's accelerating and.

Jason Wells: Hey, good morning, Julie. There's a lot to unpack there. I'll, I'll take a stab at it. So in terms of the $3 billion of upside, let me kind of help walk that. So on the fourth quarter call. in in q&a I talked about that we saw at least three billion of incremental electric transmission, CapEx upside opportunity. This quarter, we have folded into our CapEx guidance to the remainder of the decade, one billion of that three. So there's 2 billion of, at a minimum, CapEx upside related to electric transmission. As I've mentioned in some of the other.

Speaker Change: Diversified but.

Speaker Change: Last few calls you've given.

Steve Fleishman: So I think the electric transmission build out will only accelerate as we get into the next decade.

Speaker Change: Some data center backlog numbers do you have any updated data center backlog numbers.

Steve Fleishman: Today, we are able to move fairly quickly with these interconnection request, because we have a little bit of incremental capacity on our electric system.

Speaker Change: Yes.

Speaker Change: Seven gigawatt increase in our interconnection queue.

Speaker Change: That I mentioned so.

Speaker Change: On the fourth quarter call.

Steve Fleishman: As we continue to connect all of this new load.

Speaker Change: Two months ago, we said that we had a 40 gigawatt interconnection queue now it's 47 gigawatts.

Steve Fleishman: We are utilizing existing capacity and it's going to require incremental capex to build out that transmission capacity well into the next decade. So think about this is there's plenty of capex upside whether it's the 765 kv standard high voltage DC lines.

Speaker Change: That is related to incremental data center demand or data center. Two is now roughly 20 gigs.

Speaker Change: I think one of the important drivers Steve to the diversified point of view of the economy that you've mentioned is we are starting to grow.

Steve Fleishman: Different paths through the remainder of the decade, and then as we get into the 2000 Thirty's electric transmission will continue to be a significant tailwind for the company.

Speaker Change: A larger ecosystem here in the greater Houston area, we've had some really high profile high Tech manufacturing announcements with Fox Con Apple <unk>.

Jason Wells: questions that we've received. It's at least 2 billion of incremental CapEx upside through the remainder of the decade, and it could be significantly more than that related or driven by the voltage standard policy decision here in the state of Texas, among other things. So again, at least 2 billion more incremental capex upside. related to electric transmission. I've also alluded to at least a billion dollars, and I'll use this term loosely, but we've said gas transmission, it could be a high pressure distribution network. It's effectively a ring around the greater Houston region so that we can move our gas efficiently.

Great. Thanks, and one other question I know your growth is pretty.

Steve Fleishman: Kind of diversified.

Steve Fleishman: In the last few calls you have given.

All looking at rapidly expanding.

Steve Fleishman: Some data center backlog numbers do you have any updated data center backlog numbers.

Speaker Change: Their production of their server racks, everything effectively the chips and I think that that.

Steve Fleishman: Yes.

Steve Fleishman: Seven gigawatt increase and our interconnection queue.

Speaker Change: Significant investment in that kind of data center ecosystem is also continuing to attract data center demand and so it has really been an explosive level of growth for us really starting back.

Steve Fleishman: That I mentioned so.

Steve Fleishman: On the fourth quarter call.

Steve Fleishman: Two months ago, we said that we had a 40 gigawatt interconnection queue now it's 47 gigawatts.

Steve Fleishman: That is related.

Steve Fleishman: Related to incremental data center demand or data center two is now roughly 20 gigs.

Speaker Change: Last summer.

Jason Wells: Gas that we already own for our customers from one side of our system to the other, we think that that will lower customer rates by reducing incremental transmission costs to move gas that's already owned. In some cases, that may be transmission pipe. In some cases, that may be a high pressure distribution. But at the end of the day, think about this as a large ring around the greater Houston region, similar to what we did in Minnesota, that will allow us to move gas that we already own. I think that that's right now about a billion dollars, and some of that will creep into the early 2030s.

Speaker Change: Great. Thank you.

Speaker Change: Our.

Speaker Change: Question comes from Julien Dumoulin Smith of Jefferies.

Steve Fleishman: I think one of the important drivers Steve to.

Steve Fleishman: Diversified point of view of the economy that you've mentioned as we're starting to grow.

Speaker Change: Sure.

Speaker Change: Hey, good morning team. Thank you guys very much nicely done and yet again.

Steve Fleishman: A larger ecosystem here in the greater Houston area, we've had some really high profile high Tech manufacturing announcements with Fox Con Apple <unk>.

Speaker Change: Maybe just to get ahead, a little bit of our.

Speaker Change: Our third quarter conversation here.

Speaker Change: When you think about the $3 billion in additional opportunities can you just clarify a little bit.

Speaker Change: These pieces I know you said for instance, there was a $1 billion of gas transmission, but then in the comments you talked about this high pressure distribution network.

Steve Fleishman: All looking at rapidly expanding.

Steve Fleishman: Their production of their server racks, everything effectively the chips and I think that that.

Speaker Change: Seemingly could be.

Jason Wells: Outside of those two opportunities. I'll highlight a couple other CapEx drivers to get to your point. I think that there is CapEx upside, particularly as we look at 29 and 30 related to system resiliency. If you recall, we were the first in the state to file under the new system resiliency plan standard last April. We pulled that filing down after Hurricane Beryl, and we refiled a plan that reflected a higher level of spend to more quickly harden our system from the 26 to 28 time period. What we have not done is updated our plan to harden our system in 29 and 30 and beyond, consistent with this goal of building and operating the most resilient coastal grid in the country.

Speaker Change: I think you had said you would maybe a little bit more than that.

Steve Fleishman: Our significant investment in that kind of data center ecosystem is also continuing to attract data center demand and so it has really been an explosive level of growth for us really starting back.

Speaker Change: You try to replicate what you've done in Minnesota can you elaborate a little bit on what the various pieces would be to the plus side on the three in.

Speaker Change: In terms of whether the 765 and distribution and also clarify a little bit I know, we've got a five year plan and now increasingly focused on a 10 year plan can you clarify what would be in the fiber. Since then it seems as if.

Steve Fleishman: Last summer.

Steve Fleishman: Great. Thank you.

Speaker Change: Our next question comes from Julien Dumoulin Smith of Jefferies.

Speaker Change: A lot of these items may be very well back end weighted.

Speaker Change: Within the five year, but even backend weighted within the 10 versus the five year plan.

Speaker Change: Hey, good morning team. Thank you guys very much nicely done and yet again.

Julien: Hey, good morning, Julien Theres, a lot to unpack there.

Speaker Change: Maybe just to get ahead, a little bit of our third quarter conversation here.

Speaker Change: I'll take a stab at it.

Speaker Change: So in terms of the $3 billion of upside let me, let me kind of help.

Speaker Change: Do you think about the $3 billion and additional opportunities can you just clarify a little bit of the various pieces. I know you said for instance, there was a $1 billion of gas transmission, but then in the comments you talked about this high pressure distribution network that seemingly could be I think you had said you had maybe a little bit more than that as you try to replicate what you've done in Minnesota.

Jason Wells: So I think that there is incremental CapEx on the back part of this decade and extending into the next related to system hardening. I think up in Indiana, we continue to see electric transmission upside potential associated with some of the MISO transmission projects that were announced last year. And we continue to see data center activity occurring up in in Indiana, from a development standpoint, that may provide incremental generation and transmission investment opportunity up there. Outside of those, you know, I, you know, we continue to see significant growth in the Texas market. That results in higher generation interconnection requests, continued growth in terms of connecting new New Residential Developments.

Speaker Change: Help walk that so on the fourth quarter call.

Speaker Change: <unk>.

Speaker Change: In Q&A I talked about that we saw at least.

Speaker Change: $3 billion of incremental electric transmission Capex upside opportunity. This quarter, we have folded into our capex guidance for the remainder of the decade 1 billion of that theory.

Speaker Change: Can you elaborate a little bit on what the various pieces would be to the <unk>.

Speaker Change: Plus side on the <unk> III.

Speaker Change: In terms of whether the 765 and distribution and also clarify a little bit I know, we've got a five year plan and now increasingly focus on a 10 year plan can you clarify what would be in the fiber. Since then it seems as if.

Speaker Change: So there is 2 billion of.

Speaker Change: At a minimum.

Speaker Change: Capex upside related to electric transmission as I've mentioned in some of the other.

Speaker Change: A lot of these items may be very well back end weighted.

Speaker Change: Questions that we've received.

Speaker Change: It's at least $2 billion of incremental capex upside through the remainder of the decade and it could be significantly more than that related.

Speaker Change: Within the five year, but even back end weighted within the 10 versus the five year plan.

Julien: Hey, good morning, Julien Theres, a lot to unpack there.

Speaker Change: Driven by.

Speaker Change: The voltage standard policy decision here in the state of Texas, among other things so again at least $2 billion more incremental capex upside.

Julien: I'll take a stab at it.

Julien: <unk>.

Julien: So in terms of the $3 billion of upside let me, let me kind of how.

Julien: Help walk that so on the fourth quarter call.

Speaker Change: Related to electric transmission I've also alluded to at least $1 billion.

Jason Wells: So the short of it is there are significant CapEx drivers, upside opportunities relative to the plan we've outlined. I have been trying most of this time to provide a sense of when we're talking about at least three billion of CapEx upside, that's through the remainder of this decade. We also then want to highlight the fact that we see some of these drivers extending well into the next, and we will provide more, we will obviously quantify what those long-term tailwinds will be as we roll forward in the next 10 years.

Julien: <unk>.

In Q&A I talked about that we saw at least.

Speaker Change: And I'll use this term loosely what looks at gas transmission it could be a high pressure distribution network effectively.

Julien: $3 billion of incremental electric transmission Capex upside opportunity. This quarter, we have folded into our capex guidance for the remainder of the decade 1 billion of that three.

Speaker Change: A ring around the greater Houston region. So that we can move our gas efficiently gas that we already own for our customers from one side of our system to the other we think that that will lower customer rates.

Julien: So there is 2 billion of.

Speaker Change: By reducing incremental transmission cost to move gas.

Julien: At a minimum.

Julien: Capex upside related to electric transmission as I mentioned in some of the other.

Speaker Change: In some cases that may be transmission pipe and some cases that may be high pressure distribution, but at the end of the day you think about this as a.

Julien: Questions that we've received.

Julien: It's at least $2 billion of incremental capex upside through the remainder of the decade and it could be significantly more than that related.

Speaker Change: Large ring around the greater Houston region, similar to what we did in Minnesota that will allow us to move move gas that we already own I think thats.

Jeremy Tonet: Our next question is from Jeremy Tonet with J.P. Morgan Securities. Hi, good morning. Good morning.

Julien: Driven by.

Julien: The voltage standard policy decision here in the state of Texas, among other things so again at least $2 billion more incremental capex upside.

Speaker Change: Right now about $1 billion and some of that will creep into the early 2000 <unk>.

Jeremy Tonet: Sounds like a lot of good stuff ahead of you here, but I just want to come to a couple of questions that we're receiving more today, I guess, you know, tariff concerns in recession risk. It seems like Texas is in a very good position, you know, regarding economic activity, but just wondering if you could give us your thoughts across your footprint, you know, if we do go into recession, how you think about that and any other color on tariff impacts in general would be helpful. Yeah, thanks for the question, Jeremy. Obviously, it's an incredibly dynamic environment.

Speaker Change: Side of those two opportunities.

Julien: Related to electric transmission I've also alluded to at least $1 billion and I'll use. This term loosely what we've said gas transmission it could be a high pressure distribution network it's effectively.

Speaker Change: I'll highlight a couple of other capex drivers to get to your point I think that there is capex upside, particularly as we look at 29% and 30 related to system resiliency, If you will.

Speaker Change: Recall, we were the first in the state to file under the new system Resiliency plan Stander last April we pulled that filing down after hurricane barrel and we re filed a plan that reflected a higher level of spend to more quickly harden our system for the 26 to 28.

Julien: A ring around the greater Houston region. So that we can move our gas efficiently gas that we already own for our customers from one side of our system to the other we think that that will lower customer rates.

Julien: By reducing incremental transmission cost to move gas.

And in some cases that may be transmission pipe and some cases that may be high pressure distribution, but at the end of the day you think about this as a.

Speaker Change: Time period, what we have not gone as updated our plan to harden our system and 29 30 and beyond.

Jeremy Tonet: you know, changing by the day.

Jason Wells: So, you know, I'll keep my comments more directional at this point. And what I would say is, you know, from a from a tariff cost exposure standpoint, I think we are on a relative basis, very low risk. We source most of our material and equipment domestically, the little bit that we Source, internationally, we have already begun to take steps. to convert that to domestic supply. So from a cost, from a tariff cost standpoint, I don't see that incremental cost pressure as significant across our portfolio.

Julien: Large ring around the greater Houston region, similar to what we did in Minnesota that will allow us to move move gas that we already own and I think thats.

Speaker Change: Distant with this goal of building and operating the most resilient grid in the country. So I think if there is incremental capex on the back part of this decade and extending into the next related to system hardening.

Julien: Right now about a $1 billion and some of that will creep into the early 2000 <unk>.

Speaker Change: Up in Indiana, we continue to see electric transmission upside potential associated with some of the MISO transmission projects that were announced last year.

Julien: Outside of those two opportunities.

Julien: I'll highlight a couple of other capex drivers to get to your point I think if there is capex upside, particularly as we look at $29 30 related to system resiliency, if you will.

Julien: Recall, we were the first in the state to file under the New system Resiliency plan standard last April we pulled that filing down after hurricane barrel and we re filed.

Speaker Change: And we continue to see datacenter activity occurring up in Indiana.

Speaker Change: The development standpoint that may provide incremental generation and transmission investment opportunity up there.

Jason Wells: You know, from a recession standpoint. I'll start with the Greater Houston region, you know, it has really over the last three decades really diversified the economy here. You know, even though we're known for the oil and gas capital of the world, energy now represents only about a third of the economy. And when we look back over the last two decades, because of the diversification, the economy has held up well under different recessionary pressure over the last two decades. If anything, I see potential tailwinds from the tariff activity. As I alluded to in our prepared remarks in Q&A, we have seen an increase in interconnection requests.

Julien: That reflected a higher level of spend to more quickly harden our system for the 2006 to 2008 time period, what we have not gone as updated our planned to harden our system and 29 30 and beyond consistent with this goal of building and operating the most resilient coastal grid.

Speaker Change: Outside of those.

Speaker Change: We continue to see significant growth in the Texas market.

Speaker Change: That results in higher generation interconnection requests continued growth.

Speaker Change: In terms of.

Speaker Change: Connecting new.

Julien: The country. So I think if there is incremental capex on the <unk>.

Speaker Change: Residential developments so the short of it is there are significant cap.

Julien: Part of this decade and extending into the next related to system hardening.

Speaker Change: Capex drivers upside opportunities relative to the plan we've outlined.

Julien: Up in Indiana, we continue to see electric transmission upside potential associated with some of the MISO transmission projects that were announced last year.

Speaker Change: I have been trying most of this time to provide a sense of that when.

Speaker Change: When we're talking about at least $3 billion of Capex upside that's through the remainder of this decade.

Julien: And we continue to see datacenter activity occurring up in Indiana.

Speaker Change: We also then want to highlight the fact that we see some of these drivers extending well into the next and we will provide more we will obviously quantify what those long term tailwind will be as we roll forward in the next 10 year plan.

Jason Wells: Some of that is driven by firms interested in onshore manufacturing capacity. And I think some of that is, you know, some of the notable. Announcements that I also referenced, whether it's NVIDIA and Foxconn and Apple, all talking about centralizing some of their high-tech manufacturing here in the Greater Houston region. So we may see it as a tailwind here.

Julien: On the development standpoint that may provide incremental generation and transmission investment opportunity up there.

Julien: Outside.

Julien: <unk> of those.

Julien: Continue to see significant growth in the Texas market.

Jeremy Tonet: Our next question is from Jeremy Tonet with Jpmorgan Securities.

Julien: That results in higher generation interconnection requests continued growth.

Jeremy Tonet: Hi, good morning.

Jason Wells: You know, the I would say as we look around our our portfolio, I also think that we're also relatively well situated from potential recessionary concerns. You know, the the focus on reshoring manufacturing capacity bodes well for our Indiana electric business. You know, there continues to be, you know, very supportive growth on the gas side in and around our entire Indiana gas footprint. We haven't seen any evidence of slowdown in Minnesota.

Julien: In terms of.

Speaker Change: It sounds like a lot of good stuff ahead of you here, but just wanted to.

Speaker Change: Good afternoon.

Speaker Change: Residential developments so the short of it is there are significant cash.

Speaker Change: Two a couple of questions that we're receiving more today I guess tariff concerns.

Speaker Change: Opex drivers upside opportunities relative to the plan we've outlined.

Speaker Change: And recession risk it.

Speaker Change: It seems like Texas is in a very good position.

Speaker Change: I have been trying most of this time to provide a sense of when.

Speaker Change: Regarding economic activity, but just wondering if you could give us your thoughts.

Speaker Change: When we're talking about at least $3 billion of Capex upside that's through the remainder of this decade.

Speaker Change: Across your footprint, if we do go into recession, how do you think about that and any other color on tariff impacts in general would be helpful. Thanks.

Speaker Change: We also then want to highlight the fact that we see some of these drivers extending well into the next and we will provide more we will obviously quantify what those long term tailwind will be as we roll forward in the next 10 year plan.

Jason Wells: So the net of it is I think we're well insulated from cost pressure, just given our domestic supply, and I see the recessionary pressures as really lower risk.

Jeremy Tonet: Yes. Thanks for the question, Jeremy obviously, it's an incredibly dynamic environment.

Jeremy Tonet: Changing by the day, so I'll keep my comments more directional at.

Jeremy Tonet: At this point.

Jeremy Tonet: And what I would say is from a from a tariff cost exposure standpoint.

Christopher Foster: I think maybe, Jeremy, one other thing I'd add just to keep in mind, because I think a lot of folks are now talking about, should there be the potential for a recessionary period? How does, you know, what does federal policy look like in reaction, specifically as it relates to tax policy? I think there we're also well positioned. really for a couple of reasons. First, as you know, we're primarily a wires company, so we don't really have the generation-related risks that can go with that. Two, from a transferability standpoint, we really do have minimal exposure on that front because we are a cash taxpayer today and so we have a practically immaterial amount of potential impact there and that's really in the next few years, not just in front of us right now.

Speaker Change: Our next question is from Jeremy Tonet with Jpmorgan Securities.

Jeremy Tonet: On a relative basis is very low risk.

Jeremy Tonet: Hi, good morning.

Jeremy Tonet: We source most of our material.

Speaker Change: Morning.

Speaker Change: It sounds like a lot of good stuff ahead of you here, but just wanted to.

Jeremy Tonet: Equipment domestically a little bit.

Speaker Change: Uh huh.

Speaker Change: Source internationally, we have already begun to take steps to convert that to domestic supply so from a from a cost for material cost standpoint.

Speaker Change: Come to a couple of questions that we're receiving more today I guess tariff concerns.

Speaker Change: In recession risk.

Speaker Change: It seems like Texas is in a very good position.

Speaker Change: I don't see that incremental cost pressure significant across our portfolio.

Speaker Change: Regarding economic activity, but just wondering if you could give us your thoughts.

Speaker Change: Across your footprint, if we do go into recession, how do you think about that and any other color on tariff impacts in general would be helpful. Thanks.

Speaker Change: From a recession standpoint.

Speaker Change: I'll start with the greater Houston region.

Speaker Change: He has really.

Speaker Change: Yes. Thanks for the question, Jeremy obviously, it's an incredibly dynamic environment.

Speaker Change: Over the last three decades really diversified the economy here is even though we're known for the oil and gas capital of the World Energy now represents only about a third of the economy.

Jeremy Tonet: So just want to be clear, we're really well positioned on that front. Got it. That's helpful. Thank you.

Speaker Change: Changing by the day, so I'll keep my comments more directional.

Speaker Change: At this point.

Speaker Change: And what I would say is from a from a tariff cost exposure standpoint, I think we are.

David Arcaro: Our next question is from David Arcaro with Morgan Stanley. Hey, thanks. Good morning. Hey, good morning, David. Let's see, digging in maybe just a little bit into the load growth outlook, you know, there's been some skepticism that we've heard around just how much load will actually crystallize in Texas. I mean, the numbers. So, I was just wondering if you could give some color maybe around what gives you confidence in the load growth forecast, maybe any breakdown you might be able to share on. construction in terms of gigawatts. near term, next few years. Just any further color on that.

Speaker Change: And when we look back over the last two decades because of the diversification.

Speaker Change: The economy has held up well under different recessionary pressure over the last few decades.

Speaker Change: On a relative basis is very low risk.

Speaker Change: We source most of our material.

Speaker Change: If anything I see.

Speaker Change: Equipment domestically a little bit.

Speaker Change: <unk>.

Speaker Change: Uh huh.

Potential.

Speaker Change: Potential tailwind from the tariff activity.

Speaker Change: Source internationally, we have already begun to take steps to convert that to domestic supply. So from a from a cost for material cost standpoint, I don't see that incremental cost pressure as significant across our portfolio.

Speaker Change: I alluded to in our prepared remarks, and Q&A, we have seen an increase in interconnection requests.

Some of that is driven by.

Speaker Change: Firms interested in onshore and manufacturing capacity and I think some of that is some of the notable.

Speaker Change: From a recession standpoint.

Speaker Change: I'll start with the greater Houston region.

Speaker Change: Announcements that I also referenced whether it's video.

Speaker Change: He has really.

Jason Wells: Yeah, David, I appreciate the question. And as we try to initiate sort of this updated view of load growth. On the fourth quarter call, we wanted to emphasize we took what we thought was a very conservative approach. You know, at that time, we outlined a 40 gigawatt interconnection request. And, you know, as you mentioned, there is a question about how much of that will materialize. We took a point of view that we think at least 10 gigawatts of that materialized by 2031 or 25%. Since that call, our load interconnection request is now up to 47 gigawatts, and we haven't moved that 10.

Speaker Change: Over the last three decades really diversified the economy here is even though we're known for the oil and gas capital of the World Energy now represents only about a third of the economy.

Speaker Change: And.

Speaker Change: And Fox Con and Apple all talking about centralizing some of their high Tech manufacturing here in the greater Houston region. So we may see it as a tailwind here.

Speaker Change: And when we look back over the last two decades because of the diversification.

Speaker Change: I would say as we look around our.

Speaker Change: Our portfolio I also think that we're also relatively well situated from potential recessionary concerns.

Speaker Change: The economy has held up well under different recessionary pressure over the last few decades.

Speaker Change: The focus on re shoring manufacturing capacity bodes well for our Indiana electric business.

Speaker Change: If anything I see.

Speaker Change: <unk>.

Speaker Change: Potential tailwind.

Speaker Change: There continues to be.

Speaker Change: The tariff activity.

Speaker Change: Very support of growth on the gas side in and around our entire Indiana gas footprint.

I alluded to in our prepared remarks, and Q&A, we have seen an increase in interconnection requests.

Jason Wells: So I think, you know, I think it's a pretty conservative approach when you look at that on the broader sort of ERCOT basis. You know, I think ERCOT applied a haircut of about a third to the total submissions. which represented about a 50% increase in peak demand. You know, we took at the time a 75% haircut. and still had a 50% increase in peak demand as a forecast. at that time. So I think while we're starting from a conservative standpoint, let me let me just sort of break down a couple of these categories just to show how conservative they were.

Speaker Change: Some of that is driven by.

Speaker Change: Haven't seen any evidence of slowdown in Minnesota. So the net of it is I think we're well.

Speaker Change: Firms interested in onshore and manufacturing capacity and I think some of that is some of the notable.

Speaker Change: Insulated from cost pressure, just given our domestic supply and I see the recessionary pressures.

Speaker Change:

Speaker Change: Announcements.

Speaker Change: You also referenced whether it's in a video.

Speaker Change: Really lower risk.

Speaker Change: And.

Speaker Change: I think maybe Jeremy one other thing I would add just to keep in mind, because I think a lot of folks are now talking about should there be the potential for recessionary period, how does what.

Speaker Change: And Fox Con and Apple all talking about centralizing some of their high Tech manufacturing here in the greater Houston region. So we may see it as a tailwind here.

Speaker Change: Yes.

Speaker Change: What a federal policy look like in reaction specific specifically as it relates to tax policy I think there were also well positioned.

Speaker Change: I would say as we look around our.

Speaker Change: Our portfolio I also think that we're also relatively well situated from potential recessionary concerns.

Jason Wells: You know, at the time, We had about a gigawatt and a half of data center demand in the 10 gigawatt. or about 11 in the 40. And of the gigawatt and a half that we had incorporated at that time, we're already working on connecting about a gigawatt. So, you can tell that that is a relatively conservative assumption around that. We talked about the fact that hydrogen was another driver for us. That was two of the 10 gigawatts we assumed, and customers were already breaking ground on projects for about a gigawatt and a half of that.

Speaker Change: It's really for a couple of reasons first as you know.

Speaker Change: The focus on re shoring manufacturing capacity bodes well for our Indiana electric business.

Speaker Change: We're primarily a wireless company. So we don't really have.

Speaker Change: The generation related risks that can go with that too from.

Speaker Change: There continues to be.

Speaker Change: From a transferability standpoint, we really do have minimal exposure on that front, because we are a cash taxpayer today and so we have a practically immaterial amount.

Speaker Change: Very support of growth on the gas side in and around our entire Indiana gas footprint.

Speaker Change: We haven't seen any evidence of slowdown in Minnesota. So the net of it is I think we're well.

Speaker Change: Potential impact there and Thats really in the next few years not just in front of US right. Now so just want to be clear, we are really well positioned on that front as well.

Speaker Change: Insulated from cost pressure, just given our domestic supply and.

Speaker Change: The recessionary pressures as.

Speaker Change: Got it that's helpful. Thank you.

Speaker Change: As really lower risks.

Speaker Change: Our next question is from David Arcaro with Morgan Stanley.

Jeremy Tonet: I think maybe Jeremy one other thing I would add just to keep in mind, because I think a lot of folks are now talking about should there be the potential for a recessionary period. How does what is federal policy looked like in reaction specific it specifically as it relates to tax policy I think.

Speaker Change: Oh, Hey, Thanks, Good morning, Hey, good morning, David.

David Arcaro: So that was the profile that we have used to be very conservative around these requests. We're tracking everything. Our teams are working hard to deliver the growth across the full set of interconnection requests. But at this time, we think that that 10 gigawatt or nearly 50% increase in peak demand by 2031 is a conservative and realistic assumption. Got it. Thanks. Yeah, that's that's helpful context. The numbers, even when you haircut them so much, they still are very large. So yeah, that's helpful.

Speaker Change: Let's see digging into maybe just a little bit instead of load growth outlook. You know there's been some skepticism that we've heard around just how much load will actually crystallizing, Texas I mean, the numbers are huge.

Speaker Change: There were also well positioned.

Speaker Change: That's really for a couple of reasons first as you know, we're primarily a wireless company. So we don't really have.

Speaker Change: So I was just wondering if you could give some color maybe around what gives you confidence in the load growth forecast, maybe any breakdown you might be able to share on like what's under construction in terms of gigawatts of what's planned in the near term.

Speaker Change: The generation related risks that can go with that too from a transfer ability standpoint, we really do have minimal exposure on that front, because we are a cash taxpayer today and so we have practically immaterial amount.

Speaker Change: The next few years.

Speaker Change: Just any further color.

Speaker Change: On that to increase confidence there.

Speaker Change: Potential impact there and Thats really in the next few years not just in front of US right. Now. So just wanted to be clear, we are really well positioned on that front as well.

David: Yes, David I appreciate the question.

David Arcaro: One other quick follow-up on the transmission outlook and the 765 consideration. I guess we'll get a viewpoint on whether 765 might be the way the state goes today. Is that going to be directly applicable to you? potentially weaving it in and updating that, you know the $2 billion CAPEX number or could there still be, you know an evaluation? for the state to consider, well, do we really want to apply 765 across the state? a blend of, you know, 345 and 765. David, I think that's the question. And it's why we've been conservative in terms of kind of folding in estimates of what that cost will be.

David: Tried to initiate this updated view of load growth.

David: On our fourth quarter call. We wanted to emphasize we took what we thought was a very conservative approach.

Speaker Change: Got it that's helpful. Thank you.

David Arcaro: Our next question is from David Arcaro with Morgan Stanley.

David: At that time, we outlined a 40 gigawatt interconnection request.

Speaker Change: Alright, Thanks, Good morning, Hey, good morning, David.

Speaker Change: As you've mentioned there is a question about how much of that will materialize.

David Arcaro:

Speaker Change: Let's see digging into maybe just a little bit into the load growth outlook, you know theres been some.

David: We took a.

David: Our point of view that we think at least 10 gigawatts of that materialized by 2031 or 25% since that call. Our lowered interconnection request is now up to 47, Gigawatts and we haven't moved to that.

Speaker Change: Susan that we've heard around just how much load will actually crystallizing, Texas I mean, the numbers are huge.

Speaker Change: So I was just wondering if you could give some color maybe around what gives you confidence in the load growth forecast, maybe any breakdown you might be able to share on like what's under construction in terms of gigawatts of what's planned in the near term.

David: So I think it's a pretty conservative.

Speaker Change: Broach when you look at that on the broader sort of ERCOT basis.

David: I think ERCOT.

David: Applied a haircut of about a third to the total submissions, which represented about a 50% increase in peak demand.

Speaker Change: Next few years.

Speaker Change: Just any further color.

Jason Wells: You know, currently speaking, the 765 network that's been proposed by ERCOT includes our system. And that's why we've been alluding to there is potential CAPEX upside beyond what we've been discussing to the extent the state wants to move forward with that approach. Now, to your point, they may adopt a 765 kV standard. For a portion of the Urquhart market, for all of Urquhart, they may say that each of the utilities needs to bring their own perspective of what makes sense to serve their load and their needs. And so it is a fairly dynamic situation. Currently, a couple of our substations are included as part of the statewide proposal.

Speaker Change: On that to increase confidence there.

Speaker Change: No we took at the time of 75% haircut.

David Arcaro: Yes, David I appreciate the question.

Speaker Change: Tried to initiate this updated view of load growth.

David: And still had a 50% increase in.

Speaker Change: In the fourth quarter call. We wanted to emphasize we took what we thought was a very conservative approach.

David: And peak demand as a forecast.

David: At that time, so I think we're starting from a conservative standpoint, let me just sort of break out a couple of these categories just to show how conservative they were at the time.

Speaker Change: At that time, we outlined a 40 gigawatt interconnection request.

Speaker Change: As you've mentioned there is a question about how much of that will materialize.

David: We had about.

Speaker Change: We took a.

David: Gigawatt to have a data center.

Speaker Change: Our point of view that we think at least 10 gigawatts of that materialized by 2031 or 25% since that call. Our lowered interconnection request is now up to 47, Gigawatts and we haven't moved to that Ted.

David: Demand in the 10 Gigawatts.

David: Or about 11 40.

David: And of the gigawatt and a half that we had incorporated at that time, we're already working on connecting about a gigawatt.

Speaker Change: So I think it's a pretty conservative.

Jason Wells: The way the Transmission build works here in the state of Texas is, you know, wherever the transmission system ends, whoever owns that substation has right of first refusal to build. And so today, if the policy that has been floated is passed, we would be beginning to work towards that 765 KV standard for a portion of our system. But we've been conservative because it may be, that may be reduced, you know, they may change their approach. And so obviously more to come. We've just been trying to provide transparency around the range of potential just given how significant the incremental capex is.

Speaker Change: Broach when you look at that the broader sort of ERCOT basis.

David: So you can tell that that is relatively.

Speaker Change: I think ERCOT.

Speaker Change: Applied a haircut of about a third to the total submissions, which represented about a 50% increase in peak demand.

David: Conservative assumption around that we talked about the fact that hydrogen.

David: Another driver for us that was two of the.

Speaker Change: We took at the time of 75% haircut.

David: Of the 10 Gigawatts we assumed.

Speaker Change: And still had a 50% increase in.

David: Customers were already breaking ground on projects for about a gigawatt to half of that.

Speaker Change: And peak demand as a forecast.

Speaker Change: At that time, so I think we're starting from a conservative standpoint, let me just sort of break out a couple of these categories just to show how conservative they were at the time.

David: So that was the profile that we have used to be very conservative around these requests we're tracking everything our teams are working hard to.

Speaker Change: We had about.

David: Deliver the growth across the full set of interconnection request, but at this time, we think that that 10 gigawatt or nearly 50% increase in peak demand by 2031 is a conservative and realistic assumption.

Speaker Change: Gigawatt to have a data center.

Speaker Change: Demand in the 10 Gigawatts.

Operator: Yeah, absolutely. That all makes sense. Great. Thanks. Operator, we're at the bottom of the hour now, if you don't mind, we have time.

Speaker Change: Or about 11 40.

Speaker Change: And of the gigawatt and a half that we had incorporated at that time, we're already working on connecting about a gigawatt.

Speaker Change: Got it thanks.

Speaker Change: That's helpful context, the numbers, even when you hear kind of so much they still are.

Andrew Weisel: Our last question is from Andrew Weisel with Scotiabank.

Speaker Change: So you can tell us that that is relatively.

Speaker Change: Very large so yeah thats helpful.

Andrew Weisel: Hey, good morning, everyone. It took you a quick one to elaborate on the load forecast. A lot of detail there. I'll make it quick. You said the interconnection queue is grown by 7 gigawatts. Can you get more detailed in terms of what types of customers those are? The breakout on slide 12 seems pretty similar to the prior version. Yeah, you know, it's of the of the seven, it's nearly six gigawatts of that is data center demand. And another gig is roughly half of that is related to manufacturing. And another half a gigawatt of that is related to industrial.

Speaker Change: For some additional color there one other just quick follow up on the transmission outlook and the 765 consideration I guess, we'll get a viewpoint on.

Speaker Change: Conservative assumption around that we talked about the fact that hydrogen was.

Speaker Change: Another driver for us that was two of the.

Speaker Change: Of the 10 Gigawatts we assumed.

Speaker Change:

Speaker Change: On whether 765 might be the way to state goes today is that going to be directly applicable to you in terms of.

Speaker Change: Customers were already breaking ground on projects for about a gigawatt to half of that.

Speaker Change: So that was the profile that we have used to be very conservative around these requests we're tracking everything our teams are working hard to.

Speaker Change: Potentially leaving it in and updating that.

Speaker Change: The $2 billion Capex number or.

Speaker Change: Could there still be an evaluation in the future for the state to consider what do we really want to apply 70 75 across the state could it be.

Speaker Change: Deliver the growth across the full set of interconnection request, but at this time, we think that that 10 gigawatt or nearly 50% increase in peak demand by 2031 is a conservative and realistic assumption.

Speaker Change: A blend of $3 45, and 765 at the end of the day.

Jason Wells: Demand. So again, we're continuing to see a diverse divide set of low growth.

Speaker Change: David I think that's the question and that's why we've been conservative in terms of kind of folding in estimates of what that cost will be currently speaking.

Speaker Change: Got it thanks.

Speaker Change: That's helpful context, the numbers, even when you hear kind of so much they still are.

Christopher Foster: Okay, great. Then just very briefly on the FFO to debt, good progress. You're just a hair under the targeted range. And based on all the cash inflows and commentary on financing the incremental path x, seems like you have a high degree of confidence you'll be north of 14% by year end.

Speaker Change: 765.

Speaker Change: Very large so yeah thats helpful.

Speaker Change: Network, that's been proposed by ERCOT includes our system.

Speaker Change: For some additional color there one other just quick follow up on the transmission outlook and the 765 consideration I guess, we'll get a viewpoint on.

Speaker Change: And that's why we've been alluding to there is potential capex upside beyond what we've been discussing to the extent the state wants to move forward with that approach.

Christopher Foster: Can you just give any commentary on conversations you've been having with the agencies and hopefully getting off of the negative watches? Sure thing, Andrew. You're right. We're pleased about the progress we've already made kind of going into this quarter. You should assume Q2, just to look ahead, is going to be relatively light, just because of the general profile we have in a given year. But really, the important part will be, and for the rating agencies as well, the securitization, both the May storms related or derecho event and the hurricane barrel related one. We are ahead of plan related to, and also have a settlement related to the May storms event.

Speaker Change:

Speaker Change: On whether 765 might be the way to state goes today is that going to be directly applicable to you in terms of.

Speaker Change: To your point they may adopt 70 65 kv standard.

Speaker Change: For a portion of the aircraft market for all of our card. They may say that each of the utilities needs to bring their own perspective of what makes sense to serve their load and their needs and so it is a fairly dynamic situation. Currently a couple of our Substations are included as part of the state wide.

Speaker Change: Potentially leaving it in and updating that.

Speaker Change: The $2 billion Capex number or.

Speaker Change: Could there still be an evaluation in the future for the state to consider what do we really want to apply 70 75 across the state could it be.

Speaker Change: A blend of $3 45, 765 at the end of the day.

Speaker Change: The way the.

David Arcaro: David I think that's the question and that's why we've been conservative in terms of kind of Fortinet estimates of what that cost will be currently speaking.

Speaker Change: Transmission build works here in the state of Texas is wherever the transmission system and whoever owns that substation has right of first refusal to build and so today. If the policy that has been floated is passed.

Christopher Foster: So that is absolutely on track. And we do, we are very focused on year end for completing the hurricane barrel related recovery process and approval and effectuating the securitization. So those are the key drivers for really stepping into next year. That's that comfort that we've got around the consistent cushion of 100 to 150 basis points that we reference. With the rating agencies in particular, obviously, I can't speak for them individually, but I would say, I think their focus has been on a few areas. One. Just seeing the strength of the regulatory construct in Texas there, I think we've been able to show progress on both our interim capital recovery mechanisms thus far.

Speaker Change: 765.

Speaker Change: Network, that's been proposed by ERCOT includes our system.

Speaker Change: Would be beginning to work towards that 765.

Speaker Change: And that's why we've been alluding to there is potential capex upside beyond what we've been discussing to the extent the state wants to move forward with that approach.

Speaker Change: <unk> standard for a portion of our system, but we think conservative because it may be.

Speaker Change: That may be reduced or they may change their approach and so obviously more to come we've just been trying to provide transparency around the range of potential just given how significant the incremental capex is.

Speaker Change: To your point they may adopt 65 kv standard.

Speaker Change: For a portion of the aircraft market for all of our ERCOT. They may say that each of the utilities needs to bring their own perspective of what makes sense to serve their load and their needs and so it is a fairly dynamic situation. Currently a couple of our Substations are included as part of the state of <unk>.

Speaker Change: Yeah, absolutely that will make sense great. Thanks, so much.

Christopher Foster: The Houston Electric Rakeyes. and the May Storms event progress, as I've referenced, I think in my sense is in order for them to be able to move off of the negative outlook, it will require some progress here on the hurricane barrel related recovery request. And as we indicated, we will be filing that here shortly. So it will have a period of review of roughly five months for the prudency related review. And we do think that will be the key period for insight for the market broadly, including the rating .

Speaker Change: We're at the bottom of the hour.

Speaker Change: Don't mind.

Just one more quick question. Thank you.

Speaker Change: Our last question is from Andrew Weisel with Scotiabank.

Speaker Change: The way the.

Speaker Change: Transmission build works here in the state of Texas is wherever the transmission system and whoever owns at substation has right of first refusal to build and so today. If the policy that has been floated is passed.

Andrew Weisel: Hey, good morning, everyone.

Andrew Weisel: It's just a quick one to elaborate on the load forecast.

Andrew Weisel: A lot of detail there I'll make it quick you said the interconnection <unk> grown by seven Gigawatts can you get more detailed in terms of what types of customers. Those arent the breakout on slide 12 seems pretty similar to the prior version.

Speaker Change: Would be beginning to work towards that 765.

Andrew Weisel: Great.

Andrew Weisel: Thanks so much. Thanks, Andrew.

Speaker Change: <unk> theater for a portion of our system, but we've been conservative because it may be.

Andrew Weisel: Yes.

Operator: Operator with that final call or question that will conclude our call for the day.

Andrew Weisel: Of the seven it's nearly six gigawatts of that is data center demand.

Speaker Change: That may be reduced or they may change their approach and so obviously more to come we've just been trying to provide transparency around the range of potential just given how significant the incremental capex is.

Operator: This concludes CenterPoint Energy's first quarter of 2025 earnings conference call. Thank you for your participation.

Andrew Weisel: Another gig is roughly.

Andrew Weisel: Half of that is.

Andrew Weisel: Related to manufacturing and another half a gigawatt of that is related to industrial.

Speaker Change: Yeah, absolutely that will make sense great. Thanks, so much.

Andrew Weisel: Demand. So again, we're continuing to see a diversified set of growth drivers.

Speaker Change: We're at the <unk> mine.

Speaker Change: We have one more.

Speaker Change: Question. Thank you.

Speaker Change: Okay, Great and then just very briefly on the <unk> that good progress Youre, just a hair under the targeted range and based on all the cash inflows and commentary on finance can be incremental capex. It seems like you have a high degree of confidence youll be north of 14% by year end can you just give any commentary on that conversation.

Speaker Change: Our last question is from Andrew Weisel with Scotiabank.

Andrew Weisel: Hey, good morning, everyone.

Andrew Weisel: A quick one to elaborate on the load forecast.

Speaker Change: A detailed and I'll make it quick you said the interconnection queue has grown by seven Gigawatts can you get more detailed in terms of what types of customers has earned the breakout on slide 12 seems pretty similar to the prior version.

Speaker Change: You've been having with the agencies and hopefully getting off of the negative watches.

Andrew Weisel: Yes.

Speaker Change: Sure thing Andrew.

Andrew Weisel: Yes.

Speaker Change: We're pleased about the progress we've already made kind of going into this quarter.

Andrew Weisel: Of the seven it's nearly six gigawatts of that is data center demand.

Speaker Change: Should assume Q2 just to look at it is going to be relatively light. Because this is the general profile, we have any given year, but really the important part will be in for the rating agencies as well.

Andrew Weisel: Another gig is roughly.

Andrew Weisel: Half of that is.

Andrew Weisel: Related to manufacturing and another half a gigawatt of that is related to industrial.

Speaker Change: The securitization both.

May storms related or derecho event Hurricane Barry related when we are ahead of plan.

Demand.

Andrew Weisel: Again, we're continuing to see a diversified set of growth drivers.

Speaker Change: Related to and also have a settlement related to the May storms event. So that is absolutely on track and we do.

Andrew Weisel: Okay, Great and then just very briefly on the <unk> that good progress Youre, just a hair under the targeted range and based on all the cash inflows and commentary on finance can be incremental capex. It seems like you have a high degree of confidence youll be north of 14% by year end can you just give any commentary on conversations.

Speaker Change: We are very focused on year end, we're completing the hurricane barrel related recovery process and approval and effectuate. The securitization. So those are the key drivers for really stepping into next year that comfort that we've got around the consistent cushion of 100 to 150 basis points that we referenced with the rating agencies in particular.

Andrew Weisel: <unk> been having with the agencies and hopefully getting off of the negative watches.

Speaker Change: I can't speak for them individually, but I would say I think their focus has been in a few areas one.

Andrew Weisel: Sure thing Andrew Youre right were pleased about the progress we've already made kind of going into this quarter.

Speaker Change: Just seeing the strength of the regulatory construct in Texas. There I think we've been able to show progress on both our interim capital recovery mechanism thus far.

Andrew Weisel: You should assume Q2 just to look at it is going to be relatively light. Because this is the general profile, we have any given year, but really the important part will be in for the rating agencies as well.

Speaker Change: The Houston electric rate case.

Speaker Change: And then may storms event progress as I've referenced I think in my <unk>.

Andrew Weisel: The securitization, both the may storms related or derecho event, and the hurricane Barry related when we are ahead of plan.

Speaker Change: This is in order for them to be able to move off of the negative outlook. It will require some progress here on the hurricane bear a related recovery request and as we indicated we will be filing that here. Shortly so it will have a period of review of roughly five months for the prudency related view, we do think that will be the key period for insight.

Andrew Weisel: Related to and also have a settlement related to the May storms event. So that is absolutely on track and we do.

Andrew Weisel: We are very focused on year end, we're completing the hurricane barrel related recovery process and approval and FX waiting the securitization. So those are the key drivers for <unk>.

Speaker Change: For the market broadly, including the rating agencies.

Andrew Weisel: Stepping into next year that comfort that we've got around the consistent cushion of 100 to 150 basis points that we referenced with the rating agencies in particular, obviously I can't speak for them individually, but I would say I think their focus has been in a few areas one.

Speaker Change: Great. Thanks, so much thank.

Thanks, Andrew.

Speaker Change: Operator.

Speaker Change: Fair question.

Speaker Change: Thank you.

Speaker Change: This concludes Centerpoint Energy's first quarter 2025 earnings conference call. Thank you for your participation.

Andrew Weisel: Just seeing the strength of the regulatory construct in Texas. There I think we've been able to show progress on both our interim capital recovery mechanism thus far.

Andrew Weisel: The Houston electric rate case.

Andrew Weisel: And then may storms event progress as I've referenced.

Andrew Weisel: I think it makes sense.

Andrew Weisel: In order for them to be able to move off of the negative outlook will require some progress here on the hurricane related recovery request and as we indicated we will be filing that here shortly.

Andrew Weisel: It will have a period of review of roughly five months for the prudency related view, we do think that will be the key period for insight for the market broadly, including the rating agencies.

Andrew Weisel: Great. Thanks, so much thank.

Andrew Weisel: Thanks, Andrew.

Andrew Weisel: Operator.

Andrew Weisel: Fair question that'll conclude our call for today.

Andrew Weisel: Thank you.

Andrew Weisel: This concludes Centerpoint Energy's first quarter 2025 earnings conference call. Thank you for your participation.

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