Q1 2025 Dominion Energy Inc Earnings Call

Operator: Please stand by, your program is about to begin. Welcome to the Dominion Energy first quarter 2025. At this time, each of your lines...

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Speaker Change: Welcome to the Dominion Energy first quarter 2025 earnings conference call at this time each of your lines are in a listen only mode.

Operator: This is the conclusion of today's presentation. All instructions will be given. Please follow if you would like to ask questions.

Speaker Change: At the conclusion of today's presentation, we will open the floor for questions instructions will be given for the procedure to follow if you would like to ask a question at that time.

David McFarland: I would now like to turn the call over to David McFarland, Vice President, Investor Relations. Good morning, and thank you for joining Dominion Energy's first quarter 2025 earnings call. Earnings materials, including today's prepared remarks, contain forward-looking statements and estimates that are subject to various risks and uncertainties. Please refer to our SEC filings, including our most recent annual report on Form 10-K and our quarterly reports on Form 10-Q, for a discussion of factors that may cause results to differ from management's estimates and expectations. This morning, we will discuss some measures of our company's performance that differ from those recognized by GAAP.

Speaker Change: I would now like to turn the call over to David Mcfarland, Vice President Investor Relations and Treasurer.

Speaker Change: Good morning, and thank you for joining Dominion Energy's first quarter 2025 earnings call earnings materials, including today's prepared remarks contain forward looking statements and estimates that are subject to various risks and uncertainties. Please refer to our SEC filings, including our most recent annual report on Form 10-K, and our quarterly reports.

Speaker Change: On Form 10-Q for a discussion of factors that may cause results to differ from management's estimates and expectations.

Speaker Change: This morning, we will discuss some measures of our company's performance that differ from those recognized by GAAP reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measures, which we can calculate are contained in the earnings release kit.

David McFarland: Reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measures, which we can calculate, are contained in the Earnings Release Kit. I encourage you to visit our Investor Relations website to review webcast slides, as well as the Earnings Release Kit.

Speaker Change: I encourage you to visit our Investor Relations website to review webcast slides as well as the earnings release kit.

David McFarland: Joining today's call are Bob Blue, Chair, President and Chief Executive Officer, Steven Ridge, Executive Vice President and Chief Financial Officer, and Diane Leopold, Executive Vice President and Chief Operating Officer.

Speaker Change: Joining today's call are Bob Blue Chair, President and Chief Executive Officer, Steven Ridge, Executive Vice President and Chief Financial Officer, and Diane Leopold Executive Vice President and Chief Operating Officer, I will now turn the call over to Steven.

Steven Ridge: I will now turn the call over to Steven. Thank you, David, and good morning, everyone. Since the conclusion of the business review, we've communicated three priorities. One, consistently achieving our financial commitments. Two, continued on-time achievement of major construction milestones for the Coastal Virginia offshore wind project. And three, achieving constructive regulatory outcomes that demonstrate our ability to work cooperatively with regulators and stakeholders to deliver results that benefit both customers and shareholders. By fulfilling these goals, we empower our employees to deliver on our critical mission to provide the reliable, affordable, and increasingly clean energy that powers our customers every day.

Steven Ridge: Thank you David and good morning, everyone.

Steven Ridge: Since the conclusion of the business review, we've communicated three priorities one consistently achieving our financial commitments.

Steven Ridge: Two continued on time achievement of major construction milestones for the coastal Virginia offshore wind project and three achieving constructive regulatory outcomes that demonstrate our ability to work cooperatively with regulators and stakeholders to deliver results that benefit both customers and shareholders.

Steven Ridge: Fulfilling these goals, we empower our employees to deliver on our critical mission to provide the reliable affordable and increasingly clean energy that powers, our customers' everyday on today's call will address each of these areas starting with achieving our financial commitments.

Steven Ridge: On today's call, we'll address each of these areas, starting with achieving our financial commitments. As shown on slide 3, we're off to a strong start to the year with first quarter operating earnings of $0.93 per share, which includes $0.03 of better-than-normal weather, $0.02 of R&G 45Z income, $0.02 of better-than-expected sales. Strong rider investment growth and a combination of O&M and tax timing helps that we expect to normalize through the rest of the year. First quarter gap results were $0.75 per share. We are affirming all financial guidance provided on our fourth quarter earnings call, including 2025 operating earnings per share of $3.28 to $3.52 per share, inclusive of RNG45Z income, with a midpoint of $3.40.

Steven Ridge: As shown on slide three we're off to a strong start to the year with first quarter operating earnings of 93 per share, which includes three cents a better than normal weather two cents of Orange <unk> 45 of the income to sense of better than expected sales strong.

Strong writer investment growth and a combination of O&M and tax timing helps that we expect to normalize to the rest of the year.

Steven Ridge: First quarter GAAP results were <unk> 75 cents per share.

Steven Ridge: We are affirming all financial guidance provided on our fourth quarter earnings call, including 2025 operating earnings per share of $3.28 to $3 52 per share inclusive of RMG forty-five fee income with a midpoint of $3 40.

Steven Ridge: As a reminder, a summary of all adjustments between operating and gap results is included in Schedule 2 of the Earnings Release Kit. Additionally, a summary of all drivers for earnings relative to the prior year period is included in Schedule 4 of the Earnings Release Kit.

Steven Ridge: As a reminder, our summary of all adjustments between operating and GAAP results is included in schedule two of the earnings release kit.

Steven Ridge: Additionally, a summary of all drivers for earnings relative to the prior year period is included in schedule four of the earnings release kit.

Steven Ridge: Turning to our financing plan as shown on slide 4, we've sold approximately $1 billion of forward-settled common equity under our existing ATM program at a weighted average price of approximately $57 and expect to complete $200 million of DRIP-related equity issuance by year-end. This is consistent with our 2025 Common Equity Guidance. We view this level of steady equity issuance under existing programs, in the context of our sizable growth capital spending program, as appropriate to keep our consolidated credit metrics within the guidelines for our strong credit ratings category. We remain focused on balance sheet conservatism, and there is no change to our previously communicated credit-related targets.

Steven Ridge: Turning to our financing plan as shown on slide four we sold approximately $1 billion of four settled common equity under our existing ATM program at a weighted average price of approximately $57 and expect to complete $200 million of drip related equity issuance by year end. This is consistent with our 2020.

Steven Ridge: <unk> common equity guidance.

Steven Ridge: We view this level of steady equity issuance under our existing programs in the context of our sizeable growth capital spending program as appropriate to keep our consolidated credit metrics within the guidelines for our strong credit ratings category. We remained focused on balance sheet conservatism and there is no change to our previously communicated.

Steven Ridge: Related targets.

Steven Ridge: Turning briefly to data centers, as a reminder from our fourth quarter update, we have approximately 40 gigawatts of data center capacity in various stages of contracting, including what is now approximately 10 gigawatts of capacity contracted under electric service agreements. Since our last call, we have not observed any evidence of slowing demand from data center customers across our service area.

Steven Ridge: Turning briefly to Datacenters as a reminder, from our fourth quarter update we have approximately 40 gigawatts of data center capacity in various stages of contracting including what is now approximately 10 gigawatts of capacity contracted under electric service agreements since our last call. We have not observed any evidence of slowing demand from data center customers across our service area.

Steven Ridge: In conclusion, I'll reiterate that I'm highly confident in our ability to deliver on our financial plan. The financial guidance has been built to be appropriately, but also not unreasonably conservative to weather unforeseen challenges that may come our way.

Steven Ridge: In conclusion, I'll reiterate that I'm highly confident in our ability to deliver on our financial plan. The financial guidance has been built to be appropriately, but also not unreasonably conservative to weather unforeseen challenges that may come our way with that I'll turn the call over to Bob. Thank you Steven.

Bob Blue: With that, I'll turn the call over to Bob. Thank you, Steven.

Bob Blue: Turning to safety performance.

Speaker Change: Turning to safety performance.

Bob Blue: Our Dominion Energy family experienced tragedy on March 31st, when Ryan Barwick, a material fuel handler at Water East Station in Eastover, South Carolina, died after being severely injured while unloading a rail car. We are deeply saddened by the loss of our dedicated colleagues. and our thoughts and prayers continue to be with his family, friends, co-workers and community.

Speaker Change: Dominion energy family experienced tragedy on March 31.

Speaker Change: Brian Barwick material fuel handler at watery station in East over South Carolina died after being severely injured while unloading a railcar.

We are deeply saddened by the loss of our dedicated colleagues.

Speaker Change: And our thoughts and prayers continue to be with his family friends and co workers and community.

Bob Blue: Safety is our first core value. It's at the heart of our corporate culture, and we will continue to improve until we achieve the only acceptable safety statistic, zero injuries.

Speaker Change: Safety is our first core value.

Speaker Change: It's at the heart of our corporate culture, and we will continue to improve until we achieve the only acceptable safety statistic zero injuries.

Bob Blue: Next on our coastal Virginia offshore wind project, I'd like to start with a few project highlights on slide five. The project is 55% complete, months away from first delivery of electricity to customers in early 2026 and on schedule for full completion at the end of next year. It represents the fastest and most economical way to deliver almost 3 gigawatts of electricity to Virginia's grid to support America's AI and cyber preeminence and the largest data center market in the world, to support U.S. shipbuilding at customers like Huntington Ingalls, the largest military shipbuilding company in the United States and one of our largest customers, and support some of the country's largest and most important military and defense installations.

Speaker Change: Next on our coastal Virginia offshore wind project I'd like to start with a few project highlights on slide five the.

Speaker Change: The project is 55% complete months away from first delivery of electricity to customers in early 2026 and on schedule for full completion at the end of next year it.

Speaker Change: It represents the fastest and most economical way to deliver almost three gigawatts of electricity to Virginia's grid to support America's AI and cyber preeminence in the largest data center market in the world to support U S shipbuilding at customers like Huntington Ingalls, the largest military shipbuilding company in the United States and one of our largest customers and support.

Speaker Change: Some of the country's largest and most important military and defense installations. It has robust bipartisan support from Virginia government and congressional leaders local communities military and defense interests, the commercial marine industry as well as civic educational environmental Labor and community partners. It's created approximately 2000 direct and <unk>.

Bob Blue: It has robust bipartisan support from Virginia government and congressional leaders, local communities, military and defense interests, the commercial marine industry, as well as civic, educational, environmental, labor, and community partners. It's created approximately 2,000 direct and indirect American jobs and generated $2 billion in American economic activity. And finally, it's supported by Virginia law and approved by the State Corporation Commission and federal agencies.

Speaker Change: Indirect American jobs and generated $2 billion in American economic activity.

Speaker Change: And finally, it's supported by Virginia Law and approved by the State Corporation Commission and federal agencies. In summary. This project is consistent with the goal of securing American energy dominance and as part of our comprehensive all of the above energy strategy to affordably meet growing energy needs since.

Bob Blue: In summary, this project is consistent with the goal of securing American energy dominance and is part of our comprehensive all-of-the-above energy strategy to affordably meet growing energy needs. Since our last update, work has continued apace. As shown on slide 6, 100% of the project's 176 transition pieces have been rolled, 86% have been successfully steel welded, and 50% are now complete, including the 59 that we have successfully installed since we began that work on December 31st. We expect the final transition piece to be completed in October. More than 80% of the project's 176 monopiles have been completed and successfully delivered to Virginia, including the 78 that were installed during the last installation season.

Speaker Change: Since our last update work has continued to pace as shown on slide six 100% of the project's 176 transition pieces have been rolled 86% had been successfully steel welded and 50% are now complete including the 59 that we have successfully installed since we began that work on December 31st we expect the final <unk>.

Speaker Change: Transition piece to be completed in October.

Speaker Change: More than 80% of the project's 176 mine of pilots have been completed and successfully delivered to Virginia, including the 78 that were installed during the last installation season, we expect deliveries of the final 32 mono piles to continue steadily in the coming weeks.

Bob Blue: We expect deliveries of the final 32 monopiles to continue steadily in the coming weeks. The first offshore substation was installed on March 10th, with the remaining two offshore substations on track to be delivered this summer and installed in the fall. Siemens Gamesa is making excellent and on-time progress in the fabrication of the project's 176 wind turbines. The sections for 28 full towers have been completed, with 45 additional towers currently in production. In addition, 36 nacelles are complete or awaiting final testing, and 28 blades have been fully cast. Finally, as shown on slide 10, Charybdis, our Made in America Jones Act compliant installation vessel, is expected to enter service and begin making its way to Virginia in the next four to eight weeks, on schedule, to support turbine installation this summer as planned.

Speaker Change: The first offshore substation was installed on March 10th with the remaining two offshore substations on track to be delivered this summer and installed in the fall Siemens Gamesa is making excellent and on time progress in the fabrication of the projects of 176 wind turbines. The sections for 28 full towers have been completed with 45 additional towers.

Speaker Change: Currently in production. In addition, 36 the cells are complete or awaiting final testing and 28 blades have been fully cast.

Speaker Change: Finally, as shown on slide 10, Charybdis, our made in America Jones Act compliant installation vessel is expected to enter service and began making its way to Virginia in the next four to eight weeks on schedule to support turbine installation this summer as planned.

Bob Blue: Before I turn to tariff exposure, I'd like to highlight that the costs for project components excluding tariff impacts have remained in line with the prior update. The project's current unused contingency is unchanged from our last update at $222 million, which now represents about 6% of remaining project costs.

Speaker Change: Before I turn to tariff exposure I'd like to highlight that the cost for project components. Excluding tariff impacts have remained in line with the prior update the projects current unused contingency is unchanged from our last update of $222 million, which now represents about 6% of remaining project costs.

Bob Blue: Now, let me address tariff exposure. It's difficult to fully assess the impact tariffs may have to the project's final cost, as actual costs incurred are dependent upon the tariff requirements and rates, if any, at the time of delivery of the specific component. As a result of this ongoing uncertainty, we've provided potential tariff exposure across discrete tariff categories in illustrative durations on slide 11. First, through the end of the first quarter, the project had incurred actual tariff costs of $4 million. Second, if current tariff policy were to continue through the end of the second quarter, that number would increase to about $120 million.

Speaker Change: Now, let me address tariff exposure, it's difficult to fully assess the impact tariffs may have to the project's final cost as actual costs incurred are dependent upon the tariff requirements and rates if any at the time of delivery of the specific component.

Speaker Change: As a result of this ongoing uncertainty we've provided potential tariff exposure across discrete care of categories and illustrative durations on slide 11.

Speaker Change: First through the end of the first quarter. The project 10 incurred actual tariff costs of $4 million.

Speaker Change: If current tariff policy were to continue through the end of the second quarter that number would increase to about $120 million. Finally, if current tariff policy were to continue through the end of 2026. When the project is expected to fully enter service cumulative tariff impact would be expected to be approximately $500 million for the avoidance of doubt.

Bob Blue: Finally, if current tariff policy were to continue through the end of 2026, when the tariff impact would be expected to be approximately $500 million. For the avoidance of doubt, the corresponding amount borne by Dominion Energy would be about $130 million. Of course, changes to future tariff policy could affect these estimates. We made our quarterly offshore wind construction update filing with the Virginia State Corporation Commission today, in which we increased total project costs by about $120 million, which aligns with our estimate of actual incurred plus projected tariff costs through the end of the second quarter, as you see in the table in today's materials.

Speaker Change: The corresponding them out borne by Dominion energy would be about $130 million of course changes to future tariff policy could affect these estimates we.

Speaker Change: We made our quarterly offshore wind construction update filing with the Virginia State Corporation Commission today in which we increased total project costs by about $120 million, which aligns with our estimate of actual incurred plus projected tariff costs through the end of the second quarter as you see in the table in today's materials as a result, we recorded.

Bob Blue: As a result, we recorded a modest charge this quarter for costs not expected to be recovered from customers in accordance with the cost-sharing settlement with Virginia regulators and our 50 percent cost-sharing partnership agreement with Stone Peak. The cost-sharing and risk-sharing continues to work as intended to protect customers and shareholders.

Speaker Change: A modest charge this quarter for costs not expected to be recovered from customers in accordance with the cost sharing settlement with Virginia regulators and our 50% cost sharing partnership agreement with stone Pete.

Speaker Change: The cost sharing and risk sharing continues to work as intended to protect customers and shareholders. As a result of the cost sharing settlement approved by Virginia regulators. The updated project cost of $10 $8 billion is expected to increase residential customer bills by an average of four cents a month over the life of the project and the updated project L. C O E a.

Bob Blue: As a result of the cost-sharing settlement approved by Virginia regulators, the updated project cost of $10.8 billion is expected to increase residential customer bills by an average of four cents a month over the life of the project. And the updated project LCOE of $62 per megawatt hour, inclusive of RECs, continues to benchmark very favorably with new generation alternatives including solar, battery, and gas-fired generation. Let me be clear, CVOW remains one of the most affordable sources of energy for our customers.

Speaker Change: $62 per megawatt hour inclusive of Rex continues to benchmark very favorably with new generation alternatives, including solar battery and gas fired generation, let me be clear Steve out remains one of the most affordable sources of energy for our customers.

Bob Blue: Turning to the regulatory landscape, let me provide a brief update on our Virginia Biennial Review filing, which we submitted at the end of March. The filing highlights Dominion Energy Virginia's reliable and affordable service. If approved, this would be the company's first base rate increase since 1992. Additionally, over the past decade, the company's residential rates have increased at a rate approximately 40 percent lower than the rate of inflation.

Speaker Change: Turning to the regulatory landscape, let me provide a brief update on our Virginia Biennial review filing, which we submitted at the end of March the filing highlights Dominion Energy, Virginia is reliable and affordable service. If approved this would be the company's first base rate increase since 1992.

Speaker Change: Digitally over the past decade, the company's residential rates have increased at a rate of approximately 40% lower than the rate of inflation.

Bob Blue: Our filing also reflects a new proposed rate class for high-energy users, including data centers, as well as new customer protections to ensure those customers continue to pay their full cost of service and that other customer classes are protected from stranded cost. Protections include a 14-year contract commitment to pay for their requested power, even if they use less than requested. This is consistent with the concerns and recommendations expressed in the JLARC report last year and in line with proposals in other jurisdictions nationwide. The Commission's procedural schedule is shown on slide 13.

Speaker Change: Our filing also reflects a new proposed rate class for high energy users, including data centers as well as new customer protections to ensure those customers continue to pay their full cost of service and then other customer classes are protected from stranded cost protections include a 14 year contract commitment to pay for their requested power even if they use less.

Then requested this is consistent with the concerns and recommendations expressed in the J Block report last year and in line with proposals in other jurisdictions nationwide. The commission's procedural schedule is shown on slide 13.

Bob Blue: Separately, on March 3rd, Dominion Energy Virginia filed with the State Corporation Commission for a Certificate of Public Convenience and Necessity to construct and operate the Chesterfield Energy Reliability Center, a gas-fired electric generating facility as part of our all-of-the-above approach to energy supply. The roughly one gigawatt project, if approved, is expected to cost approximately $1.5 billion and be placed into service in 2029. The capital for this project was included in our most recent capital update.

Speaker Change: Separately on March 3rd Dominion Energy, Virginia filed with State Corporation Commission for certificate of public convenience and necessity to construct and operate the Chesterfield energy reliability Center, a gas fired electric generating facility as part of our all of the above approach to energy supply.

Speaker Change: The roughly one gigawatt project if approved is expected to cost approximately $1 $5 billion would be placed into service in 2029. The capital for this project was included in our most recent capital update.

Bob Blue: Turning to South Carolina, where policymakers in the House and Senate continue to evaluate potential energy legislation that addresses future generation needs of the state, permitting reform and regulated investment recovery. We're appreciative of the significant time spent to date by the legislature on this important topic. We see these efforts as supportive of our stated aim to contribute to the success of South Carolina's robust and growing economy. Overall, we continue to achieve constructive outcomes in all of our regulated service areas.

Speaker Change: Turning to South Carolina, where policymakers in the house and Senate continue to evaluate potential energy legislation that addresses future generation needs of the state permitting reform and regulated investment recovery. We're appreciative of the significant time spent to date by the legislature on this important topic. We see these efforts as supportive of our stated aim to contribute to the <unk>.

Speaker Change: SaaS of South Carolina is robust and growing economy.

Speaker Change: Overall, we continue to achieve constructive outcomes in all of our regulated service areas.

Bob Blue: Next on Millstone. The facility continues to perform well and provide over 90% of Connecticut's carbon-free electricity and 55% of its output is under a fixed-price contract through late 2029. The remaining output continues to be significantly de-risked by our hedging program.

Speaker Change: Next one millstone the facility continues to perform well and provide over 90% of Connecticut's carbon free electricity and 55% of its output is under a fixed price contract through late 2029. The remaining output continues to be significantly derisked by our hedging program.

Bob Blue: As many of you are aware, there's been recent legislative activity in New England, Rhode Island specifically, aimed at authorizing future additional procurements of nuclear power, and we've continued to engage with multiple parties there to find the best value for Millstone. In addition to state-sponsored procurement, we continue to evaluate the prospect of supporting incremental data center activity as well. We feel strongly that any data center options need to be pursued in a collaborative fashion with stakeholders in Connecticut.

Speaker Change: As many of you are aware theres been recent legislative activity in New England, Rhode Island, specifically aimed at authorizing future additional procurements of nuclear power and we've continued to engage with multiple parties there to find the best value for Millstone.

Speaker Change: In addition to state sponsored procurement, we continue to evaluate the prospect of supporting incremental data center activity as well.

Speaker Change: We feel strongly that any data center options need to be pursued in a collaborative fashion with stakeholders in Connecticut, we will provide updates as things develop.

Bob Blue: We will provide updates as things develop.

Bob Blue: Before I conclude my remarks, I'd like to take a moment to recognize Diane Leopold. As she announced late last year, Diane is retiring on June 1st. Today will be her last earnings call. Diane is one of the brightest, most dedicated, and most capable people in our company and in our industry.

Speaker Change: Before I conclude my remarks, I'd like to take a moment to recognize Diane Leopold as she announced late last year. Diane is retiring on June 1st today will be her last earnings call. Diane is one of the brightest most dedicated and most capable people in our company and our industry over 36 years in the utility business. She has demonstrated best in.

Bob Blue: Over her 36 years in the utility business, she's demonstrated best-in-class performance in virtually all areas of operations, business development, financial planning, and corporate Fortunately, Diane has trained a deep and talented bench to follow in her footsteps. It's been my honor and privilege to work with her for the last 20 years, and I know I speak for Steven, David, and the entire Dominion Energy team in thanking her and wishing her well in retirement.

Speaker Change: Class performance in virtually all areas of operations business development, and financial planning and corporate strategy as well as the construction of several multibillion dollar energy infrastructure projects.

Speaker Change: Fortunately Diane has trained a deep and talented bench to follow in her footsteps, it's been my honor and privilege to work with her for the last 20 years and I know I speak for Steven David and the entire Dominion energy team in thanking her and wishing her well in retirement.

Bob Blue: With that, let me summarize our remarks on slide 15 by reiterating where Steven began the call with a focus on our three priorities. Consistently achieving our financial commitments, continued on-time achievement of major construction milestones for the Coastal Virginia Offshore Wind Project, and achieving constructive regulatory outcomes that demonstrate our ability to work cooperatively with regulators and stakeholders to deliver results that benefit both customers and shareholders. We're 100% focused on execution. We remain committed to delivering reliable and affordable power for our customers.

With that let me summarize our remarks on slide 15 by reiterating where Steve and began the call with a focus on our three priorities consistently achieving our financial commitments continued on time achievement of major construction milestones for the coastal Virginia offshore wind project and achieving constructive regulatory outcomes that demonstrate our.

Speaker Change: Our ability to work cooperatively with regulators and stakeholders to deliver results that benefit both customers and shareholders were 100% focused on execution, we remain committed to delivering reliable and affordable power for our customers and with that we're ready to take your questions.

Operator: And with that, we're ready to take your questions. At this time, we will at any time. get to ask a question.

Speaker Change: At this time, we will open the floor for questions. If you would like to ask a question. Please press the star key followed by the one key on your Touchtone phone now if at any time, you would like to remove yourself from the question queue. Please press star.

Speaker Change: Again to ask a question at this time, please press star and one now.

Speaker Change: We will take our first question from Nick Campanella with Barclays. Please go ahead. Your line is open.

Nicholas Campanella: First question from Nick Campanella with Barclays. Please go ahead. Hey, morning. Thanks for taking my questions. I appreciate all the disclosures. Morning, Nick. Morning.

Nick Campanella: Hey, good morning, Thanks for taking my questions I appreciate all the disclosures.

Speaker Change: Good morning.

Steven Ridge: So, hey, I appreciate, you know, all the disclosure you kind of given on the CBOW project, especially as it kind of relates to tariffs. You know, as it relates to the turbines and your suppliers, is there anything that you can kind of shed light on in terms of your conversation with them that this tariff backdrop is not going to impact their ability to kind of deliver for you, you know, whether it's in your own conversations or just the delivery dates? You know, I know that you kind of highlighted that Siemens is making a lot of progress, but maybe you can kind of just expand on your overall confidence level there.

Speaker Change: Hey, I appreciate them all.

Speaker Change: The disclosure you kind of gave it on the on the SEDAR project, especially as it relates to tariffs.

Speaker Change: As it relates to the turbine and your suppliers can you is there anything that you can kind of shed light on in terms of your conversation with them that this tariff backdrop.

Speaker Change: Is that is not going to impact their ability to kind of deliver for you whether it's in your own conversations or just the delivery dates I know that you've kind of highlighted that Siemens is making a lot of progress.

Speaker Change: But maybe you can kind of just expand on your overall confidence level there.

Steven Ridge: Thanks.

Steven Ridge: I'll offer a couple of thoughts, and if Diane wants to add in, she should. She was over there just recently, and she promised she would actually answer all the questions today on our last earnings call. But our conversations with our suppliers are that they're all performing extremely well. And the ones who are most recently started, the one who has most recently started is Siemens Gamesa, and they are hitting their marks. They started on time. They're producing at the pace that we expected. And so we feel very, very confident about our ability to get the materials, the components that we need, and we've disclosed what the tariff impacts would be based on current tariff policy.

Speaker Change: Now I'll offer a couple of thoughts and if Diane wants to add and she said she was over there just recently and she promise you would actually answer all the questions today on our last earnings call but.

Speaker Change: Our conversations with our suppliers are that they are all performing extremely well.

Speaker Change: And are the ones who are most recently started the one who was most recently started as Siemens gamesa and they are hitting their marks they started on time, they're producing at the pace that we expected.

Speaker Change: And so we.

Speaker Change: We feel very very confident about our ability to get the materials.

Speaker Change: Components that we need and and we've disclosed what the tariff impacts would be based on current tariff policy. So really no no change to anything in terms of delivery schedules or ability.

Steven Ridge: So really no change to anything in terms of delivery schedules or ability. The only thing that I would add, all of the raw materials are already purchased, everything is in fabrication right now, and as Bob talked about, the Siemens Gamesa, which is the most recent equipment that's entering into fabrication, is actually a little bit ahead of schedule.

Speaker Change: Yes, the only thing that I would add all of the raw materials are already purchased everything is in fabrication right now and as Bob talked about the Siemens Gamesa, which is the most recent.

Speaker Change: Equipment is.

Speaker Change: Entering into fabrication is actually a little bit ahead of schedule the team, including myself and all of those facilities the nacelle blades.

Steven Ridge: The team, including myself, were in all of those facilities, you know, the nacelles, the blades, all of them two weeks ago, and everything is heading either on track or a little bit ahead of schedule, and deliveries are going to proceed in the coming weeks. Okay, great. That's helpful.

Speaker Change: All of them are two weeks ago, and everything is heading either on track or a little bit ahead of schedule and deliveries are going to proceed in the coming weeks.

Speaker Change: Okay, Great that's helpful and.

Steven Ridge: And, you know, just in terms of the monopiles, my understanding is that the season starts today. So just any update on whether you would be kicking that off immediately and what type of run rate you would expect through the next few months here for monopile installation? Yeah, today's the beginning of monopile installation season, and we're starting today. You know, just to offer a little context, if you think about the last four months, we've installed 60 transition pieces, an offshore substation and a jacket that supports a deep water export cable. So restarting monopile installation today is simply a continuation of the steady offshore progress we've been making since the project began.

Speaker Change: Just in terms of in terms of the motto pilots as my understanding is that the season starts today. So just any update on whether you would be kind of kicking that off.

Speaker Change: Immediately and what type of run rate you would expect through the next few months here for mono pilot installations.

Speaker Change: Yeah today as of the beginning of them on a pilot installation season, and we're starting today.

Speaker Change: You know just to offer a little context, if you think about the last four months, we've installed 60 transition pieces in offshore substation and a jacket that supports a deepwater export cable.

Speaker Change: So restarting them on a pilot installation today is simply a continuation of the steady offshore progress we've been making since the project began.

Steven Ridge: And in terms of run rate, I think we've talked before about the fact that, you know, we hit a pace once we sort of got the initial work done last monopile season, we hit a pace of about 25 a month. That's a pace we ought to be able to continue. Everything's weather dependent, obviously, but that that pace is quite achievable. Okay, great.

Speaker Change: And in terms of run rate I think we've talked before about the fact that.

Speaker Change: We hit.

Speaker Change: Pace once we sort of got the.

Speaker Change: Initial work Don last amount of policies and we hit a pace of about 25 a month.

Speaker Change: That's a pace.

We ought to be able to continue.

Speaker Change: Everything's weather dependent obviously, but that that pace is quite achievable.

Speaker Change: Okay, Great and Diane.

Nicholas Campanella: And, you know, Diane, congrats on your retirement. Thanks so much. Thanks. Appreciate that. Thank you.

Speaker Change: Diane Congrats on your retirement, thanks, so much.

Speaker Change: Thanks, I appreciate that.

Speaker Change: We'll take our next question from James Kennedy with Guggenheim Partners. Please go ahead. Your line is open.

James Kennedy: We'll take our next question from James Kennedy with Guggenheim Partners. Please go ahead. Your line is now open. Hey guys, good morning. We're just kind of continuing with the CEVA, I just wanted to ask more specifically maybe on the permitting backdrop. I guess, have you had any conversations or interactions at the state or federal level that give you a little bit more incremental comfort following the Empire Wind Order? Just any more color on the permit.

James Kennedy: Hey, guys good morning.

Speaker Change: Hi, James.

Speaker Change: Just kind of continuing with the fever I just wanted to ask more specifically maybe on the permitting backdrop.

Speaker Change: I guess have you had any conversations or interactions at the state federal level that gives you a little bit more comfort following the Empire wind order just any more color on the permitting side. Thank you.

Bob Blue: Yeah, I mean, James, our interactions with the agencies have continued the same way they have been for months. With the project of this, we're fully permitted, as you know, but with a project of this size, we check in regularly with agencies. We've continued those conversations with them. And for the reasons that we outlined in our prepared remarks, we feel very comfortable that this project is going to continue moving forward.

Speaker Change: Yes, I mean James.

James Kennedy: Our interactions with the agencies have continued.

Speaker Change: The same way they have been for months.

Speaker Change: With a project of this poor fully permitted as you know, but with a project of this size we check in regularly with agents.

Speaker Change: <unk> agencies, we've continued those conversations with them.

Speaker Change: And for the reasons that we outlined in our prepared remarks, we feel very comfortable that this project is going to continue moving forward.

Bob Blue: Okay, if there were a stop work order, can you give us like a general rule of thumb on like a daily standby or demobilization cost? Yeah, I think that's a very important question. Appreciate you asking.

Speaker Change: Okay. If their world stop work order can you give us like a general rule of thumb on a like a daily standby or demobilization costs.

Speaker Change: Yeah.

Speaker Change: I think that's a very important question.

Speaker Change: <unk>.

Speaker Change: Appreciate you asking we'd have to evaluate the specific facts and circumstances at the time and I can't speak to those because.

Bob Blue: We'd have to evaluate the specific facts and circumstances at the time. And, you know, I can't speak to those because I don't know what they are. But if it happened, we would be very transparent in addressing them. But we don't think it's going to be paused for all the reasons I gave in the prepared remarks. It's the fastest way to get 2.6 gigawatts on the grid to serve tech companies, defense and security installations, important American industries like shipbuilding. It's employing 2,000 people. Stopping it would cause energy inflation, specifically authorized by Virginia law. It has bipartisan support in Virginia, particularly the Hampton Roads congressional delegation.

Speaker Change: I don't know what they are but if it happened we would be very transparent and addressing them, but we don't think it's going to be pause for all the reasons I gave in the prepared remarks, it's the fastest way to get to six gigawatts on the grid to serve tech companies defense and security installations important American industries like shipbuilding it's.

Speaker Change: <unk> 2000 people stopping it would cause energy inflation, specifically authorized by Virginia law. It has bipartisan support in Virginia, particularly the Hampton roads congressional delegation. So it really doesn't make sense to talk about numbers for a pause or delay.

Bob Blue: So it really doesn't make sense to talk about numbers for a pause or delay. That said, these are prudently made investments. Utilities are entitled to recover prudently incurred costs. And that's certainly true here, subject to the cost sharing SEC order, obviously.

Speaker Change: That said these are prudently made investments Utah.

Speaker Change: Utilities are entitled to recover prudently incurred costs.

Speaker Change: And that's certainly true here subject to the cost sharing the FCC order obviously.

Speaker Change: Okay, Perfect and then just on the tariff scheme itself the plan has.

Bob Blue: And I just, on the tariff scheme itself, the plan has... Solar and storage spend as well. I guess just any kind of color as you're thinking about the tariff impacts there and Spend Profile Yeah, I mean, as we think about tariffs across our business, the impacts we're seeing are manageable. We've worked on our supply chain for some time. We have most of our suppliers, the vast majority of the materials that we procure are directly from U.S. suppliers. That is certainly true with our solar procurement. We've had for some time an effort to diversify our supply chain and drive supply chain resilience, a chunk of that would have come out of COVID as we started thinking about that.

Speaker Change: Some solar and storage spend as well I guess, just any kind of color as youre thinking about the tariff impacts there.

Speaker Change: Spend profile any changes yes.

Speaker Change: Yes, I mean, as we think about tariffs across our business the impacts we're seeing are manageable.

Speaker Change: The.

Speaker Change: We've worked on our supply chain.

Speaker Change: For some time we.

Speaker Change: We have most of our suppliers are the vast majority of the materials that we procure directly from U S. Suppliers that is certainly true with our solar procurement.

Speaker Change: We've had for some time and effort to diversify our supply chain and drive supply chain resilience a chunk of that.

Speaker Change: <unk> would have come out of Covid as we started thinking about that.

Bob Blue: We think about increasing inventory and ordering thresholds to address longer lead times, ensure that we have multiple sources of supply where it's appropriate. We have been placing some orders ahead of tariff effective dates to mitigate cost increases where it's possible. So those actions have enabled us to avoid some of the impacts. Obviously our first objective is to avoid impact and keep costs for customers low. So we find tariff costs generally across the business to be manageable. Excellent.

Speaker Change: We think about increasing inventory and ordering thresholds to address longer lead times and ensure that we have multiple sources of supply where it's appropriate and we have been placing some orders ahead of tariff effective dates to mitigate cost increases.

Speaker Change: It's possible.

Speaker Change: So those actions have enabled us to avoid some of the impact obviously, our first objective.

Speaker Change: Is to avoid impact and keep our cost for customers low. So we find a tariff cost generally across the business to be manageable.

Speaker Change: Excellent thanks, guys and congrats to Dan.

Nicholas Campanella: Thanks, guys, and congrats to Diane.

Speaker Change: And we'll take our next question from Steve Fleishman with Wolfe Research. Please go ahead. Your line is open.

Steve Fleishman: We'll take our next question from Steve Fleishman. Please go ahead. Your line is now open. Yeah, sure. Thanks. And I'll echo congrats to Diane job, job really well done.

Speaker Change: Yes sure.

Speaker Change: Thanks.

Speaker Change: I'll Echo congrats to Diane job job really well done and Tom.

Steven Ridge: And, Tom, sorry, no more sneaking junk food during so Just on the, I guess, first on the tariffs, the Just so we know in case they change the, are you, is the contracts basically shifting most of the tariff basically to to you, so if they go higher or they go lower, we can kind of try to gauge the impact. Is that kind of how generally the contracts work? Yeah, that's a fair characterization, Steve. Okay.

Speaker Change: Tom Sorry, no more sneaking junk food Darrin.

Speaker Change: Thanks.

Speaker Change:

Speaker Change: So.

Speaker Change: Just on the I guess first on the tariffs the.

Speaker Change: Just so we know in case they change the are you is.

Speaker Change: As the contracts basically.

Speaker Change: Shifting most of the tariff basically too.

Speaker Change: To use so if they go higher they go lower.

Speaker Change: We can kind of try to gauge the.

Speaker Change: The impact is that kind of how generally the contracts work.

Speaker Change: Yes, that's a fair characterization Steve.

Speaker Change: Hey.

Bob Blue: And then. Maybe just also, I know it's kind of governor election year, has any electric topics, kind of including CVAL, kind of been in the... in the political spectrum at all from either side. was part of that. Now. No, there has not been, in the gubernatorial race thus far, a discussion of CVOW or WEND. Generally, I will say that the lieutenant governor, who is the Republican nominee, was at our event, I don't know, a year and a half, two years ago, when the first monopile arrived in Tidewater at the port. The Democratic nominee, former Congresswoman Abigail Spanberger, has been supportive of offshore WEND as well, but it hasn't been a topic in the conversation.

Speaker Change: And then <unk>.

Speaker Change: Maybe just also I know, it's kind of a governor election year has has any electric topics kind of including <unk> kind of been in the.

Speaker Change: In the political spectrum at all from either side.

Speaker Change: As part of that.

Speaker Change: No.

Speaker Change: No there has not been a gubernatorial race, thus far our discussion of <unk>.

Speaker Change: Wind generally I will say that the lieutenant governor who.

Speaker Change: <unk> is the Republican nominee was at our.

Speaker Change: Events, I don't know year, and a half two years ago when the first mono pile arrived in.

Speaker Change: And tidewater at the Port.

Speaker Change:

Speaker Change: The Democrat.

Speaker Change: Democratic nominee former Congresswoman Abigail spam Burger has been supportive of offshore wind as well, but it hasn't been a topic in the conversation.

Steve Fleishman: Okay, and then I noticed on Chesterfield, the approval to gas plant, that's a billion five for a gigawatt plant, which is starting to look quite cheap right now is just want to make sure that's a good number. Yes, that's a good number. Okay. Alright, that's it for me. Thank you. Thanks, Steve.

Speaker Change: Okay.

Speaker Change: And then I noticed on Chesterfield.

Speaker Change: Approval of the gas plant.

Speaker Change: That's it.

Speaker Change: Five for a gigawatt plant, which is starting to look quite cheap right. Now is just wanted to make sure. That's a good number.

Speaker Change: Yes, that's a good number.

Speaker Change: Okay.

Speaker Change: Alright, that's it for me thank you.

Speaker Change: Thanks, Steve Thanks, Steve.

Speaker Change: We will take our next question from David Arcaro with Morgan Stanley. Please go ahead. Your line is open.

David Arcaro: Our next question from David Arcaro with Morgan Stanley. Go ahead, you're live.

David Arcaro: Hi, Thanks, good morning.

David Arcaro: Tony Pedeva I think if you could just give maybe a little bit more color on what... This is a question for the reporter, but just what is the interest level? Yeah, the demand remains very high, David, the... I would say that really no change from what we talked about on the last call. We've got a real focus in our service territory on sort of traditional cloud and inference demand from data centers, and there's no letup in their interest. And I guess the way I would characterize the timing is, as has been the case really since we started working with data center customers over a decade ago, giving us the most experience with those customers of anybody in the industry, they want to go fast, they always want to go fast.

Speaker Change: Good morning, David.

Speaker Change: I'm wondering if you could just give us maybe a little bit more color on what you're seeing in terms of data center demand.

Speaker Change: You mentioned that it is.

Speaker Change: It has kind of continued from last quarter, but just what is the interest level.

Speaker Change: From Hyperscale, there's any sense of just the scale and how far out I guess are these customers planning and looking to locate in your service territory.

Speaker Change: Yes.

Speaker Change: Demand remains very high David that the.

Speaker Change: I would say that.

Speaker Change: Really no change from what we talked about on the last call.

Speaker Change: We've got a real focus in our service territory on.

Speaker Change: Sort of traditional cloud and N, France demand from data centers and there is no let up in their interest.

Speaker Change: And I guess the way I would characterize the timing is as has been the case really since we started working with data center customers over a decade ago, giving us the most experience with those customers of anybody in the industry.

Speaker Change: They want to go fast they always want to go fast that's their business. It's always been their business, we've been effective at serving them.

David Arcaro: That's their business. It's always been their business. We've been effective at serving them thus far. Don't see any reason why that's going to change in the future. got it. And these are in there, I guess, planning out. well into the 2030s. Yeah, absolutely. I mean, if you look at just what they'd be ramping into from what they've already committed to, it takes you to that timeframe.

Speaker Change: Thus far don't see any reason why that's going to change in the future.

Speaker Change: Yep got it and these are in there I guess planning out into the well into the 20 <unk> at this point to just in terms of.

Speaker Change: Uh huh.

Speaker Change: Megawatts that they're planning and the expansions over time.

Speaker Change: Yeah, absolutely I mean, if you look at just what they'd be ramping into from what they've already committed to it takes you to that timeframe.

Speaker Change: Yes, absolutely.

Bob Blue: separately. progress or any further clarity around Yeah, no real news on Millstone.

Speaker Change: And then separately just was curious is there any progress or any further clarity around the millstone and the potential contracting opportunities there yes.

Speaker Change: No no real news on Millstone as we mentioned in the prepared remarks, Rhode Island.

Bob Blue: As we mentioned in the prepared remarks, Rhode Island, there's been legislative activity in Rhode Island, so there's interest. But we don't have an update on timing of when we might take some action with respect to Millstone. As you know, the current contract for 55% of the output goes through August of 2029. So we'll continue to work through that, but no news to report today.

Speaker Change: Then legislative activity in Rhode Island, So there is interest.

Speaker Change: But we don't have an update on.

Speaker Change: The.

Speaker Change: Timing of when we might.

Speaker Change: Take some action with respect to millstone.

Speaker Change: As you know the current contract for 55% of the output that goes through that.

August of 2029.

Speaker Change: So we will continue to work through that but no news to report today.

Speaker Change: Okay, great. Thanks, so much.

Speaker Change: Yeah.

Carly Davenport: We'll take our next question from Carly Davenport with Goldman Sachs. Hey, good morning. Thanks for taking the questions.

We'll take our next question from Carly Davenport with Goldman Sachs. Please go ahead. Your line is open.

Carly Davenport: Hey, good morning, Thanks for taking the questions maybe.

Carly Davenport: Maybe just a quick one on the biennial filing. You referenced before the special rate structure proposed for high energy users. Can you just talk a little bit about that structure and just sort of based on your conversations with data center customers over time on the terms of an agreement, if you feel like that sort of reflects customer appetite in terms of the term length and some of the other specifics? Sure. Thank you. Yeah, so you're talking about the 14-year contract term? Yep, exactly. Yeah, so just broadly, what the filing does is it creates a new rate class for customers with either measured or contracted demand of 25 megawatts or greater and either a measured or expected load factor of at least 75 percent.

Carly Davenport: Maybe just a quick one on the biennial filing you you referenced before the special REIT structure proposed for high energy users can you just talk a little bit about about that structure and just sort of based on your conversations with data center customers over time on the terms of an agreement if you feel like.

Carly Davenport: That sort of reflects customer appetite in terms of the term length in some of the other specifics yes.

Carly Davenport: So you're talking about the 14 year contract term, yes, exactly yeah. So just broadly what the filing does is it creates a new rate class.

Carly Davenport: For customers with either measured or contracted demand of 25 megawatts or greater and either measured or expected load factor of at least 75%. That's about 100 and this is in a contiguous site that's about 139.

Carly Davenport: That's about 100, and this is on a contiguous site. That's about 139 customers, about 131 data centers within that. And the sort of focus of that class is on minimum demand charges, so the higher of either contracted or actual usage, the minimum demand charge would be 80 percent for transmission distribution, 60 percent for generation. And then for new customers, that would be the 14-year contract period. It's a four-year ramp schedule into that. This is just to provide transparency and clarity around those customers, ensuring that sort of addressing the thoughts around paying their fair share and to reduce the risks of stranded assets.

Carly Davenport: Customers about 131 data centers within that.

Carly Davenport: And the sort of focus of that class is on minimum demand charges. So the hire of either contracted or actual usage the minimum demand charge would be 80% for transmission distribution and 60% for generation and then four.

Carly Davenport: New customers that would be the 14 year contract period with a four year ramp schedule into that.

Carly Davenport: Just to provide transparency.

Carly Davenport: And clarity around those customers.

Carly Davenport: Ensuring that sort of addressing.

Carly Davenport: The thoughts around ensuring that they are paying their fair share.

Carly Davenport: And to reduce the risk of stranded assets, we've already had provisions in place for a lot of that but this enhances them.

Carly Davenport: We've already had provisions in place for a lot of that, but this enhances them. We've talked with the data center customers. We talked with them in preparing this proposed new tariff. I'm sure there will be further conversations during the case, but I think I can say confidently they understand what we're looking to accomplish here, and the conversations have been very constructive.

Carly Davenport: We've talked with the datacenter customers, we talked with them and preparing this proposed new tariff.

Carly Davenport:

Carly Davenport: I'm sure there will be further conversations during the case.

Carly Davenport: But I'm I think I can say confidently they understand what we're looking to accomplish here and the conversations have been very constructive.

Carly Davenport: Great, appreciate that color. And then maybe just a quick follow-up on the earlier question, just on your conversations with data center customers. Are you seeing any change in tone or concern just around the broader economic uncertainty that we've seen and any sort of pause, perhaps, in some of the new projects that you're expecting to move forward? The short answer to that question is no, we're seeing continued appetite for additional data center capacity in our service territory.

Carly Davenport: Great I appreciate that color and then maybe just a quick follow up on the.

Carly Davenport: The earlier question just on your conversations with data center customers are you seeing any change in tone or concern just around the broader economic uncertainty that we've seen in any sort of pause perhaps.

Carly Davenport: And some of the new projects that youre expecting to move forward.

Carly Davenport: The short answer that question is no.

Carly Davenport: We're seeing continued appetite for additional data center capacity.

In our service territory.

Carly Davenport: Great, thank you for the time.

Speaker Change: Great. Thank you for the time.

Carly Davenport: Yeah.

Anthony Crowdell: Let's take our next question from Anthony. with Mizuho, please go ahead. Hey, good morning, team. Just two quick questions. One, I think, slide 20, residential sales, look soft this first quarter. I just don't know if you could provide some clarity around that, and then I have a follow-up.

Speaker Change: We'll take our next question from Anthony crowd, well with Mizuho. Please go ahead. Your line is open.

Anthony Crowd: Hey, good morning team just two quick questions. One I think slide 20 residential sales look look soft this first quarter just wondering if you could provide.

Speaker Change: Provide some clarity around that and then I have a follow up.

Steven Ridge: Hey Anthony, it's Steve. Yeah, overall, our LTM Q1 sales are actually have been very good for us. It's it's trending slightly higher than our annual guidance, largely driven by really strong sales across the commercial segment, which includes data centers, but also other commercial customers. We don't think that the slight weakness in residential is going to continue for the rest of the year. We'll watch that pretty carefully. But overall, I think we're actually really happy with what direction sales are going. And we'll provide additional information on that as we get through more quarters. But overall, I think the sales picture for our service territories continues to look really strong.

Steve: Hey, Anthony it's Steve.

Steve: Yeah overall, our LTM Q1 sales are actually have been very good for us. It's it's trending slightly higher than our annual guidance largely driven by really strong sales across the commercial segment, which includes data centers, but also other commercial customers.

Steve: We don't think that the slight weakness in residential is going to continue for the rest of the year, we'll watch that.

Steve: Pretty carefully but overall I think we're actually really happy with what with direction sales are going.

Steve: And we will provide additional information on that as we get through more quarters, but overall I think the sales picture for our service territories continues to look really strong.

Anthony Crowdell: Great.

Steve: Great and if I could follow up on <unk> question on the biannual review.

Steven Ridge: And if I could follow up on Carly's question on the buy-in and review, particularly with the request of the new tariff for the large load customers. You guys have clearly gone through multiple buy-in and reviews. Is this making approval this maybe more complicated by introducing a new tariff or from all your meetings prior to filing and talking to the parties that maybe even helping it out, getting the tariff approved? I think it would be hard to say it's either helping it out or making it more complicated. The focus on rate classes and cross-subsidies among rate classes is something that has happened since the beginning of rate cases, so not a surprise.

Steve: With the.

Steve: We have requested the new tariff with a large load customers you guys have clearly gone through multiple by any of our views is just making approval. This may be more complicated by introducing a new tariff or from all your meetings prior to filing in talking to the parties that may be even helping it out getting the tariff approved.

Speaker Change: Yeah, I think it would be hard to say, it's either helping it out or making it more complicated.

Speaker Change: The focus on.

Speaker Change: Rate classes and cross subsidies among rate classes is something that has happened since the beginning of rate cases so.

Speaker Change: Not a surprise I don't think that it would be in this case.

Steven Ridge: I don't think that it would be in this case. So I wouldn't say that it really affects the nature of the ability to resolve this case one way or the other.

Speaker Change: So I don't I wouldn't say that it really affects the nature of the ability to resolve this case, one way or the other.

Anthony Crowdell: Great, thanks for taking my questions.

Speaker Change: Great. Thanks for taking my questions.

Anthony Crowd: Thanks Anthony.

Durgash Chopra: We'll take our next question from Durgash Chopra. Coriaceous. Go ahead, your line is open. Hey, good morning team. Thank you for giving me time.

Speaker Change: We will take our next question from <unk> Chopra with Evercore ISI. Please go ahead. Your line is open.

Speaker Change: Hey, good morning team. Thank you forgive me time.

Durgash Chopra: And my prayers also with Thanks to Ryan's family, we're very sad to hear about that. Just quickly. 2025 first quarter EPS. came in maturely above our expectations. Just, you mentioned some. Commentary around, you know, enough, you know, conservatism in the guidance, just just kind of thinking through how Quarter Earnings Track. your own expectations for the rest of the year? Yeah. Yeah, that's a really good question. I'd say very modestly above where we were expecting. Certainly, we didn't have three cents of weather baked in. We also didn't have two cents of better than expected sales baked in, which gets back a little bit to Anthony's question about overall trending for sales growth.

Speaker Change: My prayers also would too.

Speaker Change: Your line is currently very very sad to hear about that.

Speaker Change: And then.

Speaker Change: Just quickly.

Speaker Change: Quickly, Steve 2025 first quarter EPS.

Speaker Change: Anything materially above our expectations, just you mentioned some.

Commentary around.

Speaker Change: Conservatism in the guidance.

Speaker Change: Looking through the <unk>.

First quarter earnings drag versus your own expectations.

Speaker Change: Yeah.

Yeah, that's a really good question.

Speaker Change: I'd say very modestly above where we were expecting certainly we didn't have three sense of whether baked in.

Speaker Change: It didn't have to sense of better than expected sales baked in which gets back a little bit to anthonys question about overall trending for sales growth.

Steven Ridge: But, you know, I point folks to Schedule 4, where we give a quarter over quarter growth reconciliation. Let me spend just a second walking through sort of the key drivers. We're at 55 cents in Q1 2024. Obviously that was before we had completed the entire business review, but a lot of it was clean. Since then, relative to that quarter, we had about $0.08 of weather help. So I mentioned $0.03 of better than normal. We also significantly underperformed weather during the first quarter of 2024. So that's on the schedule. I mentioned sales. We've done about $0.04 better on sales.

Speaker Change: But I would point folks to schedule four we give our quarter over quarter growth.

Speaker Change: Reconciliation, let me spend just a second walking through sort of the key drivers we were at 55 cents.

Speaker Change: In Q1 2024.

Speaker Change: That was before we had completed the entire business review, but a lot of it was clean.

Speaker Change: Since then relative to that quarter, we had about eight cents of weather helps so I mentioned three cents a better than normal we also significantly underperformed weather during the first quarter of 2024, so that's on the schedule.

Speaker Change: <unk> sales, we've done about four cents better on sales.

Steven Ridge: We had about five cents of help this quarter from rate cases that occurred later in the year of 2024, so it wouldn't have been captured in the first quarter. uh... net net net we had about eight cents of regulatory rider investment growth and the reason i say net net is because it'll show up at sixteen but we sold half of that growth under the non-controlling interest on cval to stone peak so net is eight cents help there we had about eight cents of interest expense help that's largely the impact of debt repayment the full sort of force of the debt repayment from uh...

Speaker Change: We had about five cents a help this quarter from rate cases that occurred later in the year of 2024. So it wouldn't have been captured in the first quarter.

Net net net we had about eight cents of regulatory rider investment growth and the reason I say net net is because it'll show up in 16, but we sold half of that growth under the noncontrolling interest to see on C. Vow to stone peaks. So net is eight cents help there we had about eight cents of interest expense helped that's largely the impact of debt repayment.

Speaker Change: The full sort of force of the debt repayment from the.

Steven Ridge: the majority of the business review asset sales there's about six cents of tax help quarter-over-quarter so two of that have to do with the production tax credit for nuclear sales that's just shaping uh... two of it had to do with rng forty-five z which we didn't have last uh... year to have had to do with the a small uh... south carolina uh... tax matter there was a resolution in a court case that we ultimately hadn't budgeted so that was a little bit of an unanticipated help as well and they're sort of you know that there's about negative one cent of miscellaneous items in there so i'd say uh...

Speaker Change: The majority of the business review asset sales Theres about six cents of tax help quarter over quarter. So two of that has to do with the production tax credit for our nuclear sales that's just shaping.

Speaker Change: Two of it had to do with RMG 45, Z, which we didn't have last year two they had to do with the small South Carolina.

Speaker Change: Tax matter there was a resolution in a court case that we ultimately hadn't budgeted so that was a little bit of an unanticipated help as well and then there is sort of you net all of that and there was about negative one incentive miscellaneous items in there.

Speaker Change: So I'd say again, whether sales a little better than we expected we've gotten some timing on tax and O&M that I think will normalize through the rest of the year. So we're sticking right now with our original guidance range targeting that midpoint of $3.40.

Steven Ridge: again weather sales little better than expected we've gotten some timing on tax and on and that i think will normalize to the rest of your so we're sticking right now with our original guidance range targeting that midpoint of three dollars and forty cent uh... and if we get the point in the future where we feel like we should revise that will will go ahead and do that but for now early in the year off to a good start we're very focused on hitting those numbers and to the extent we have an opportunity to de-risk future years uh...

Speaker Change: And if we get to the point in the future, where we feel like we should revise that we'll go ahead and do that but for now early in the year off to a good start we're very focused on hitting those numbers and to the extent, we have an opportunity to de risk future years. As a result of strong 2025 performance. We would think about doing that as well. So we will we'll have more information as we worked through the <unk>.

Steven Ridge: as a result of strong twenty twenty five performance we would think about doing that as well so will we'll have more information we work through the year but feeling really good about the plan Thanks Steve, that was very thorough. Sounds like modestly ahead of your expectations.

Speaker Change: Year, but feeling really good about the plan.

Speaker Change: Thanks, Steve.

Speaker Change: Carl.

Speaker Change: Modestly modestly ahead of expectations Okay.

Steven Ridge: Okay, Diane, we'll miss you on the field trips, Diane. Good luck to you. I'll miss it too.

Speaker Change: We'll miss you on the field trips and good luck to you.

Speaker Change: I will miss it.

Speaker Change: Yes.

Speaker Change: And we'll take our next question from Jeremy Tonet with J P. Morgan. Please go ahead. Your line is open.

Jeremy Tonet: our next question from Jeremy Tonet with Hi, good morning. Morning, Jeremy.

Jeremy Tonet: Hi, good morning.

Speaker Change: Morning, Jeremy.

Bob Blue: And Diane, echo the comments before me, I wish you well in retirement. And maybe just starting off, if you could provide any updates on the outlook for PGM finalizing network cost upgrade. I'm just wondering if there's any thoughts whether tariffs or general inflation might drive upward cost pressure? Yeah, on the PJM network upgrades, that specific, you're asking? Yeah. I wouldn't expect to see that. And we don't have additional information beyond what we provided on the last call. As we said then, we had better information than we did before, but not perfect. And that continues to be true now.

Speaker Change: And Dianne Echo the comments before me I wish you well in retirement here.

Speaker Change: Thanks, Jeremy.

Speaker Change: Maybe just starting off if you could provide.

Speaker Change: Any updates on the outlook for PJM finalizing network cost upgrades.

Speaker Change: Just wondering if theres any thoughts where the tariffs are general inflation might drive upward cost pressures here.

Speaker Change: Yeah on the PJM network upgrades that specific you are asking.

Speaker Change: I wouldn't expect to see that and we don't have additional.

Speaker Change: Information beyond what we provided on the last call as we said then.

Speaker Change: We had better information than we did before but not perfect.

Speaker Change: And that continues to be true now we'll get the final number in July.

Bob Blue: We'll get the final number in July, and we certainly don't expect it to be either up or down in the magnitude that the shift was the last time. But we'll know more in July. Got it. Thank you for that.

Speaker Change: We certainly don't expect it to be either up or down in the magnitude.

Speaker Change: That shift was the last time.

Speaker Change: But we'll know more in July.

Speaker Change: Got it thank you for that and Transferability has been a big focus in the market, whether it's repealed and his impact on on plans is there any thoughts that you could share there.

Bob Blue: And transferability has been a big focus in the market, whether it's repealed and has impact on plans. Is there any thoughts that you could share there?

Bob Blue: Yeah, Jeremy, at the risk of being too thorough in my response, let me give a little color there. So our plan has, on average, from 2025 through 2029, has on average about $175 million of transferred tax credits each year. What really tips us into transferability are the PTCs generated by our share of the offshore wind project. I guess the silver lining with that is that, to the extent there were a change in transferability, that makes tax equity a reasonably efficient way of replacing sort of the time value of those tax credits. So we feel pretty good about where we're positioned on that.

Yes, Jeremy at the risk of being to throw in my response.

Speaker Change: Let me give a little color there. So our plan has on average from 22025 through 2029 has on average about $175 million of transferred tax credits each year.

Speaker Change: What really tips us into transferability or the PTC is generated by our share of the offshore wind project I guess, the silver lining with that is that to the extent there were a change in transfer ability that makes tax equity are reasonably efficient way of replacing sort of the time value of those tax credits. So we.

Speaker Change: So pretty good about where we're positioned on that I feel like if there were a change we would have a pretty effective michigan, but something we're watching pretty carefully too.

Bob Blue: I feel like if there were a change, we'd have a pretty effective mitigant, but it's something we're watching pretty carefully, too. Got it. Thank you very much.

Speaker Change: Got it. Thank you very much and one last one if I could just with regards to <unk>.

Bob Blue: And one last one, if I could, just with... I'm thinking about the ATM with regards... be risking 26 equity needs possibly earlier in 2020. Yeah, we've been aggressive with our financing plan in 2025 to take capital raising off the table in a pretty significant way. You can see that from the financing plan. That was the philosophy behind the ATM is getting in front of it at a pretty attractive price. Without giving sort of specific guidance, it's absolutely something we would continue to think about is opportunistically finding ways to de-risk future financing. That could include getting to the market for ATM that would be settled at the end of 26, for instance, sooner rather than later.

Speaker Change: Thinking about the ATM with regards to Derisking 26 equity needs, possibly earlier in 'twenty five.

Speaker Change: Yeah.

Speaker Change: We've been aggressive with our financing plan in 'twenty five to to take <unk>.

Speaker Change: Capital raising off the table in a pretty significant way you can see that from financing plan that was the philosophy behind the ATM is getting in front of it at a pretty attractive price.

Speaker Change: Without giving you specific guidance, it's absolutely something we would continue to think about is opportunistically finding ways to derisk future financing.

Speaker Change: That could include getting into the market for ATM that would be settled at the end of 'twenty six for instance, sooner rather than later, it's an option available to us it's nice.

Bob Blue: That's an option available to us. It's nice. And so, yeah, your point's well taken. We'll take those steps opportunistically as the market warrants. Got it. Thank you for that.

Speaker Change: And so your point's well taken we will take those steps are opportunistically as the market warrants.

Speaker Change: Got it thank you for that I'll leave it there.

Bob Blue: I'll leave it there.

Speaker Change: Thanks.

Bob Blue: And this concludes our question and answer session. So I'll turn the call back to Bob Blue for closing remarks.

Bob Blue: This concludes the question and answer session, so I'll turn the call back to Bob Blue for closing. Thanks everybody for taking the time to join the call today and enjoy the rest of your day.

Bob Blue: Thanks, everybody for taking the time to join the call today and enjoy the rest of your day.

Bob Blue: The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.

Operator: The conference has now concluded.

Operator: Thank you for attending today's presentation and you may now disconnect.

Bob Blue: Uh-huh.

Bob Blue: Hum.

Bob Blue: [music].

Operator: © The Bulletproof Executive 2013 © The Ultimate Parody Site!

Bob Blue: Mhm.

Bob Blue: Uh huh.

Bob Blue: Hum.

Bob Blue: Okay.

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Bob Blue: Okay.

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Bob Blue: Hum.

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Bob Blue: Uh-huh.

Bob Blue: [music].

Bob Blue: Okay.

Bob Blue: [music].

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Bob Blue: Uh-huh.

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Bob Blue: Hmm.

Bob Blue: Okay.

Bob Blue: Uh-huh.

Bob Blue: [music].

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Bob Blue: Okay.

Bob Blue: Yeah.

Bob Blue: Hum.

Bob Blue: Okay.

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Bob Blue: Yeah.

Bob Blue: No.

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Bob Blue: Yeah.