FirstEnergy (FE) 2 Nov 202020 Q3 Earnings call transcript

Greetings. Welcome to FirstEnergy Corporation Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. pleasure Investor your Relations my Vice Irene now of President for is to host, introduce Prezelj, It FirstEnergy Corp. you. Thank Ms. may you begin. Prezelj,

Good expectations various the that results statements in factor such attention of can to I by Today, morning, Investors indicated X-K, prospects. uncertainties. on These Earnings and section earnings, welcome new that Factors website found Link quarter based would those the and subject in everyone call. our we the under on risk to from to included are to a earnings and current your performance, our strategies our this be actual we filed are filings. statements differ is could forward-looking also third Information call make cause statements SEC morning. materially regarding and revenues, will and risks

measures. the discuss financial along FirstEnergy Acting also with non-GAAP Chris measures certain call Jon Vice in Pappas; supports Steve and President Officer, include our be Chief today's Senior will Investor Taylor. found can Chief non-GAAP Executive and Strah; We between the Director, presentation, discussion. today's on Financial financial Officer, GAAP Participants Executive and website which Relations Reconciliations

to We session. also several join other us available have for Q&A the executives

S.A. XXXX For President been not the in Officer those and and of of know you Chief who has turn independent as Trinseo an now XXXX, of retired do I'll over he member Chris, to he FirstEnergy since Executive it Board Chris.

announced leadership the efforts. everyone. to company last out with participate Board's today's going in good the start my and and to company role morning, the call. discussing Irene, I governance appreciate week, you, opportunity the the Thank by I'm transition

with subpoena Enforcement, customer investigation number the investigation Related received SEC of will the that we X. to Division SEC. cooperating we responding lawsuits, a from DOJ in note to shareholder and and by the the the First, DOJ prompted SEC the September are we are also on and I a the of FirstEnergy

House course policies the that to review During of internal regarding of committee policy conduct. and Bill conduct matter X, done have When that review take have FirstEnergy government investigation violated the action, determined code no its with senior the how a related our independent certain Board our we that of three executives the is we ongoing values, what individual, duty is and inconsistent here. employee to the determined and we

along a including XXXX serious to for Board be new to in matter External our of and my assess quickly I In his President, a and changes the management. committee Senior Don Vice part appropriate has remain work company's engage Product procedures. immediately. communities, enhanced to Director. FirstEnergy's will roles He and and a Senior effort customers, President formed As FirstEnergy forward. look a will closely our also of independent is work strategy audit that Affairs with independent employees, the of investment announced I the Strah, President Vice She Marketing of joined all respected audit The as way, CFO to customer-focused result, initiatives, knowledge This company, you CEO, highly XXXX as policies governance who team's community Board Jones, of FirstEnergy's going appointed Vice management compliance including with his CFO forward member, demonstrated all a value for governance full Chack, the supported previously tenure President internal to and address as to for help Executive Development, development external terminated were on engage Dowling, strategic retired and of recent shareholders. him with this This controls to stakeholders, as at experience. support Board is execution many assist of a in Misheff, execution role, as practices. and this Mike with expertise already experience, Steve his outside Leslie and the and order to stakeholders, Board delivering review of appropriate the President, of FirstEnergy and Company. Board, implement company's member In our Counsel of various Chairman Senior oversight commitment long-term compensation Steve Turner. roles and and ordinary-course the the role. conducting to company's became also leadership subcommittee and will process. in Non-Executive committees. working role Steve Thursday effective and and Chuck Dennis including operational succession an with and audit management, potential Hershey the Corporate with new planning closely of member as the this a as as of and In his has Branding, and in Board of the processes led look Steve and know has was is May, is subcommittee growth areas support FirstEnergy's business of in timely This CEO. President and the Board by best the effective from in Secretary acting program. Leslie deep for improvement our new General significant credibility executive and Concurrently, the

investigations. cooperate As I continue DOJ to previously SEC the will we and mentioned, with and have

additional day-to-day. taken, the reached addressing running management focus We and key business the represent actions enables including out leadership. on the and step these agencies, union banks, company’s have continue also towards to to Board FirstEnergy’s We believe legislators, stakeholders, regulators, matters an to ratings the has

regulated the strong intact. expectations full-year. results available That performance distribution It with are continues and drivers over year-to-date a large company's at the several has the delivering is and ago becoming and working foundational strategy organization years, through the been substantial company few FirstEnergy that businesses. years continue. the the on last strategy The and embarked for to fully will excellent FirstEnergy both opportunities and transmission grow the in

we ensure and has a the to that, and the Steve strategy. to As over transition team's it to now full Board execute Steve. ability the ahead, continue confidence company to seamless With I'll the look of in turn rest

We The Thanks, have my good I committed everyone. morning, Board to stronger and were an company's and faced agree assess new years team under In to have and potential with begin Chris, address changes, program. that and to assumed taken dedicated circumstances. compliance our additional take matter. Board as role a serious Directors working this I different week preferred immediately. XX last more will are addressing implement by the actions step is have appropriate the Well challenges and this would absolutely our necessary company, with even Chris to important the we always the matter, and with management my to this as mission. with we emerged we towards changes and and of have

Jon to other review our working to I me Our forward initiatives. the this momentum. and am management our focused on we to transition I then confident team matters. continue strong, growth will reliable keeping and update to will operations to that, that remains our our XXXX regulatory enter each finish With plan, customers and providing out safe, on year activity, let with executing service other with brief achieve our results carry team this. financial recent a and look

our structure billion Those impact protocols, $X trends extremely complete the customers' rate per continue and I pandemic-driven hard business of regulated to employees economy, implementation and $X.XX on crisis. While favorable proud model results our in together second pace the investments quarter and year, operating primarily our throughout this with our have reflect the the on This reported pandemic successful system our a provide of resiliencies of above than earnings work of our more range. we share, top-end continues across strategies continuation to lives noted to the work and the third our guidance of stability. our remain demonstrated am we call. growth load We customer-focused morning, and quarter weather $X.XX this

from As of couple are per be $X.XX offset expect strong customers, the of discuss industrial expectations commercial for weather-adjusted If Jon the to in detail, range. Bill our near the usage than year-to-date that decoupling would guidance more lower next $X.XX range sales residential our to X and repeal, on $X.XX Based sectors. of we to share, and the earnings in is closer impact months, affirming be midpoint. House a and currently the performance top-end share our more we the will of part per higher

for higher from pandemic, the approximately of impacts have storm are future operations million including to most XXXX costs approximately $XXX $XXX with our of flow reflect costs funds million, updated and of which for deferred associated recovery. forecast cash of We higher the uncollectibles and free

affirming and equity address annually created taking Although, will to uncertainty, are XXXX to are current week objective. some create uncertainty in along through the in XXXX. this by that plan present government may our of to expected we X% With the investigation. with X% $XXX X% XXXX to additional X% CAGR challenges and investigations we to situation mindful that million the the to Jon past said, are meet our tactics address of events additional through up extending this issue and XXXX we

distribution then Creek an be also $XXX our of the the infrastructure X.XX the rate If for across our with years. interest were includes from storm deferred JCP&L’s JCP&L Now pandemic. assist with we over agreed Generation increase begin the costs. annual regulatory late well settlement AMI providing let's parties in approved the liabilities, approved, of cost million totaling sale JCP&L, incurred gains the implementation in Yards BPU filed Utilities distribution November used regulatory recovery settlement X.X%. the agreement that beginning and over to Jersey, at as August. of week, the Yards of of last plan case, net electric will Board customers a turn an Storage revenues amortization X. very delay XXXX, on million million the pleased to reduce to New facility. sale offset New our meters reliable would The million rate The the rate our Public Jersey Creek service based a the associated previously Prior to safe with the asset settlement as and during costs customers, territory the three-year also for the storm $XX Also of in JCP&L In provides through recovery be $XX in at The X, increase for past Pumped ROE smart XXXX. includes implementation in few regulatory estimated base to along increasing installing related Hydro until interest period, matters. It JCP&L in will an service we beginning increase that January of approximately

the next close to Yards Creek expect the transaction months. We within few

Finally, assets formula zone last Edison Maryland, assets This the to we territory our filed an territory Power commitment customer-focused Virginia, the Virginia. with to to application in transmission in in rates. Potomac West move Pennsylvania, includes the forward-looking transmission transmission investments, continue in Power to System West FERC West in and and Mon territory the Penn Power week Virginia, Allegheny

requesting date We effective are an X, January XXXX. of

to In next of transmission closing, this I'll over necessary I working created transmission disappointing Keystone date moving for to In I the several Edison And And standalone rate Jon a the company, transmission January our and we a strategy to the in new to affiliate, we forward-looking arrived week footprint. from to program. West new over and construction you growth I'd and it only management in the filings make And plan the with to accommodate not reiterate and but your Potomac an of filed am Penn is this is find It KATCo. certain X, are working that it that to have now, the Transmission formula to Taylor XXXX. point, at it addition, establish Board lead I turn Appalachian for KATCo address Directors in review. requesting we last compliance We is Board this financial Company, time. Power months, out confidence, Thank we like of new for while of the strong. forward. the assets to transfer effective or great changes committed management full committed company team, our to the have support together it. regulated to

Steve, and everyone. morning, Thanks, good

on detailed information reconciliations quarter the be other highlights As always can document and and about in all found strategic website. the financial our

of disclosure. filed provide in our appropriate closing to our company could us violations more our While we or we noted framework the the call, and week policy one as traditionally we ensure it by don't certain in file to lead material terminated expect executives we and controls conduct XX-Q with procedures reevaluate to Also, Friday's the as caused identifying we that X-K, code of this to has review connection weaknesses. continue and

our However, financial of per expect quarter to and GAAP we results. share. do review we earnings morning, based any This issues, not operating impact prior on third $X.XX of these reported period

As Cooling normal the days our compared usage year. guidance weather. above of the relatively with deliveries as our of weather-adjusted the above the pandemic. to trends residential compared rider industrial the on Steve third capital our were growth quarter months, revenue of of degree X.X% Gas. In on to the weather-adjusted period regulated in showing people growth Distribution $X.XX result well an incremental higher due spend noted, as sector compared Ohio a In and basis. approximately the of as was earnings the class, same basis Pennsylvania. our and to quarter ongoing seen XXXX investment top-end Total benefits third success the XX and last to weather-adjusted decreased quarter customer earnings third third in load sales third distribution by footprint revenues Consistent and of for flat quarter increased continue XX% compared residential XXXX, X.X% increased work-from-home past and commercial were the strategy, operating the in reflecting compared to driven the a the both largely weather-adjusted from programs actual Shale and decreased basis only range, to our period on we've class, business, quarter more XXXX. time to last XXXX decreased as to sales home many at same X.X% to Total a year, the of

more earnings the that segment, the tax the the to by mark-to-market Corporate the results in in third benefit will a growth higher revenue increased offset our than our compared XXXX. reflect energizing XXXX in our quarter and discussed the a OPEB quarter and our third volumes industrial adjustments. third primarily the load of costs higher were of In Based business, Pension as associated X.X% asset perspective. quarter rate of to XXXX. benefits flat the the decrease quarter, transmission a fourth of XX we commercial, loss of initiative And on make As and last our In net X%, financing million between adjustment future earnings an were we returns million. to recognized with absence be transmission through residential to discount quarter, to the from $XXX offset after-tax September gain from ranging compared $XX we estimate of tax annual the

return this X.X% our As status is funded of item. a X.X% assumption our on reminder, versus XX%. assets remains Year-to-date, a our and at is non-cash

within to to As forward. agencies and discuss the Chris week leadership proactively mentioned, we out transition path our reached three last the rating

Corp in Factbook. understand credit other investment and provided Investor all grade Moody's. are their FirstEnergy while details FE which or governance that are and remain the there the grade ratings. impact not fundamentals numerous Fitch at remains rating assessment, investment ratings. taken our S&P, certain the While with have strong, their agencies remain all grade issue-level transmission, both agencies and ultimately Corp at at consider factors in actions the have investment we risk subsidiaries we At we FE the business believe we The of management

forward. chart the in will and we dialogue contact our each them close our We remain with to maintain continue open with of path as agencies

changes the Finally, uncertainty review address by created considerations I'll to investigations. other we a making minutes to are tactical the financial take few and

have we December facilities liquidity to we continue I'll borrow can necessary billion warranties credit representations $X.X through to These covenants remain with and access committed all with of First, borrowed, you remind substantially and that undrawn the XXXX. funds. are million perspective, to facilities compliance only a from and new $XXX make in

announced around years XXXX, expectations XX% alignment by ratio comments quarterly In debt about paid few the XX% to share for share company holding have make refine HoldCo. to the EEI, debt increase to operating want to reaffirm policy. and I per total we for at FirstEnergy Board payout those targeted in Two debt, expect XXXX. XXXX, To at our plans the our and dividend we then adjusted a with raised no our a in dividend paid payout addition, earnings. of that policy, remain In we ago of of dividends $X.XX our by per $X.XX and XX% further for

Given O&M be our tactical $X.XX for XXXX developing quarterly and for programs This XX% share, necessary. plans Board CAGR Equity expect is $X reductions base would an review to per and basis plan. ratio for on expenses reductions to if at be to on our the a share overall next a a dividend our will to programs capital a $X.XX we’ve basis. our to midpoint XXXX, for continue quarterly a respect financing CapEx to payout consider levels, current operating hold X%, flat level, billion of our With continues dividend XXXX the overall if perspective, will represent annualized necessary. The part From to our soon of will our we began or at yield per approximately year. we XXXX.

to $XXX put to we financially the necessary flexibility provide possible. uncertainty And to as As reaffirming Steve the the in million position will annually and in we plan prudent in believe best and near-term. issue our company said, this are actions We we these the are take in to face weather up XXXX XXXX. uncertainty steps equity

comments. more few Chris back Q&A, we begin a Before I'll it turn to for

will want few it refer towards this to The earlier other I ongoing, we you points. related move are we related prepared summarize and to questions. investigation answer matters any to our than morning, to a questions and have this questions therefore, As many know remarks. not and I to answers

provide at and of Leslie as Board The led by will committee, audit more management We are matter, management immediately. time. and the newly well our this view this going and as internal important this subcommittee not to appointed Turner, information a serious audit address as and

uncertainty outlook is the add the FirstEnergy but and related questions flexibility results third the of changes described will delivering earlier quarter results strategy now to The answers. and XXXX as in we'll provide prudent to And face forward, results company. future open financial financial our Jon tactical the to uncertainties that to matters we shown investigation and near-term. working as our going are in

[Operator Our with you. Instructions] proceed. Partners. Thank is first Guggenheim Shar Pourreza question from Please

Good guys. morning, Hey.

Good morning, Shar.

Couple of questions here.

does First, are investigations potential of DOJ any any of its intend the a while has publicly the timeline going findings federal Board on on on the you given and releasing sort resolution?

Hi. Chris Pappas. is This

Hey, Chris.

both on No The will ongoing and at and not period, the to investigation that short certainty Hi. the have is answer. DOJ. updates providing point the from this we is no timeline during we be

perspective, expect $X.X potential equity higher I tax then cushion just finance fine a on billion corporate some with And or XXXX a flows. and you cash you to from your the help know how touch rates it. if in improve could you maybe penalty? for have Got balance could potentially just could XXXX sheet and guidance

a where like of there if capacity the could So balance is agreement? what look deferred sort prosecution scenario went be a you sheet into

Jon. Hey, This Shar. is

Hey, Jon.

improves that operating that expense reductions, growth, cut max the additional that we CapEx, fact, next we fund sheet taking your to out necessarily your flexibility. think taking balance we're doesn't sheet sheet. in about provide years steps that's think why When back I to now it balance balance we're the two over when

just sure Department we balance be why or we're take to this flexibility. make to we're address steps So and we're and Justice plenty we're whether fine necessary, going sheet there's don't if provide of or going know the can in be so uncertainty to taking that the or that will where I slowing year with on for because actions of not back of a kind that taking a growth felony, we that's near-term. so think We the additional just

to the you guys doesn't fade just And that Perfect. getting to me. sound current of sort And indication sort guidance. sort ESP, your impact for of ability PUCO like of have which lastly of any the runs are then maybe HBX? could Do you any expectations And through reopen provide the current seek it maybe that around XXXX? XXXX –

distribution approach will The in freeze the that’s way viewing of continue now Steve. at The is we're and would view is, the PUCO open That's would effect this way ESP that regulator. it. other some the we the the the reason I if really way for it, Shar, rate XXXX. I through right May company the look lead follow would to of it, different

with progress like repeal state what X, Bill we're and we're the the they potential But around along following House legislature commentary, following the right would for next. do it. movements As now to of just to see along

Eileen add? to So anything

Shar, it's would it a repeal this put if mechanism, they – is I that decoupling how put it say if they Jon. in on at depends the replace all. in how and

going back So there's year. lot you but decoupling but wasn't, a or unknowns, I help to and the in then how $X.XX we current a year, implemented earnings about remember it XXXX, profile $X.XX our think if to this of

that these things. you about So I to when you types think got consideration, of in keep think

under circumstances, And better on it was transition. Got I your luck but good really Steve, wish it.

I do think you are going great. to

guys. So thanks

very Shar, much. you thank

Stanley. Byrd is with next Our proceed. question from Morgan Stephen Please

morning. good Hi,

Good morning, Stephen.

of just SEC had through your kind question. all and a you've DOJ findings your with process? I documents going as process been been internal sharing committee and Has the

We’ve with Stephen. company been has cooperating Yes. both right. cooperating agencies, been agencies, with The both

Chris, you of are or no other FirstEnergy the that violation or in policies FE code conduct? of are officers confident And employees

that on to more we The and be any conclusive a is investigation get ongoing state. Stephen to it make would till comments premature still

received or SEC from other received subpoenas any you state federal mentioned you I recently? any you other Have entities subpoenas? think September’s the Have any Understood. subpoena.

No.

involving beyond with Understood. for other or other that extend the states And any have violations you purview example, investigation, of PUCO? interactions uncovered FBI the

that's that you've are at heard company's week again, all the comment and employees to the we It's really say violations time. The related conduct. of about dismissals this of can code really to And policies last of premature Stephen.

it's you questions. your to Yes. over conclusions your internal Understand. timing challenging do you'll timeframe have And to sense terms I of some of in unclear? sort for of what address these it know to be Or a coming investigation? you able be is

timeline can is begin and the say Turner What I policies that unclear. we we'd around we own sub compliance. Leslie expect think is course, reports the improving our around on the parallel on of them readout work investigation formed working their that working some around the And the immediately That's will under from committee our company as its of internal first leadership on process, to investigation. policies quarter not compliance. earnings. That's clear, that's a the be

for Understood. Last one me.

Just do on implications, Are mentioned end implications financing Q, other up are of Jon, financial or any weaknesses. concluding you that potential implications there material sort weaknesses? there particular you if for the material

financial there there at, I if we've material issue that any we said, reported conclude that our community. is on the wouldn't looked investor previous weakness, think so. a everything we've based Like even results wasn't with I to

So, wouldn't like any expect no, I that. issues

you. Understood. questions. I’ll others Thank let ask

of Our from next Julien Dumoulin-Smith with Bank Please question is America. proceed.

the Thanks team. puts a then there's of more it decoupling Can give I the all wanted I terms balance side one. earning Just potential else the Two, impacts. it equation well hope sounds the morning, XXX levers, here dime for costs you there. outlook? third, in take. here, right, of like just sounds some the instance, on pick from [specifically] you in I'm up you to the trajectory can. time. piece we terms so the could if And if as or it and in XXX to of curious anything if takes Good Hey. latitude for as sheet there's hear hanging be earnings like about I

credit If address it if as future you financing anything the plan you change into well, can assumptions there's ratings else? baked from on a

in mentioned. uncertain cut let take maybe think Julien, preserve our these see look steps if mean, $X.XX, I operating a I something of flexibility. if some to it's we bad an next only back has not that's CapEx thing it. at period We're address the say $X.XX out to a I to that balance just period would sheet to we you of can mean, some some of me we're time. goes year. is steps reductions, lot to I And about months the kind can play there. over taking into flexibility maybe these $X.XX so have decoupling mechanism prudent on way. expense or This

think of the that year. that I be So in something things, would scheme overcome grand a in would we

Julien, add. plan In plan business very very point. unchanged comments, my our about at for this and EPS our would Steve. reaffirming is in through I talked it's confirming strong we just CAGR of prepared it's our this and robust terms remains XXXX,

talked with you're seeing about also of you're most quarter we've that what think recent our I results, seeing resiliency the plan before. that business

and that only or the level plan, for – of strongly our formulaic few business uncertainty rates are going ahead. here. today, to transmission concluded, of moving announced potential next but base the very XXX% with our potential year for sticking as company next that two think system into we that's speaks I we you're not some So that transmission on moving formulaic standpoint. at And rates assets the once from a point, We're see Allegheny

So once it more. even again, strength it that in have program and the takes transmission our we deepens

So I bring that's the it. would to that perspective

Jon. is this Julien, And

you think just had a on question I financing costs.

HoldCo then and we next S&P have our about which today, FirstEnergy of Transmission. the that's rating think majority investment agencies our all have going few except the at financings at over grade grade be that and the you are we subsidiaries, rating. to FirstEnergy The with ratings for investment credit still are As years

much have that that. comes manage too of don't due XXXX XXXX, we'll being but that through be see So some I holding debt challenge. do able to company in and a We

I Got Obviously, you forward? I update trying that can targets the as but flexibility, it. clarify far If preserving it. in curious should when think next I how you an of going on reconcile further, even Excellent. to was in quarters here. pieces from as moving thinking. delineate this fact sheet the and here That's is prepare to we was what explicit means those about perspective would somewhat fluid, what balance couple earnings

Right.

more think year we about I when quarter talk fourth early we'll the next have results.

Got it. you Well, of All Excellent. right. much. very Thank luck. best

Julien. Thanks,

with Please Angie question Global. next Our is proceed. Storozynski from Seaport

you. Thank

I but credibility to call. maybe no rebuild the during were attempts processing Chuck can us I'm trying open is that. Yes. second look mean, provided know So we're the that I with I’ll to that the mean, like company. the earnings you leave I among forward, But information know longer help And ended quarter it statements with I reconcile investors? still those

Well, Angie, it's Chris.

is only say the violations outcomes counsel of we for about by saw executives the only led the And you policy of and of investigation past think the and dismissals outside to we has the can the that I and kind the that's Board comment internal mentioned company of code conduct. Friday. make thing really can that were

with have news you feedback could kind to about if And changes? this Okay. us talked management then share you state and you have following regulators of received what your

and throughout to did the footprint. a its We legislators, state the our outreach local only Angie, officials comprehensive Steve. do not regulators, state

to to obviously just where concerns over but significant of And on will, to in give we and characterize there if that We've communication effort that expressed, is was where to shock hard took communicate Board very very, we talk them was we you at And were were relationships and actions have lean once least in very decades on understood happened they have They like issues. It them worked of if bodies. were It the a ensure take rely we very that the with right. they our the quickly. been with outreach general and and So prompt those this are the various have regulatory really two-way talk I a great levels the decisive of we today. through I’ve manner, the appreciative to change. is decades, the think feedback, company news. – a And the and on I surprise really you relationships. various very this

my of can them, in move to I need promote way that to and in listen trust that. instill role to it that to going of closely ahead. any level and Its make two I'm we appropriately FirstEnergy a and I'm CEO, As do really concerns, like relationship continue communication and ensure acting It's part other with to respond communicate life. prepared very large to

Thank out just in the straight or given you. last consider this either investigation Would and needs else might you equity? asset come of without have how or question, you from trading that that. penalties sales given something any up equity And stock potential even is lieu that

Jon. is Angie, this

these taking OpEx give CapEx with issuing we're think equity. internally reductions, flexibility us including to actions reductions I

are those down first. So I that see then the things think we the road. where we're sometime are on And focused we'll

you. Thank Great.

Tonet from is question Jeremy JPMorgan. proceed. with Please next Our

good Hi, morning.

Good morning, Jeremy.

the removal. with I there great. to you the repeals half And us Ohio. like with on House legislation, through repeal, some But the just if of were decouplings conversation you the that'd midpoint, exact no bit what bit if want there? Ohio the X Bill You sounds to earlier changes, of follow-up it impacts guide retroactive a or there? decoupling replaces top-end kind but walk be full-year moving can clarify a could is pieces If other drag the to

The would XXXX. go rate that back. go assumption I would we would had you back So be, the to construct we in think

then reestablish Rider the under So you would rider your decoupling energy the remove you DSE. would efficiency mechanism, but

the So that would construct. be

if would So Rider it longer about going mechanism, replaced, no rate hit longer $X.XX part forward then on you that the and earnings. the decoupling no they – structure place how going would have forward. in you be a depending that then those DSE And going was would repealed forward, of

it. Got

said there. think I $X.XX you So

figure trying out. to Just

top-end a pointed of the midpoint I the guide the delta and you HBX without of kind being with $X.XX to think there.

So wondering the versus what the delta just high-end midpoint? that the is that remainder drives I of guess

decoupling to will around the If is Well, be it or we I'll X think be we're the top-end. House hit say the Bill repealed midpoint. way. near this now Right the maybe with $X.XX, going we the

Got it.

awkward if CEO, the then Steven question. appreciate, a could. of forward are And next Okay. here an steps And one Chris, bit well now wondering, just CEO But this is the process? just one, the what last I is on acting

the into role his to company, movement plan, Steve assume Jeremy. for Steve we the the future including answer. experienced CEO. the by a succession which great circumstances immediately at question, what the of been to the near Board CEO succession candidate through in clearly the decided the have has I him President. think planning on the last Happy And Board prior we is to company. his role of move would process week, Due our CEO right role. the acting normal in envision time it’s our continuing of as That's to evidenced

with Board's my on CEO in and a the in to view, So transition normal we always person we’re had view the mind.

very a Thank helpful you. context. That's

from Research. is question Please Steve with next Wolfe Our Fleishman proceed.

good morning. Hi,

and the sure other are change tactical the kind kept relative would make your potential to to cost tactical reaffirmed? – of changes meaningfully, then dividend cuts wanted ones are still changes your the of CapEx latter cuts. made, within the one as flat. If clarify construct And the changes, the that or it's plan those tactical guess you I Just I plan

Steve. that Jon. we've construct been do about. is the We would of all the in plan This talking

and for you? Okay. That's other your if parent mentioned, guess for you Moody's know no triggers I or credit there's no investment – any both FE at helpful. grade, related downgraded the any there's or need I S&P impacts below ratings

No.

those your at if Okay. affect these And then on and that material the doesn't credit facilities in you line had Q, facility, all. weaknesses

let Let them. to me Staub take Steve

Treasurer the Hey. I'm Steve is This of company. the Staub.

that from be have waiver there in request under of any any our facility, go and to So the we a time point our in then would would violations that credit bank at group. event covenants

Okay.

Moody's downgraded believe Eileen. is this that us. Steve, said Moody's affirmed rating. I our you

did. Is aware I both there? Yes, it did guess I agencies that. in meant end. both the of If I'm

So Steve, go would would and BaaX at Moody's of from grade rating then if to from would credit both that down to rating utilities all down means and agencies BB plus point S&P’s rating non-investment again, downgraded us the our to BB go which go BaX.

little Our basis points bonds holding would expensive. about holdco The would because they which our financing have $X applies billion by costs that about increase at we in would a more obviously be XX with terms the become company, of provisions a expensive of to more step-up cost. obviously them little

the pricing would more facilities would to have manageable. little And That increase S&P from want up do us we at It's become to XXXX potentially strong say S&P. have that at rating of by XX to about XXXX. I a post through right credit Our rating most And we basis to $XX respect BB expensive. credit all points. would collateral. experienced million of had now with plus that,

we would a experienced ratings so the rating more be markets issues capital simply if lower, And now, are – wouldn't credit I the more us. at be and it would expensive for just it any just current accessing right that expect little were

helpful. Great. That's not a events the it’s little type is just very cost. But like bit higher liquidity financing

mean, is part is That regulated been of then I back have requirements was no higher. would a longer company correct. we're FES now, it collateral of fully part And us, FirstEnergy. so when a much

at that. Appreciate it. it Great. you. Thank leave I'll

ISI. with from is Please proceed. Durgesh question Evercore next Our Chopra

then question. Hey. I clarification Good follow-up. one morning, Thanks one my for Well and quick team. taking have

is there's I the on of subcommittee investigation, point? over internal governance now look perhaps. at sort But the improve investigation this appreciate is to Just internal – them and practices over? at a just that now

is investigations. the ongoing it are still No, other as

we've the that drives for maybe maybe are investors regulatory ROE you with QX versus specifically just then you even GAAP ROE differences could discussion ROE help where is what in there perhaps clarification. with us at around differences, maybe And and regulatory GAAP or a early – done one the Thanks that just for end in the year? the – Jon. where Ohio, versus Jon, of

how regulatory financial several GAAP a obviously them between for Well, results differences and perspective. our report there's we how we from report

perspective For other DMR of in from you costs race. things regulatory that was Ohio, excluded place. that Ohio, part get from for a in only the as you you service perspective that exclude, regulatory a your There's when in instance, instance, pension

piece for is regulatory, which is So the non-service typically the us. excluded a from credit

a items are drive what really report on basis difference that GAAP there on like between report versus regulatory the what that So a we basis. we

a is perhaps – you in are our of regulatory Got you and comment, in it. terms can And ROE this with where that maybe follow-up comment then can Ohio? and you

XXXX, Well SEET the somewhere we there. filed for and XX.X%, XX.X% were we around Ohio

where that's we are. So kind of

Great. time. Okay. guys. appreciate Much Thanks the

with is Associates. Glenrock proceed. Our Please Paul from next question Patterson

Hey, good morning.

Good morning, Paul.

disclosing in that public. like we way investigation aren't this? complete – it after until Just you – not anything the to the sounds Is sort get – may think of clarify your on to guys planning any really is about DOJ

Yes.

going you – or impact what KATCo, to XXXX to have that's Okay. could And begin remind us respect remind would Could that's guys think in then earnings you of the you that? us with planned. be I what

transmission Well, and we I think going we're rates X/X/XXXX, company would those move in to for file effective assets X/X/XXXX. that then into

it's the If rate base, there. $XXX you look at million, around somewhere

investment And be it you'll see territories. area I you're is transition today where you're in start formula it stated is there just going service first, don't rate to in CapEx the and meaningful I could to at needed it's on some going But and reliability So because an it's and be a an meaningful. think opportunity to then to to those rate. improve as think going a customer

and that would would Once It’s Affairs. President go X% that. in than Regulatory Rates Eileen to initial rates revenue forward-looking be Jon. just in formula those the of expect to it Yes, been just effect rate would Vice into really in higher we add Mikkelsen, I that stated year. XXXX, have about

And our just Yes. the really it of footprint. context, transmission with represents place – to in now that XX% perhaps right broader

the stated but that for move successful there. footprint going significant, go not We're last it confident. have formula. completes progression. And be we'll preceded is be once as in rates be to Allegheny JCP&L, again, that up to or transmission it's this'll the strategy the and large the the to So we And we

this impressive the rate, formula of large on not last that Interestingly, is is a not Yes. stated PJM it’s an rate. sort zone in

for time the transition. So

know that for ROE, jurisdictions I'm this. But beginning assets jurisdictions Okay. I XX.XX% just of have and being of on and general ROE wondering roughly what's correctly, in sort guys what that you those understand you little I in different it's plan it's I ROE. if million apologize a right speaking? just And the that the but off think XXXX. are being you stuff, And for ROE I now, asking in effective for guys $XXX worth on guys getting

established that It's box Eileen. settlement rates ago. black for part a And of was was again, years the the many stated ROE

to ROE. as So basis XX What we adder XX.XX% of ROE bringing no forward-looking base up the then point the the stated filed. formula for is there that RTO is and ROE participation file did XX.XX%, rate for

Okay. Well I'll follow-up afterwards. Thank you so much.

you. Thank

Our is next Please from question Sachs. Goldman proceed. with Michael Lapides

Hey question. Thank taking my for you guys.

both? really of probably S I'm or the cash the earnings rate Reg about the you is earnings different liability, the one impact through does year, not but it year, not impact really increase First the us rate of versus not Reg does impact? Can just and amortization impact rate think trying increase the next does given to flow next impact cash for accounting it I case. flow – they're walk which JCP&L the of is, Jon, probably the understand

that beginning an It of by impact liability. regulatory amortization increase be base does you'll offset not of impact because the XXXX, rate it next will earnings cash a year, flow year but January implement will next but

customers not will the FirstEnergy increase, receive will see the but earnings. So

the And for base It’s months, million XXXX an of [approximately, settlement this a rate $XXX said of expected of you just Eileen. in able be would is company November XXXX. add that, condition that pick will the to increase, little to which we gain, influx cash I December will there. retain a up as earlier], Yards there two and Creek as is

on the to statement up or dropped if go And that income will costs over the that be think revenue there it. that it, the $XX million. about million just Got it $XX line? Are offset increased with bottom I

Yes.

request of adjusted part was the costs. They a collect are to included storm If that base our costs rates. you deferred remember, storm in

with that associated costs rate are increase. there So

that give line? of bottom you the inkling an Can just to us it. how drop does much Got of been

I think $X.XX $X.XX to it’s a share.

that's benefit increase? the Meaning million $XX rate from the in

That's correct.

obviously Virginia meaning maybe forward, West any Steve you, fleet the a in fleet place Much that's West about a generation all given thoughts just it's appreciated. coal question. it. this – at and one Any own transformation, Jon. Last, heavy transforming in going you Thank Virginia. Got and the generation, curious

three Just solar like as of curious what from wind. five as given now declining gas there? and fleet the years How your you're to well looks about obviously generation fire costs thinking

now, IRP but for right towards we're Well, working – submitting Virginia. West our publishing, not publishing

thoughts So for within we're some that of forward document, moving going to Virginia. West our articulate

fleet are And to It run a coal is You right. of there those us. responsibilities for our cognizant plants. very we're

an is However, as within solar and forward, that. opportunity we're there also now considering right for you look to state example, able install be the to

Eileen? So later, filing in Correct, year. on this of more December that due we're to submit that

Got Thank questions. guys. it. my Much you, for Thanks taking appreciated.

Michael. Thanks,

Our Securities. Mizuho next with question is from Please Paul Fremont proceed.

rate had XXXX, your Thanks. I at in growth first the of growth. to guess thought part linked base the a question I X% have I to X% least better which get to understanding through is just been

you In able can terms be you of reduction have X% less that through you back how explain you toX%? then O&M the to on and making just base, if or CapEx would would up rate be up maintain cutting – you end

one our that do, in could some be already seen we I obviously of from moving year returns pension. pieces. we favorable we lot last in thing the and containment different there's favorable have would think a Cost impacts our had forecast

that's flow So to going through.

year, confirmed earlier our Corp we If successful deal you versus think year. a today FE when down. they are very this about costs where at are where borrowing had interest We bond last rates were CAGR

So driving factors our that all that number. confidence they're are in

deal have If taking to provide go hit these us way, track and to doesn't our CapEx, back with, there we're $XXX some we flexibility. some million those steps we're cutting going that of why that's something but is kind throw is Now, for off to to just not because uncertainty results.

on reminder, our a that's budget to $X.XX be counting $XXX as a And just within on we billion plan billion. that roughly $X were to million

we're portion improvements pie do by investments. it's said the a fuel two, important as to power. just the very customers; once within right and And before, So transmission seeing way, those small we've reliability larger that now helps it's earnings for much prudent our again, to a it, of planning significant emphasize

earnings seeing dual, a very Customers for appropriately. company So benefit, right. engine good and it's the is are it

the Next rating not call, second you investment the question to on would would alter of you sub be part potential with because at sub you one comfortable downgrade least that grade a rating be as grade investment to to investigation. now to quarter remain indicated had vindicated agency? seek agency expected you Are

steps I be it's think governance that. subcommittee, why matters, governance address compliance related at I doing they comfortable Leslie's that with end matters taking the of of with the not We're that's the we're – we're day, mean to the and the focus to but on. and part what issues No. that'll

agency then would you be downgrade into put action? reverse would then governance that expectation rating once measures the your So the additional place,

would we have the mean, to findings found, talk the recommendations. them about we I the taking, steps that to we're

us on investment this. the to can grade. I think we it's for those work is some time so matters, be going back to types But to through get to take our focus improving rating of going

back issue would up. you the not to action take So rating to equity and bring try

No.

Great.

Thanks, Okay. Paul.

Our with next Charles proceed. question from Please Morningstar. Fishman is

at rate beyond envision co? XXXX going else goes an with and was opportunity opportunity incredible KATCo, With get at part I assuming everything and XX such as Thank once we investment, there the on investment really Is the FES, forward making recall same KATCo the MAIT, of into the as Would five, that energizing things because and years of ago. future, that investment ATSI and preferred sheet balance transmission with there the of at effect? accelerating for you. you

there filing. and we our made exactly think is that's I why KATCo significant opportunity in

I company think it move. also our provides additional to for flexibility

$X that system. spend our say just Let's around billion transmission

the a rate, going I So MAIT, needs Allegheny in of we're in reliability to program. but here transmission at found the we than believe around pursuing seven rather ATSI that at in anything we investments difficult of energizing stated formulaic go very greater It's be and future the system early believe, program. believed of entering to suited When while again, in strategy look other you after our rates under system. the would once general, our better the

of reliability companies. in we've other seen So the improvements transmission both

of potential of not yet. XX transmission a a believe terms pipeline that I upgrades. We in a have of done years work too we billion are we've additional worth $XX fixed certainly number

and to addressing responsibly So we're there, would earlier what your I point, need it. pent-up a call

I Thank you. helpful. have. all That's That's

you. Thank

Okay. Well, thank very you much. Yes.

proceed. ahead. Go Please

you Thank interest today did update attention and the very close I for our we and just to thanking today much. Okay. you key out time company. our very your that I wanted a And events. best on you in know the to by call recent provide fulsome

the We and forward Virtual EEI of each Conference also meeting in coming talking look to with up. you

look that a in with to safety. I very much close still that would message of country. alive very also this is So just much. pandemic The forward

a we safe. best As very safe employees while to hard working wish each of we’re as to just we’re maintain the one it. through company, all customers is safety our protocols the and our I you right working keep

best the you all Thank to be safe. So you. and

conference. conclude today's Thank you. This does

a wonderful day. have and time this at lines your disconnect may You