FirstEnergy (FE) 9 Feb 242023 Q4 Earnings call transcript

Greetings, and welcome to the FirstEnergy Corp. Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Irene Prezelj, Vice President, Investor Relations and Communications for FirstEnergy Corp.

Thank you. Good morning, everyone, and welcome to FirstEnergy's Fourth Quarter 2023 Earnings Review.

Chief Executive he Tierney, Jon will Senior President Chief call lead Taylor, and Vice and today, be and President Officer, will Brian our our Our Officer. Financial joined by

our in XX-K cause presentation non-GAAP release, financial could use plan financial information, available and statements and Our our discussion results website SEC materially of our differ appendix will earnings firstenergycorp.com, these Form slides found at file of reconciliation forward-looking week. Today's along information of supplemental that measures related to can non-GAAP are from and today's be financial on next Factors our to the we the includes The filings. measures. statements. presentation with include

Now turn pleasure it's my to Brian. the to over call

morning, today Time everyone. by, joining that FirstEnergy. every fantastic customers company who Good gotten interest in are I've for you for of to and this already. day. know has company hard the your to X Irene. our for to serving us It's dedicated Thank months been flown you, me believe I've employees for Thank as the with

Some be good of of that stories. say me great a teller myself consider you heard I have to previously

for that a regulatory I'll tell have full some of XXXX, employees achieved. to the quarter of for best fourth discuss an While our XXXX. recently will milestones and and our year my great overview it story do given provide me I'll I morning, tell to we well. This financial performance

exciting our wires business. We capital program on unveiling entirely are investment also today focused an almost

more XX% the an system X-year last plan our customer compared to and to to reliability next invest than we our of $XX regulated Over represents the experience. increase This in X improve years, plan. billion

on below as later. vigilance our this provide our our detail more on are maintain will peers. Jon We will in-state rates current affordability

earnings XXXX. quarter quarter the per our compared delivered $X.XX quarter quarterly which guidance XXXX. per fourth compared above share, $X.XX of of share of and continuing the $X.XX the were in $X.XX in per For the of fourth of quarter range loss for share GAAP per share a XXXX, Operating FirstEnergy was from operations midpoint earnings to of to the fourth

was year impacted the of market on an the the billion conditions budget. $X.XX of of in operating was range. experience. XXXX This of throughout our our share. operating or earnings our the Half XX% share pension full the $XXX CapEx more our those earnings $X.XX our and significant per of of than CapEx more earnings above operations XX% meet per Through versus into per and to from $X.XX share, invested work to Employees drive to share, year this share work was continuing per $X.XX the savings XXXX, employees impact created and overcome company allowing In earnings GAAP year O&M $X.X For able midpoint effort improvement delivered $X.XX XXXX, the per continuous guidance us over headwinds. The to targets. of XXXX. down weather company drag customer put to were tremendous X% plan improve XXXX invested earnings our results and base million businesses. buoyed and $X.XX sustainable, unusually wires of by mild diligently program, by than directly reliability are XX%

business. supply balance strengthening a to improving wires are in the was XXXX its able dollars to to mild organizations mostly terms construction were incremental and to growth year advantage for weather chain the environment projects future put investment sheet and and enable of take the and Our of the game-changing regulated company work.

sell second a for XXXX, transaction the XX% with FET to February Brookfield of $X.X In announced company billion.

successfully billion over close the down to the of year. In Pennsylvania X% In completion we issuance $XXX reducing with executed the convertible debt our our volatility transaction, proceeds filed to will pension pension order contribution of balance liability sale we on March. make approving our used million the settlement We these time, and our the a in of total at With asset the anticipated pension the $XXX the majority the end on before of debt consolidation, a be receive in and successful plan end paid executed and proceeds we May, by to XX%. of million lift-out we $X.X cash this pay December, that At of late pension a assets. coupon. track representing a X% the by are to

condition payout the financial raise confidence earnings. In targeted improved to had September, confidence the the time quarterly the raise XX% to the to for than board years. Board XX% of operating gave Our first dividend more dividend X in the to ratio the

Of declarations per Board $X.XX in versus $X.XX course, subject our approval, to share plan includes This XXXX share dividend per represents a increase. of X.XX% XXXX.

operating puts to our in with for sheet significant our of peers. growth. balance equity FirstEnergy we anticipate mode. improvement in fund earnings investment Going and fact we a FirstEnergy growth forward, many employee beyond not our differentiates The The our programs our incremental expect dividend growth CapEx that growing do benefit

We to are X-year introducing program capital a experience. billion improve reliability $XX our and customers' investment

details over and rate These period. program, annual average base more remarks. this should Energize the will We X% his investments are XXX in Jon enable in growth branding provide

to in We improved investments XXX with billion our are rate and in an investment Energize XXXX, XXXX. increase of XX% significant quality. earnings a base of $X.X increase guiding represents over

maintain to in-state peers. versus a customer our position affordability expect We strong

We our are rate. annual operating X% reaffirming long-term X% to growth earnings

operating why operating rate guidance share to $X.XX year-by-year. midpoint of per on execute XXXX's our range earnings $X.XX The announcing we share. is earnings X% per are above FirstEnergy XXXX a plans growth midpoint. is This to guidance long-term

Turning to Slide X.

at take our look Let's a regulatory calendar.

have The XXXX to and constructive XXXX, and the what know have that outcomes? in questions One regulatory we regulatory milestones can our obtain have results. milestones outcomes. In near-term FirstEnergy look several of we fair is, early given demonstrating we investors will reasonable how answer asked is, for achieved

few. a highlight me Let

As $XX that increase we distribution equity received in there supports last of of call, our equity case. we returns outcome revenue an rate approved commission in million ratio a The X.X% our XX%. and reasonable mentioned Maryland a

pleased million invest we electricity and XX.X% for are the filed a and to a settlement January $XXX case million X.X% reflects year in one. allowed In year, settlement ENEC base based no affordable adjustment recovery of We our with this we base broad staff XXXX. million a $XXX our provide settlement to ratio. in X staff disallowances. our reliable This cost settlement base Virginia, and case to broad increase In The carrying case support our has in serve since over a West customers. intervener after filed of $XXX in years with with for of intervener rate on support and equity rate rate ROE last rate a in Maryland

The transmission of rate to our Friday, our staff assets residential the below million constructive the customers. ROE base Both with consolidation reliability. In and did year. we in X.X% $XXX will received XXXX. and reflects Of transactions fair a will based order equity case in million asked in that for, an the modest January last since outcome XX% will support a XX% customer rates West but it of not in-state Pennsylvania to settlement JCP&L's be of base bill an a of increase the In rate Pennsylvania, rate settlement fair place peers. JCP&L in we average investments X.X% increase settlement and is and filed improving companies our New will attractive incentivize If get December, reflects ratio. improve the everything Virginia were to settlement be demonstrates adjustment broad and last base and case an have JCP&L for on Pan intervener $XX transfer on and an invest The Jersey, a our rate as approving course, we X Power's reasonable executed the West operating settlement approved, this that make CATCo. to

which filing commission minority interest the case We awaiting anticipated settlement rate in base for Pennsylvania soon. FET are We the of is April. by approval sale, filed a anticipate

to a outcomes, FirstEnergy's recent milestones reasonable of constructive for looking and provide investors examples ability For these convincing evidence. receive regulatory

Mod our and way In are through Grid our cases. actively Ohio, working II we ESP V

expect the process plan are May. file outcomes rate We a engaged case regulatory base interveners fully in We to in constructive cases. with both and and staff in

that Turning will reporting and companies segments, to Slide will X. adopt as we the reporting XXXX well management. as review split FirstEnergy Individual in are and to among to I leading reflect how segment accountability want simplicity new to transparency company. briefly the not and managing the be

pure-play will Distribution our Our Ohio companies. distribution-only house and segment Pennsylvania

customers about operating make Our each to transfer Pennsylvania senior this consolidation and assets A transmission of executive represent forecasted serve $XX.X X.X base and XXXX West Pennsylvania XX% million Ohio. This account in the segment Penn segment rate Power lead of CATCo and transparent will for about billion and clean. the FE earnings. of will

another Our integrated XX% operating generation. Edison business lead Mon base, forecasted transmission $X.X of X and serve million on and with This will distribution, represent report and segment lead Power in and of JCP&L, combinations will customers and for Mon will billion Power, earnings. Edison. segment rate JCP&L our will executive Potomac about account about Potomac companies A XXXX senior

will stand-alone for about interest consolidated Our of base will transmission-only represent as be businesses. responsible in of XX% well forecasted business in pure-play and account ownership rate executive be for billion last $X.X transmission earnings. FET segment our operating it will segment our these CATCo. This consisting companies, major One and will house about XXXX as

segment [indiscernible]. pension quarterly report book XXXX in Finally, year-to-date and will new XXXX. interest be segments available fact current the is the the to our company throughout with we OPEB. A and provide reconciliations holding It will and former segment Corporate recast will of legacy subsidiaries and investments, into and other similar

updates the crime some Ohio new regard organized In to Commission, Let me to provide nothing key there's Slide investigations on report. X.

in providing to involvement goal goal any there greenhouse The to of West to policy the was greenhouse goal ability ask. continue by gas Harrison emissions of answer new power nothing Scope approximately updated XXXX, respect by DOJ yesterday, XXXX, questions emissions. climate details to commission on the neutrality corporate that an emissions In Virginia, our prosecution of and XXXX. which and net and to gas reducing identified XXXX with a Martin energy achieving strategy they PJM we cooperate the FirstEnergy's We plants Fort in with our several the are and is an interim resource emissions goals. In state XX% the company. with greenhouse to agreement responsibility the Achieving region carbon published adequacy update our at website account We've interim with for our we set concerns deferred interim goal, meet including reductions our predicated our by meaningful XX% initiatives. X challenges gas

West positions, Virginia, end in our to have Edison. of challenges, protection, We the Smith for we X and goal is decided Martin useful XXXX of life Sound Fort remain remove focused goal. Energy. system forecast transmission, business the distribution decades interim in these of the net previously Through to transmission and businesses wires our largest operations. Wade on management system we stand-alone carbon Puget and in XXXX. filings have XXXX transmission Officer substation brings Given of achieving one presidents in the our planning X regulatory fourth quarter Wade JCP&L, team. Pennsylvania, the than neutrality joined and in Utilities. and of he Mon Operating Chief of aspirational construction operating as by of experience FirstEnergy He additions our of Harrison The American December last of spent including Officer. Power Toby XXXX. In multistate and In engineering decades and X him. our running where joined from made year, report leadership as the more country. responsible will Ohio, was in announced November, Electric we Toby for than project our President Chief businesses us various and company Power companies. leadership the growing X we Potomac Thomas large-scale hiring to more and managing the He key of Operating

FirstEnergy. into are team months. external grow candidates and a leadership the of run to have and that these expect in Wade electric made businesses internal additions we transformational Toby hiring strides XXXX financial In will coming reviewing continuing transform the utility. premier to key this make and actively are to strength announcements and to company and XXXX, improve the into We

the We with have mostly our we a focus making reliability growing regulated, X organized and to companies investments are wires singular on the company needed experience. our improve customer

balance differentiate organic strong the will for sheet FirstEnergy Our call to our many Jon. of and that, investment turn over peers. With opportunities I

a in plan I'll performance our of Thank more to briefly results, and importantly, XXXX also good you, guidance. new history. our I'm everyone. Brian, discuss Today, turn and excited our page enhanced in I'm X-year XXXX, very but company's XXXX review morning, and proud our

to XXXX at to which initiatives in in results the employees financial midpoint Our very the transformational adversities environment time, our doing earnings XXXX meet guidance. stronger, share. strategic of on But demonstrated year to conditions extremely employees' performance, a challenging the company, and while grid company. Since the emerge of including rate can't in weather their while were commitments advancements we making our the performance interest quarter and our operating volatile headwinds and a impact challenging which the and and that from interest at year to significant financial tremendous above terms a I rate financial of improve market speak our can and operating Fourth included quarter our remember, pension compares dedication I've in is been to a share, nimble more strategic and fourth equity earnings these a This $X.XX abnormal more overcome most I $X.XX XXXX same as hard operational recall work our plan the a the performance. faced, resiliency

to This we this guidance year For are and $X.XX night. earnings last our XXXX's compares quarter XXXX. Fourth of the $X.XX also operating range. the of in strategic full document midpoint of year, were operating in highlights and website year, and X% IR to favorably above detailed earnings growth guidance share a midpoint financial posted the our results represents

throughout to in spring offset a offering earlier debt operating deployment largely business certain reduced our of expenses from benefits through focus and tax across the third units, quarter. headwinds we pointed the each As the on year, mentioned the I of the low-cost realized proceeds we convertible in strong the

$X.XX a share reduction Our XX% benefit. million expenses year-over-year year-over-year, across per over $XXX resulted focus a company in operating on the or representing

'XX, about which on accelerated reductions sustainable improvements in XX%, structure. was As branding reduced corporate XX% and 'XX to as and represents the items unique spending we've discussed, contractor productivity lower largely includes are our company, that advertising such the from of that work or other across cost usage areas

transmission Our programs our a share and formulary benefited per our XXXX in investment businesses, from $X.XX across results improvement distribution resulted year-over-year. which

capital to to X% our transmission increased XXXX. As we XX% year, mentioned, in or of XXXX, for rate above share our successfully investment year. capital $X.X plan a Brian our deployed million XX% billion for the earnings growth close $X.XX in about compared close primarily the of In investment original $XXX to resulted or business, from programs, which base

lower mid-October, reflect to in investments increase compared to lower and projects. In XX% business, higher of spoke of sales earnings billion $X.X in XX% plan year-over-year that that also spoke but transmission rate above of. from and investment due or an Maryland our Distribution plan or to $X.X of our Formula million distribution exceeded X% X% $XXX I we in I XXXX original declined business were increases credit rates emergent and weather-adjusted CapEx XXXX, primarily effect our distribution original represents the our our lower operating the went impact weather-related costs $XXX part year. billion, last pension earlier, planned of rate as of by an increase the million announced of demand programs into our formula compared new and

'XX a on of a O&M of benefited mostly carryforwards. XX% about results loss use 'XX. segment, and Corporate our XXXX, result in nearly effective operating as of in tax final consolidated a net rate Finally, point state from versus And planned lower XX%

about generation December, Removing fluctuations associated subsidiaries. total with will a discount and assets liabilities X% $XXX our million discussed, pension costs. from reduce X% this earnings lift plan at pension our balance sheet of to pension former in lowers a out Brian As our in volatility obligation overall representing future liability pension we executed and related

regulatory further continue through mechanisms additional pension pension will to and opportunities We tracking through the pursuing pursuing the outs derisk plan lift process.

let's about going Now our and talk gears outlook forward. shift

XXX introduce earnings with to robust our credit of line in performance. plan of improved our planned significantly The our our billion, returns. transmission including system the of a rate grid long-standing XXX Energized Future pleased real-time earnings decade financial approximately provide each strong base includes is growth that long-term investments X-year The a plan We annual investment-grade sunsetting Energizing operating average of supersedes long-standing X% with quality plan after investment to formula XX% with year, annual plan investments in are rate in evolution and program, and resulting distribution supporting programs which growth. we're dividend growth. Energize earnings to increasing metrics $XX our commitments annual X% in our growth cornerstone transmission very X% investors, this

and targets energy and reasonable investments FERC-regulated improve XX% regulated investments supports and Jersey projects flexibility that requirements integrated required transition in a and and to for our the operational to investments wind plan experience add load our and capital enhance system New ensuring center transmission return stand-alone offshore Our and is transmission investors. projects. or new the data customer upgrade new like The transmission in while support fair the regulatory load program includes weighted businesses,

efficiency flexibility system, the customer as distribution our segments the meter integrated investments and by clean and includes X-year energy solid the plan deployment, investment with plan experience emerge. enhancements, modernization very adjust through such smart to as projects programs. grid improve and is distribution to This automation investments distribution and programs reliability comprehensive energy On

over in of we years distribution rate investment for earnings next regulated base. from our as base the programs an increase rates billion couple state formula Over rate rerate we $XX of for anticipate and

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expect their strong operations, below billion or We from building $X.X include at cash XXXX the XX% off annually, XX% of our at expect of supports not as existing rates maintain which keep in portion FFO will debt our of our to to average XXX total or funded position proceeds XX% employee needs below regulated debt transaction. billion end-state $X FE peers. Energize issuances the we be programs affordability any and cash long-term flow incremental debt as from equity well And it and a plus utilities and and our with to projections Corp does to equity plan our FET beyond debt.

for reflects integrated New rates businesses. A lower West rates adjust normal of planned in first each our cases increase, new rate the and mind, XXXX contribution. expenses to our XX% where of higher of of XXXX are O&M plan in quarter the in of consolidated a base to from fossil represents of our implemented depreciation below in $X.XX Signal to you the the drivers or new our a Jersey quality or part $X.XX segment, O&M customer Jersey we a this demand, of new rate. Peak return I first given and million and Virginia. $X.XX our QX timing formula contribution spoke share. settlements quarter generation $XXX timing reflects mining we XXXX outages, when for cost our ongoing lower our West decline be the in for dilution below increase transaction earlier, earnings in O&M earnings note by earnings XX% range to on FET the rate interest year. With weather-related Signal of give interest tax earnings the that FET timing and the a part largely Other rates approved settled It's the retirements guidance debt rates X% West be reflecting from of asset some of planned higher our as XXXX such and from operating a operating the offset you anticipate transaction. or our activities share regulated $XXX new offset share from levels, to our investments Virginia and loaded and is will generating growth facilities New reflecting as back-end Virginia settlement reductions. share projection reached takeback on Our the include permanent largely is improved this O&M by from investments, The Peak's and color year-over-year midpoint important $X.XX expense, a a largely midpoint increase note representing late XXXX, guidance, which X% is for planned income To and Mark of $X.XX off vendor in effective as that million The

million improved and and $X.X increase as with termination largely a billion recovery $X And has in to regulated XX% in from $XXX contract capital investment unique from increases working employee occurred compared Our items cost year that as contribution, pension billion operations, plan well XXXX. businesses the is represents capital. cash and in year-over-year improved this which such and separation XXXX, as growth severance costs costs our from several funded for

on of but today. But year-end. XXXX a comprehensive your have call in sale cash you of and stronger we plan to growth. the targeting position, minority turn Thank challenging go our FET interest those flow, a and innovation to Today, from company is transition, debt was execution we significant year, employees. deployment operational XX% we're Brian. before a Q&A, for remarkable time proceeds, With back I'll FFO a outstanding year by with to for the and our improvement closing and XX% much over XX,XXX to financial continued our improvement

you Thank execution. We're record of track today. excited joining a our for building I'm about all us company. strong

fantastic investments late Brookfield robust and plan We model XXXX, in the Blackstone have Starting have via business announced a we significantly for initial the a and the future. balance sheet with improved $X a was billion in raised manner, capital. And common in the of we've equity important past per equity at very share. year, the achieved issuing several shareholder-friendly In it $XX $XX equivalent outcomes This milestones, investments reliable our investment incremental revenues debt, FirstEnergy for XX% million capital and cases of not rate plan previous more representing fuel with funded cash constructive organic will investment and and base equity. our customers. through and from includes our an XXX, increased utility increase internal of it's in service. Energize X-year $XXX that billion X-year flow than plan our affordable is regulatory

has cultural tremendous significantly We earnings company. with focused our and quality. have This growth work earnings continuous annual with improvement the a operating together to trajectory long-term X% improved transformed changes on X%

have accomplished this executing shareholders. to We plan to committed we're a deliver full our on value company of to the lot and

the call Now let's open your to questions.

comes question Shahriar Guggenheim first Partners. Pourreza Instructions] Our [Operator from with

Or of I sort Signal immaterial sort future becoming earnings good Brian, of the pension that X%? as off the to 'XX could the gyrations to like some guess around growth have that X% the near-term X% maybe of guess, of I see forward to some potential contingencies maintain we about the the next linearity? should year any you about thinking base, linearity drag, we're Just, and how Peak roll to maybe sense on of X%. see we enough the headwinds think

utility back We're that linear. volatility. to to be much Sure. look through going to not lot properties. going It's investing We're come to going like. rates. And regulated going is a We're be in normal where to recovery formula-based our a see getting really should obviously, of

So base a And tends to we're And -- utility of normal that in through operates. how rates. then about linear, cadence it's the just be XX% be for going rate to going cases. is regularly formula

You invest, the recover And be you going you and that's we're operate, cadence you finance. that on. to

should enough the is the CapEx any I X% John in flexibility I sort X-year we of Is plan. rule markets is there have incremental highlighted have credit growth should incremental cushion solid. opportunities obviously, then in -- not about we to and there of incremental the thumb come about Or equity even still guess, metrics Got CapEx? it. obviously with equity equity? And incremental rate to base there's in tap some think it thinking incremental if very there the the if some prepareds, Could you be know, CapEx?

Yes.

be in of time, see opportunity. projects. be a the that's yet, garner short of million through able They're issuances things we $X.X have able into we come of investment were anticipate down, billion there's the until X operations, PJM the period that going solution win really I more CapEx our capital plan $XXX And for like to and hard not like seeing significant won't we're they sure. not over things enough amounts in and to, incremental transaction. flow a put coming But think system our Window through we together I in we of will cushion to that I plan that see we'll new Open of fund a the to that our responded from combination to where team that's XXXX worked in equity and debt the equity coming. of cash from those and

from equity having capital see markets. So a equity utility these for access the the we're CapEx ready to way without traditional fund much incremental would to

I think, am And then I sorry...

of billion capital, $X over of I PE last would position multiple, the of raising the we reiterate couple you said. at this course the equity no. XXx what transactions the just No, be in we a kind of I of equivalent done mean wouldn't today. not had years, really

capital think have targeted lot of some little base a on of equity structure. bit structures, they I if think capital depends versus rate I that than you utility capital at a our look our CapEx better it layers formula equity are

plan. flexibility have some we the So in

but this, -- the lastly, you Perfect. It status on And its updates process. just on there's quick, quo. doesn't just like Brian, sound real answered I think any OOCIC

haven't assume anything fair when shouldn't we is but -- the So K see I seen released, in that. it surprising yet, to it's

Yes. the they was we from Shar. quo, ask answer nothing at the all, new disclosed questions, surprises to deferred agreement. Status No with company them in regards and prosecution what

Our Orrill with is UBS. from Gregg question next

Congratulations the rolling plan. on out new

and the new then above over it's average toward on guidance. you're from plan? just the down you guidance that? the and there's the that growth operations of plan the Or for Is it billion grow $X end the cash that off -- is and the of So sort base that's level of

Gregg, Jon. will $X all of operations. this years, more it cash In be or from billion is

Some of average, regulated just maybe be on working programs, north period, $X X-year it in offset growth by the of it some billion. be will But in over will changes capital. our

Okay. capital a new the Brian. reconcile a of just adds the you the do follow-up plan Maybe to How with that such significant new sort of amount plan? forward for idea of coming prior

been since have we're we not for a balance the The distracted has laid the by think, first as in We're competitive company's don't transformative I been M&A. a different done We place, in out, on truly the sheet work that's arm. Gregg. time, history, XXXX,

we behind regulated experience. the our them. customer rate have got reliability and in And it's mostly with our that, the lower, capital are why why significant strong we why regards have to opportunity our It's companies We be a sheet in some is to with the with, lower. to honest wires base rates that's opportunities and balance invest on investment

a customers, what able the for to the here time, past. are in seen is and the for benefit difference the first money willing put regulated into We our and of significant from properties you've our ready, it

Nicholas with Campanella question Barclays. next is from Our

Happy please? is pretty because on I to see to should just well, just of raise achieve question I Thanks Obviously, and then Greggs we across -- just the it how updates. about as plan as all board. the customer relates follow guess Friday. to this kind for CapEx up it's material the plan the just the build filings through think upcoming good growth to

Yes.

X-year be period. in digit most single time the will of we So for increases the think for the the

represents XX% below that peers. rate wallet Virginia, rates -- Maryland book customer at Pennsylvania, and XXXX, to fact Maryland, and Page the from lot XX Nicholas, X.X%. If X% are things also New to we in below the to our West and there experience. more Virginia importantly, share our -- put they're customer of But if at there X% peers. invest base XXXX to XX% X.X% New in has you in customers' Jersey in-state out electricity that our decreased Ohio, the And look, in Jersey, in of in in-state A improve Western between opportunities through you look XX our affordability like

share industry your when need your talk who still X% near and it's smart whether nowhere to We're we wallet. start of say home people heating, they our X% when to states concerned we So to cover to customers' represents electricity, for that. getting at serve. you're And that considerable vehicles the power whether in or value for it's whatever a customers the you

that. add I'll And just to this Nick, on Jon. is

have an increases the with of generation rate we a our Pennsylvania, an of last snap last that if at would file most that it's where and customer if cases generation you annual of build we years, case, fact, the new average you bit related. the is see X% the and integrated service, kind you little basis. X%. at since couple X% were step time compare for just to look last between you somewhere do we more in to And the bills Ohio instance, back approvals look the were line in in or decreases if today in and if on than -- you or settlements If of where business, X% And just lower on over

how kind How versus question then should guess pretty into the of Got here. slides about plan kind Or low a similar get just of kind just settlement. the baked that what's will Jersey embedded in And Ohio? if And And on improve is helpful. of earned I think that think thinking New the do we that? ROEs. you we it. just with an is your Obviously, That's plan? improvement about I'm here, about here,

Yes.

the returns of be we As allowed true as their next our very return. important years talked to up state-regulated about, of couple will more we

Pennsylvania, next right be about Ohio and file. now Ohio to So I which sub-X%. will earning is think

although opportunity see of to system a the company, an there. which Pennsylvania our test Some above our it of there. return we the in do the Pennsylvania, coming O&M will X%, projected true is the lot year weather-driven, that it's then but in Pennsylvania for back up ROE that's And in be will reduce we And company. use

and $X make that the this billion base rate it later is today you'll So year. between of we'll filing adding where about be

just one, the see Okay. X% if And revisions plan. growth, just last demand like at conservative embedded have to continued on I'm PJM just And in the just Places higher. then that's all? one load wondering

it. until things, put we're So X% about range. don't like in it forecast that to we and seeing other And at projects want seeing we're capital growth

here. the seen develop we're going things like and We centers As go PJM get like. to forward, and data you've think that in

us, think south You're it it our service that seeing the seeing us, you're the of I and of to continue to into east will migration territory.

and as fully believe and seeing it's it like, to plan upside the it And think then some are want it don't coming. transportation we're will. the other confident we like load fact, bake I is just you until In see of the growth. that into We electrification there in things

with Our Wolfe next is Sullivan question from Research. Michael

for the all Thanks disclosures. new

the any, base out filing the -- the and we over terms of Grid II And rate playing how, couple in months? of about Just kind if think milestones mentioned of can that Ohio? ESP in the on you How front. May should regulatory in coming Mod inform next

see us. that you're from processes, and working to we're regulatory So going those

certain both on flight V the our today those us briefing certain will in and through coming and Mod V, post-hearing look progress ESP down making to we're things are and was working be expect Grid flight, for in the file road. Grid Mod These that are II. April in last what's of think longer base as Grid and constructive tends long fast. process months regulatory year. process anticipate But our this file And a Mod And on are case, we actually the You're we going in night, II, processes. do and is it we reviewing outcome ESP there coming rate be not we'll regulatory ESP we I we'll to processes. II foreshadow things to and that move but see what's and in V very constructive. an for are same, which will

and along. moving happening just as should, constructive we're outcomes. Things So we're these they getting are

just just Okay. some on too we you where go had, more already about you're feeling how forward, there. And potentially sense don't but pension and I Great. much in language that out And lift a done? around limiting know just mechanisms? to implement nothing I can think. you ability then be Can volatility were give the how there of on then cases some prescriptive,

So the pension yes, forward on limiting path volatility. just

Michael. Yes,

least part get thoughtful we be get about a as generation couple something next that and settlements. at filing of there. we're we before liabilities to we market and talked on looking And steps in on make bites some So order have place. a of do right New warrant the of now as should the Virginia Jersey not transaction, at We before, regulatory process these cases lift-out whether at year we'll pension did the a a once And we we get front, if to things execute them authority to likely through final West the $XXX then go that. in we'll can that apple another that million as as former of or conditions the take this the

Okay. Great.

in seen one, I payout direction dividend of philosophical, point, just other has of from have the think and lot how dividend payout terms you starting maybe just you're different peers you not kind seeing more the gone about so sector how how a have, you your coming a earnings to we've that of think of far, the with levers well, know where about and kind that the the going the maybe little And a of but reporting continuing last context it? thought you trading grow Just season I in other like growth. just but and

Yes.

it's than a that place we at increase the start over and in that rewarding So felt time we Announcing X did we years, peers. is our to with that. are different our And September, the do to increases. dividend first now time shareholders the

earnings where time. us So over September XXXX, the way shareholders a traditionally as It's do. place And our well. growing companies the treat in time and be going utility to with there to increases we're anticipated in for we're dividend

X healthy. peers equity our some transactions have sheet balance is because done do years of over that last or don't Our so. of the we've that the We the needs

some a good in of where our and a think and we're really are, we So place place. peers different it's

from is question next Jeremy JPMorgan. Our with Tonet

to needs. bit on to to X% CAGR about in wanted EPS X% guide rate talking Just here a base equity dive little more the without relative CAGR X% additional

of So data there I especially points the smaller those we else thinking pace Peak of be stronger growth there. OPEB looking should base of the and a X Signal become kind part anything Is marry was pension just to about, given equation? rate the

year. base It's in been Maryland, West structure New those really Jersey Virginia cost and time the things rate things returns, base, cases that we've that done the It's for Energize cases, properties process up just rate been we increasing the investing regulatory our and mentioned this some a that amount in in the then CapEx recovery. our we're in haven't updating going updating of And remarks. and It's and XXX, that regulated X Ohio forward. to we've and Pennsylvania as going announced in with updating coming significant today going be

So And it's the work. internally. repeat this over should operations way I again utility over and

X goes as easier on people, first and done the then safely, before investors go our in -- in you've your operate properties -- operate and reliably, regulators well, affordably we put and well. recovery together financing tell invest of components You front component and we the come your in those companies you you're and that the better for story when them recovery you we and invest if

virtuous that in cycle I success It well. plan anticipate as and a remarks credible fair all at together beginning the discussed rate going we're I call point and constructive what we're success in story we forward that having as of So that. the and holds that at place we're where my the getting the prepared those we're show that of beginning where the cases in a and we've outcomes, had that

Maybe slightly. it. Got rephrase question to the

a is there base X%, only rate X%? other X% EPS any lag drags of is CAGR conservatism? Or besides to Just that if are to degree make the growth

Jeremy, year, So saw as Peak Signal it guide, would in you to step-down $X.XX. I just you the this 'XX $X.XX the say from saw in 'XX,

this bases we'll these down $X.XX $X the time, that at my rate step from for little can traditional we're truing our going year. a it's and this growth, base allowed million the lag, I prepared we between $XX to more up earned we're rate $X.XX. bit another And of Pennsylvania regulatory the that, but minimize everything in that's our Ohio see after file year, billion when in returns But then that to and any remarks, difference returns. You'll to same do mentioned

Yes.

as plan. the Signal and in quickly that as of our think regulatory part Peak note really, really to mentioned about that improves, quality our our I and decreasing decrease the important pension Jon growth component it's that increases, happens and earnings they traditional

as growing a risk profile earnings, it's So reduced benefit. well. It's a also that's just not

Or that Very just Pennsylvania, customer will I of helpful. of of to just back, bill Ohio, guess, wallet see, is And to quoted But forecast it wanted then represent any think color Jersey. over share in it. impacts. Got can some helpful wallet the provide you in expectations period? the bill I far similar I share guess, kind to as numbers go I you wanted And there? I there as New

gave was It the -- across share is. you that our X I wallet an average That numbers of was of states.

of very very, low. -- and those, any it's in but significantly not one So different it's

with Instructions] Our comes Evercore Lonegan from question Michael next ISI. [Operator

over out increases you've this increase of taken less year So O&M and larger that account some you've your and business than talked X% sustainable time. after then about a for

presumably, in or existing of planning room costs workforce how within years managing on to Is your out all your of increase just on of the ramp-up there my over the projects. expand CapEx wondering, significant your to complete you have was X% is planning out Given work guess use I more to that those level? take O&M period, you'd are business? the contractors

this. what is we of we're A actually that say increasing. about I'll So CapEx talked lot

reduce to had talking through success be utilities part be premium O&M. O&M our to part regard. O&M on forward So time how in anticipate it's are And there's like focused in it CapEx, story and we going that's it's was that, here about tell been able very getting going do And what that forward we're very, to going of together XXXX. every been story an that we're about we've -- continuous related just always to tail they're continuous we're doing with able our but associated improvement. recent not it's be going and you going incremental to forward. of going improvement. we've recognize going We see directly to in that And any we've well-functioning And doing past to our what how

Storozynski Our Angie next comes Seaport question Global. with from

picture bigger a question. Just

seem excited associated companies, load way centers, through data to actually load about that generation vertically own investors So but through utilities accelerating integrated obvious play growth the trend, with the this this generation. growth also

it. And if mean benefit business. with I secondary expect do T&D wondering a CapEx wires-only improved affordability Virginia into as either higher maybe because translating volumes. again, you have name growth, this except I'm or to guys just higher You associated load the you of

to accruing well. you if wondering Just see you that as benefit

in you my in of I being certainly PJM X absolutely I going wires had a X aluminum you're Northern at We investment Thank Maryland. company, in territory in as loophole out center for scale associated over late service smelter have the what's is hills question, opportunity there. unbelievable Angie. last on go recreating out to that's the it's our opportunity. going at of of out transmission states. an mostly are earlier former something Virginia, we center kind the to the quantum in going right, had the And development our for see much it But pleasure on answer a that Window what's remarks generation on They data Open the the incremental to Maryland don't that Western the data a do. got And question, out X of with footprint of there. $XXX million. mentioned of We and site of year

the high-voltage data moving in dirt, one be in these stop largest center that have the and middle where of go the investing, just now, you space where of So to ground transmission the turning complexes and used right build world. they're to smelter lines they're they're

Ohio to it we're over as West for and So It's we're New Maryland. for and in well, coming going Pennsylvania, hopeful us to Jersey Virginia seeing in be time.

it's for and create and opportunities incremental coming it it's does real So us. investment

one just follow-up. last then And

affordability. So mentioned you

than rates Your obviously your are so much peers. lower

of underinvested when per environment, rate these look I'm Your investment happens of assets all power just price wondering environment power But in a the at given low price investments growth, customer. base acceleration low this load seem sustainable. or you is because not

what plan just happens So to up wondering investment when I'm that power prices go meaningfully.

customer of component. And that bill commodity so because the meaningful increases

So it's a question, good Angie.

be prices think things saw period Europe. that and like. the we we've when really, of for went And to because the some going already war going auctions in polar that have we seen associated really the when we Ukraine out high we I the during of in prices that some what's of thought were with like in on

last X through I price really spikes Ohio, customers, in those beginning And of our like day some the on of year. went June started to

go saw off. rates, customer we spikes through those price to So they're some now of coming and

are earlier, our and through those lower printing lower Jon prices we're having As mentioned to that are customers. passing prices auctions

And so things see value prices some in being wallet of a our all us our still moderating represents There a are that don't are low. are so X that that I is of for big significant again, states. electricity that So concern. share customers as impact. to low The

question with Associates. comes from Glenrock Next Paul Patterson

what to rate And to term? specific of a being a wanted can the associated see terms with it you apologize rates? is be means, more obviously, of touch little what big sort with is you're of base long bills? Just right? on there, sort the that increase, range there's planning what a little range you bit again. trajectory elaboration as I in Just this Or more single-digit bit that

this so Jon. Paul, Well, is

So I would think we the case that the tell low, you cases rate last year, as the are single digits. filed single about since like increases digits, we that this low

average. So on

But case, rate since X% average X.X%. was year. it's a the on than an probably Jersey last less basis New

And been? digits is see that's -- you -- going what forward? you you single what low Is when guys that

I this to you of got Well, it think think way.

We haven't Ohio, in in Pennsylvania time. case quite almost some rate a for for been in we a haven't been decade. over

time do the of I So it since last average there'll be when think it's increases very out But case, you manageable. some there. rate the

And you're do any It [ a that you I had ], sort settlement of about on mart in then you now staff Okay. of guys about There was possibility? like Grid delay see know before. thought testimony. finally, looks talking hearings. sort

litigated You this point? expect at be that to fully

table V, ESP we're that. always that frame okay have and in And discussions going to think for we're the at go outcomes. Look, at the in the regard, hearing we're hearing. with think where settlement we'll always open they'll positions If to We like we be settlement to get Paul, that's have option a we preferable. to positive start people's any

to constructive And as it being even we hearing. process to a so we if view have go

Our next David question from Morgan comes Stanley. with Arcaro

Peak strategic wondering, refresh us I Signal now? you're was about could the that on for options that thinking business as you be available just any might

past core In not a us. of We've not just out options. quite Obviously, this that It's in not lot environment, a business It's buyers of frequently. looked lot we at that several there's there's times. for at a there. the look --

moving going grand fairly you that it's about be our things, the part if going same limited. of to of last it have scheme And it's forward. it's options so the in minimis such that a the of de had not are But think the to couple company impact years.

Sophie Karp comes question KeyBanc with Capital from Markets. next Our

balance sheet my ask been the terms shape are questions completely about been goals not, you incremental this completely if happy kind strength? sheet balance most -- you here Or sheet. Are with answered. what answered have the are Maybe of in just balance questions you the you credit I of my have point? of can done? And that satisfied ratings, of incremental at Most

you for Sophie. the Yes. Thank question,

total off most management before in anticipated in raise this of That work the Board coming intentional pleased are of last billion March billion sheet. $X.X for sheet transaction, by the to going that We to been that really of the Brookfield get in sure, we're incremental balance shape year with got strengthen of I that XXXX, caps the purposeful this with door at what's the point. the the over and X a about here, $X and team years. a has balance even the

So we'd with at today today be being sheet. by we our able FFO be associated that actions XX% positive XXXX to out for the of in anticipating invest laid strength position a to end at that balance anticipate in And regulated rating our you way we're XX% range. to the of debt the We the we've agency properties. are being to of

strength are really really, sheet situation. balance pleased we we're a from So with where

company to in range, with story. in Brookfield for we with plan a if we very another add, or the way. when company get $X.X really and followed that's And with equity all about billion. And And XX% transactions Sophie, second announced a would probably strong FET by Blackstone from and where a transaction I we shareholder-friendly to it then Yes. it's the withholding plus in back it did Today, up late better started that XX% think with just it And the XX% XXXX has you a debt XXXX. come

and balance the about strong that balance we is headed, So this sheet sheet the we're where have. we without wouldn't plan have capital excited

Anthony question next Our with Crowdell Mizuho. from is

I questions, appreciate asked the seems a X I you've what you've a It CapEx guess, all Shar update. them planning. you had I were X of just, had But -- accomplished had big months. lot quickly though. that

Just ahead, expect? we what should the year

thank for the So you same, I think question. of more the Anthony,

businesses we're we hires segment how about key reporting some at I key the of have to we're make. that. So that about the to services hires how shared we've X executive of we're major mentioned as X to people talked and that looking for changing made well. need the we a reflect company end reorganizing the we that XXXX, more run The our

that, we've execute against on in that out progress laid we we'll So plan as to today. for team the ready the have the you make help move direction we've and then that described

out against we've and you right fantastic So have. we way execute for company manage it's really the the that getting the in plan the that seats to right laid the people

the have end We conference reached this for today. of question-and-answer the And today's session. concludes

You may disconnect this lines your and you at participation. your thank time, for we