Xcel Energy (XEL) 27 Oct 222022 Q3 Earnings call transcript

Good day, and welcome to Xcel Energy's Third Quarter 2022 Earnings Conference Call. Today's conference is being recorded. After the presentation, we will open up for questions. Questions will only be taken from institutional investors. Reporters can contact Media Relations with inquiries, and individual investors and others can reach out to Investor Relations. the Investor to Relations. hand President, Johnston, now and Treasurer will call Paul over Vice I Please ahead. go

Good morning, and Quarter Earnings welcome to Xcel Energy's Call. XXXX Third

Chief Van Joining Officer; and today are Frenzel, Officer. President me Bob Chief Financial and Executive Abel, and Brian Vice President Chairman, Executive

needed. guidance. results, our we if XXXX share and that and developments, others update recent and call on answer have will financing are provide we addition, our the room business morning, In to accompany today's website. discuss capital plans available Slides in questions This our XXXX available regulatory

we metrics. discuss made are As Significant today's earnings a reminder, measures will results comparable GAAP release. anticipated some of could earnings that that in may the measures call Information Bob. the to information. reconciliations turn comments release the over Today, are forward-looking described in from our those during are non-GAAP and certain contain to cause differ call I'll factors our SEC included our on filings. now and

Paul, third quarter Welcome earnings to and our everyone. call. good Thanks, morning,

recording our share Let's quarter, another in solid $X.XX share of compared $X.XX We per XXXX. had with financial for per results. XXXX start earnings to

growth We're any and community base we've benefits resiliency investment earnings a investment significant to expenditures initiating $XX.X on our our plan objective. which delivers and to This continued customers' supports low earnings electrification and allows rate attractive our enhances and transportation, excited and Our per keep returns for which our generation X.X%. potential execution practices, to the $X.XX about Pathway vitality plan and guidance our of past our base growth share, of transmission strategy we Power earnings advances is are that energy years. while very over X% updated EPS assets $X.XX reflects clean generation Colorado It bills XXXX robust, the in X% new capital resiliency, of customers, Minnesota to investment or is with transition, X range for integrate which generation as Consistent approved renewable long-term the track, reliability narrowing are beyond 'XX capital Colorado per plans, Project. are plan, in leadership. additional investors. share. also resource long-term of billion next And guidance base and not $X.XX of result, our include does We're needed $X.XX support to plans, our reflects fleet to renewable delivers it our provides

second we rate midpoint. clarification in of of of expect XXXX, the assets, which billion, result X.X% at incremental growth in base which regulatory to further half in $X result could these would expenditures For billion $X the capital

plan, improves of capital and environmental the base, improves financing reflects quality which metrics, risk, credit of IRA, reduces updated the rate benefits. the extends the Our and delivers growth benefits and rate substantial customer

the quarter, also for transferability. and which the passed Inflation and solar, Reduction sequestration wind, into includes During hydrogen, carbon nuclear. Act tax credits includes law, It credit storage, extended tax new was

and future. Commission customer in benefits substantial tax local our their a our for company-owned advantage liquidity makes customer electric for relative our our clean The depending is provide lowering the from The the credit and leadership will existing thereby reliability keeping cost affordable metrics. of nuclear improve the will key Some nuclear energy additional production the and combustion assets. for increase ITC. credit customers of tax into while excellent carbon benefits customer include our improve tax production example MISO blending of IRA electricity gas competitive of the affordable. projects solar credit pricing of credit for distribution that systems on our and credits support. into production help turbines our our for United marginal An the which hydrogen takeaways clean Sherco installation in transferability should inclusion tax the recently by approved new continuation top The IRA strong service with in in was and solar stakeholder footprint Midwest low-cost, a the delivering go that This customers States, Solar The credit X largest in will will more will the tax proposal XXXX. the XXX-megawatt Minnesota lower XXXX solar fuels our be to facility bills the

qualified cost PTCs to we coal retiring renewables to both our our benefit over commissions nearly megawatts project Following approved even Earlier reduction projected is by our the reduce next customers. of resource levelized of in capture are After XXXX. Colorado which anticipate XXX that the is energy to Due to respective of recommended year. This will Minnesota scale in our the the of in year, will submitting decline facility. to and levelized and cost in projects the and half add by substantial resource an reinvesting of were our to the carbon for These both Minnesota issued for plans plan to decisions are a year. next in request chain approved to expected of the recommended a after the of later an utility portfolios IRA, pressures. XX%, Sherco of We've XX, solar XX% and issue benefits second evaluation Colorado middle the prior achieve final community commissions portfolios this we for our significantly solar customers. and around but these and this supply IRA proposal year plans IRA proposals, renewable passage, by as the for accounting the the inflation bonus community systems RFP passage the expect

power recommended We portfolios projects agreements. of mixture expect include a as the assets purchase generation of some build-own-transfer will well as self-build,

our plans strategy, with for generation rising Fuel provides Steel valuable which hedge against Our our resource prices. for a are consistent customers commodity

billion nearly XXXX $X of billion since customer to our savings XXXX. in projected $X generate an and example, owned are As almost wind fuel-related farms alone

included energy were fuel case, investment tremendous not in an shows savings in benefits our customer being the of transition. it the these early leader While clean

which investor improved water disclosure to including ESG practices that, human further an of goal, recently our Brian. an our adopting to ESG managing a risks leadership Energy's broader daily's best as advance management to significant continue were from and We AA outstanding of progress, upgraded and the and also rating for with score. greater our opportunities. It's company nomenclature and accomplishment leadership. XXX named business as it capital ESG companies, We recognition is most MSCI over management their also leader And our ESG categorized is governance in turn I'll AAA Xcel reflects to continued

share outcomes We Thanks, earnings XXXX. everyone. significant for quarter Bob, good share quarter, a with earnings by morning, recording the included share, compared quarter regulatory third and riders solid most $X.XX per per per for and capital $X.XX had primarily of higher XXXX recover drivers investments. following: electric the and the by The driven in of $X.XX earnings our gas natural increased to margins

lower increased In lowered mind, the earnings $X.XX Keep tax addition, by in share. per production ETR. rate a effective tax credits

reflecting back earnings taxes, interest were earnings other $X.XX to and share these reduced are by by which taxes, by However, to which earnings largely and expense, depreciation through expense Higher drivers increased and program, electric per share. per decreased lower share. margin customers combined earnings other our per O&M expense, neutral. share, $X.XX reduce positive $X.XX Offsetting PTCs items property are by decreased investment primarily capital higher per $X.XX earnings flowed

Turning our to sales.

for annual in and results The sales management $XX Our driven and increased businesses, customer year-to-date while X% growth programs, X%. in by XXXX, cost This economic strong represents million inflationary third largely electric service of increase pressures. O&M approximately year-to-date territories. more a growth pressures increase of sales Like of we weather-adjusted by our investments and to anticipate year. C&I expense. with are expenses Shifting inflation. higher expectations technology consistent modest for due vegetation due storm are next activity X.X%, the our O&M by to expect step increased sales we now to driven facing other quarter, X% sales for relatively costs, an

We XXXX. on number However, progress made of a we regulatory O&M proceedings. anticipate flat in

During approved $XX Yuri the disallowance. of including the all million costs storm recovery with our quarter, settlement, of Minnesota Commission exception full a

in the of resolved of exception Texas. Yuri now recovery with all have We our states cost

year. pending gas gas of and we a have a ratio increase of X-year And testimony. X.XX%, rate anticipate of an Commerce this increase decision in case, million, next in of of case, mechanism tracker. a of and a equity on ratio XX.X%. equity the a cases and also rate rate ROE constructive natural Minnesota. commission rate received $XX an which ROE decoupling intervener XX.X%, We we Minnesota is reflects and rate We based recommended an a tax recently X.XX% electric of The electric In Department million settlement $XXX think a settlement natural reached property authorized a currently comprehensive

reflects In and wind customer for capacity the nuclear depreciable the addition, Monaco farms. revenues auction plant the of the and extension credits lives recommendation our of Department of Commerce MISO

on expense. they reflect million ROE We $XX average gas of year-end The X.X% ratio October, capital X.X%, are million with and In year based the rate will Colorado can an approved of of cost incremental XX.X% a equity a of a and depreciation settlement. commission meeting an of to base $XX also Commission ranges parties historic natural if a as with weighted constructive our which provided. test of the the we rate reach see increase approved case, for reflecting

the result a by natural part filing remains our of case that Colorado of As evaluating is we the a as options are of valued another gas step in business denying rate the increases, Colorado the critical infrastructure energy Commission customers.

to later rate and future as first XXXX. filings, rate far As of the electric New quarter cases the Colorado in file case year Texas Mexico we and this plan

Solar $XX.X and generation. as investments capital plan investment, natural reliability proposal rate pathway transmission health growth our peaking with robust improve reflects the to a of also ensure and asset significant Sherco other enable base. maintain retire plan investments renewables X-year issued resiliency using of system renewable a with level plants, reliability base grid we've along a X.X% base reflects a Power XXXX Colorado mentioned, including experience. plants Bob our includes As and The billion to forecast customer It coal we The to and gas as facility. modest base

capital and Minnesota with resource the incremental investment potential associated anticipate renewables also for Colorado We plans.

capital billion, from investment would to plans $X.X in which resource include XX% of billion megawatts XXXX $X XXXX, additions proposed ownership. assuming result approximately to of Our X,XXX

In generation, sheet of need $X to debt Colorado for can support see to and balance expenditures. while our credit plan, the related incremental of lowers our of We've plan fund addition, billion. we've updated transition $X billion maintains an incremental to needs investment anticipate strong to to assumes Compared for reflects billion potential financing the reduce we a combination Combined, $X.X the CapEx which a metrics, cost which of for by cash majority improves ability $XXX our The projects million to tax credit transfers energy million, financing transmission billion transfer of our increased plan, $XXX the customers. $X.X $X previous capital equity IRP. and we renewable the clean our to a billion. equity of X-year

Bob incremental debt a reflects conservative financing roughly In our access anticipate and increases maintaining we I financed to of to levels favorable financing projected addition, sheet maturities. details. credit market ratings minimal a to metrics, equity customers is It current which more we've balance a IRA our and approach structure. the billion benefit customer important to This of any strategy, discussed while capital credit of critical benefits, our will plan the rising but add wanted provide and variable which at strong flow few Tax will $X.X maintained cash recognize capital our needs. a reduces in liquidity, is transferability that and current and markets. and be longer rates capital credit balanced that is solid always

million projects points improve improved from renewable time the The our metrics of We Our basis after the the will billion forecast approximately nuclear credits additional the drive IRA. solar debt We wind drive could savings FFO solar project decade on and our extended X to projects new with later the that anticipate by period, of PTC even and equity tax X XXX due owned during this customer renewable decline years projects and reducing credit competitiveness PTCs adding XX% in potential to by tax IRA and XX% $XXX XX% over $X. by along of transferability to needs. adders bids. capital next and approximately to pricing in savings. will XX%

confident guidance The and Sherco constructive our the investment natural of take lead with long-term per latest XXXX We material updated anticipate case. upper guidance earnings to don't reflect XXXX our our information. of X% X%. remarks. range project. we are our dividend share. growth with that, sheet. Commission any deliver consistent questions. is a XXXX Commission $X.XX earnings from to rate guidance that keep We're long-term existing wrap our of our our Solar a to as $X.XX was $X.XX with growth can to long-term approved guidance settlement and XXXX The Operator, consistent also We And now as our guidance Minnesota the on we with remain rate our earnings initiated customers EPS earnings and our We're transition value. Key energy passed release. to our half natural our earnings. We've to of XXXX will growth program With AMT our impact which per our range. objective Colorado credits we those assumptions it gas prepared robust We a in This concludes continue initiating Shifting makers’ strong, significant also the provides base up case. customer to Finally, we within clean reached share, earnings capital approved earnings X% to IRA growth our for updated quick company. benefits for result assumptions We're we I'll transparent the customers. and low depreciation range balance range in in $X.XX objective tax X% narrowing announced Minnesota our rate gas narrowing rate. summary. detailed

[Operator We our with first take question Nicholas from Credit Campanella will Instructions] Suisse.

various offsets it of of with us is more kind you decreased is helpful. rate I the give off. CAGR I the mean, plan. guess start but needs. equity any the a same. I'll raising I just to you So you're clarity tax be transferability some CapEx, are in offset The impacts, what still in base just believe sense that would that there Can

a I'll mean really customers handle -- And Yes. our IRA, tax And Absolutely, increase when a look of and think sheet our our we Yes. the at Nick, about financing is would it's cost when us. for projects. plan, offset majority because around of asset, were as I deferred that our an renewable huge win and balance one. the and there on we credits transferability. tax those which

sheet, to balance asset projects LCOE able monetize solar reduced wind our So and we projects that overall our cash by being improve tax customers to and our them, for on flow. lower the our

that reduce assets the increase you vacuum to So do on a sheet. but us in quality think have lower Much basically allows equity the needs, of we tax steel rate as it. ground base have CapEx about base higher rate in our the our from and balance it a and

tax have clarification, currently those sheet, are not sheet Nick, balance And in as a our balance Tax just without they on but would credits our future. credit on been the transferability

in then Minnesota, of Can electric And think engaging getting parties Got just rate just the that need and should were dead in to if across you we get to? mind? there drop date finish this there for a settlement. overall give case you're level helpful. of if a sense the And confidence you Like hearing you correctly, then I done helpful. of is possible kind kind a I it That's in That's us have it. heard is by line? a date you

think Bob. framework first case. in the -- of on the to we've of are hearings rebuttal in and Yes, as the question. engaged the that a or think the I Minnesota gas middle We're items case parties, for December. Nike, the in electric and it's for with some sets middle us, got Look, testimony the foremost, case, Thanks the behind I electric good

target I So opportunities. that deadline for as we think settlement a should

We will with next Stanley. now Morgan take David the question Arcaro from

gas Maybe the arena, wake be Colorado you decision? rate when sticking regulatory on recent in might in the go wondering time of the case, next this just on the

the filed a commission, with question. we're case. for the for Thanks David, gas it's looking X-year forward back Bob. in January We and case the

the We sorry, means we back -- commission XXXX a to a go capital after, visibility year and need and historic gas new case. case test into in granted for we have expected the the continuing in real likely year have expenditures case, next sometime year us

then you the at wanted Got to was now? thing And other it. about wake check of sense. latest prospects opportunities opportunity for what's Makes I become the buyouts on Yes. the Does bigger for thinking repowering and IRA? the to your PPA a look that in

one. take I'll Yes, that Yes.

absolutely a way right? $XXX PPAs number of years. the bought What over for it about at, we past were million And And about because extends win for we've out customers' the our our set brought opportunity and think I it, customers successful PPA, time, tax We out new did the us, in buyout ground I been a win PPA put for repowering think money. long credits we and forward does. the qualifying we and of successful out new right? that steel we of on side. PP to buy -- ,a were able strip for our buying it wind by a it the save And

So pre tax opportunities IRA, down your buyout down. the stepped as credit stepping were

solar we'll of have opportunities, can buyout farm. and solar repower PTC if runway at Now evaluating on since we a a also, XX-year-plus you PTCs look

capital there's X And our So wind gigawatts XXXX look for doing at longer you you our term, about right as over those XXXX, save customers' I 'XX. repowering Minnesota longer potentially in of we're repowerings money, that and mentioned is in X,XXX we'll of none now. I X-year like in runway we think wind in And with upside. buyout XXXX, and or X,XXX megawatts 'XX put And a think service between is forecast our repowering think as our plan much opportunities. repowering, is that as

PPA think opportunity the opportunities. our really extends and buyout this on our So own repowering I

Yes. a clarity It hitting CapEx helpful timing seems into the just plan? That's big crystallize could terms in color. as opportunity. to Any like of or those when visibility

I Colorado think Minnesota X that we'll will what we RFP Colorado, the that talked is about in The the RFP RFP mentioned, could be we solar. with later focused later align like middle we potentially sure get mid RFP something RFP could potentially launch call seeing potentially see in the resource an we those see Bob acquisitions. in and first the bids to the -- all-source so on it, make time. follow plan you'll we that kind and the to will be other when were visibility Because want next could of year, this in and year processes, we of

So find the our to more time transact for I'd first at willing right? Longer that's at customers. much a term, is opportunistic, price probably look it. that's that developer got beneficial You it's to a

We take with from next Tonet Jeremy the will JPMorgan. question now

Jeremy, nice headline.

maybe just over in thank more or portfolios? what asked MISO life fastlane, CapEx, wondering with whether Just opportunities, on horizon additional incremental could I be on if for you upsizing come of but could time? on LRT that's the thoughts kind the specifically, dare details And the today -- competitive what future all here, in

the would things. to the of talking the Colorado, we highlighted probably the mid-Xs. capital transmission $X I we the billion what That pathway of we've this question. A $X Brian growth the need couple the in have on power the And is appreciate part midpoint better generation in Colorado billion. to of At that and rate opportunity been in would integrate both we as competitively base that, year. those Minnesota as bid that call well for is about incremental renewables. incremental

I certainly comments that’s -- things to to buyouts our Additional the caller's you repowerings PPA things sites. about, in previous starting that, think around mean, we're heard early and

for those haven't will. certainly We but we around the community, put bookends

some doing have to the the of solid acceleration economics on expenditures. what towards intelligence think generation climate renewables that the in of We're happen the grids Southwestern to evaluating our very distribution we of harden We that electrification territory, plan, the the to potential the the enable for as in about think are also plan. transportation our we see I can plan Those territory, will be we're do be about. there our about of change. feel think maybe Secondly, and the an still solar not with end grid down But service middle the XX-year in electrification SPS IRA, need in would we big and beneficial we gas. that and wind our X-year in with resiliency you back Brian, continuing anything. think need to I buckets of make

just We're our at side in add we on projects electric ITC or One plans. on for a as to heat plan, potential working on Then also would the nothing an side hydrogen work the we're X-year if some opportunities our interesting Yes, have -- whether opportunity looking that. we there's long-duration the storage. on storage opportunities also more I clean stand-alone couple gas storage our with LDC there. on through and store looking is

think I through a as incremental benefits there's our plan So think aren't in good call the we captured number IRA. opportunities it, of the of, that overall

wanted great to more there. I And just bit Got it. to into That's 'XX a guide little go hear.

I instead of growth next X% think year. year this X% there's

or this thoughts, this wondering, kind as XX the that that guess, to you've us you thoughts achieving Just guess, primarily of flat I guide? And if done factors in the on year could 'XX guess, derisk I to just post-COVID some, O&M XXXX, conservatism here? including, outlook, I is normalization how into work give

Yes.

On part, about make talking sure right? the you're sales, just first to

Yes.

Yes. Yes.

both, right? I a little It's it's think framed little up, So the of a post-COVID bit way you normalization. it

while more do We to growth. Colorado that of continued for come we come down economic pre-pandemic like where this down And I see we expect we expect levels. customer in year in other UPC use towards resi to residential to see jurisdictions kind think saw has

call could conservative. you it So

to activity. been conservative flat, seen certainly into this the were economic up we've year be year, and and sales going thought X% we going with our forecast strong are We we have

and right, XXXX year, On flat the we through M. the on O&M side, have O& went subject since I yes, we're to this pressures, been certainly inflationary we think as

years and inflationary our had X pressures, we higher between in increased some investments being also, plant costs. prices we're coal, plants was so running the of storms more given gas year, and this and customer much coal costs, flat, chemical higher our had that platforms change So

So the year next guidance to as QX time. QX, year, a had year, good it you and the it look kind in invested we this from this right, at about we good and we when have of think change year, if we

So think that's next in a flat rebaselining we year this setting maintaining for programs down year, why our and improvement ourselves about up almost continuous doubling into next year.

Got it. That's one, I all last very helpful. could. One if

on electric you the as And gas any If from increase might there. be to see continue step on you signal rate regularly able are Colorado to takeaways the speak denial Do the a this side? there filing commission cases?

I wouldn't the between gas case. the and have electric contagion, Jeremy,

this impact given increase Yuri of think commodity the the year gas in case. storm was the I particularly winter on sensitive

So I'd of through too don't electric read no, I think sort the much to side.

there. reliability We customer continued growth system for to and are in invest safety continuing and that

the the sure we balance to having make metrics company. we're So for that of need right financial healthy

to a rate going are we case So file next year.

I for And longer working Colorado. we state goals, Really, just to the how asset see clean through and aligned side and plant looking it. is aligned side critical plans planning it I about our and Yes. resource like science, the climate forward commission achieve side, X for targets the they're XXXX with XXXX a net align these help side. we're And LDC gas think carbon in that us with because term reduction and and and are on us stakeholders gas about on the will the think LDC LDC heat demand in interest the on with the I think our really customers on our the

that, And plan half the heat put on filing year. you in to time a just from a next the sometime see second clean company should line of

Got sense. lot it. of That all makes a

Just checking.

Chopra will question now the from take Durgesh we with Evercore. next And

quarter time. Solid you Thank here.

I Brian, had Just for X actually questions, you.

that number, mentioned this billion between in your included think billion CFO Just in X remarks, $X.X is one, right, $X or plants from but in the the I the CFO jump the you tax.

Correct.

I for there for just newer how work? Then assets, wrong. about it's that those that's a does maybe it? because how think taxes? Okay. Is say not Paul we a monetizing that market actually I'm newer if should And you concept, heard

just help profile you us maybe So cash sort there, through the give will could X us years? which color the any that of flows

market -- on being X, absolutely. stood great the X it's that. And transferability so Yes, doesn't we transferred. because a included. generated be And that PTCs it's up, XXXX, the any January eligible effective next closely is credit instrumental starting and for it's so was to worked question We very in language and starting because exist year were

think on set right? XXXX. And in transactions. our customers' gets we discussions a Longer that us, it's So there's the set to we've and this had for ultimately been overall renewables save had. have to very get good local liquid for because time bilateral of focused lot up, important for to a local so term, we We've I exchange LCOE cost -- at going projects. to but good expect down we're angle our the customers that talking driving And We've spent of very here for think out waiting the not market up a don't look can we significant ourselves in tax reception cash been where I appetite a money. really we've companies a

able But takes -- transfer feel half transferability. that it And execute a in And confident even conservative, on of assumed being to other up about do this all only the just there from being conservative just plan. in able less we credits of being so so XXXX, we've in to this nature. our had month, set those bit little very we feel the we've in in very financing But discussions from bullish while over the interest we the past corporates.

it. Got

your you just that what the these Am are offset to process credits about be underway. excess taxes is be like currently. clear, thinking already Sounds tax wouldn't of Brian? to in And I able correctly,

are. you Yes, Yes.

We will now Flower take with from the UBS. Ross next question

XX%, base or which But is then just faster. You brings I it's question Nick's out the lower just X.X% forecast, through of of sort previously a at bit kind And transferability it's X.X% and now XX to X.X%, know about year depending 'XX. out I XX.X%, than the to and now little you I of If at little lowered on little growth, X.X% that it's sort base a forecasted was want old X.X% XX%, that. look year to bit. back your growing rate growth of sort your base under a rate to So bit your about X-year wind if sort your before I right? to on X.X% look it of mentioned back growth through to

would you're high that Or about is the of And to I end correctly? seem of it that bit of your guidance you 'XX. billion a question that potential guess see not second am coming and tails growth most CapEx in thinking 'XX here? $X part Is EPS growth the upside where really I then So pushing billion that me that in little off the in? $X to

Yes.

to we think EPS of the at XX at for the look in we is the publicly X and And when earnings upper it, confident feel guidance for the for our So years. very think, We've delivering I way years that of we guidance guidance half growth. X, delivering about look target it our you delivered straight past annual half our Ross, there. really guidance on upper in XX range we when

we place. I of plan a So in lot put have we been generally plan nail we have the the it's put a on place, and incremental think -- known we head. about And feel Yes, conservative in the you hit upside. to good

we the half our years If plan back think going that be in slides, X the capital you look of of at X back where plan. or the is the of to show we incremental

that's the growth. I as to base we think have of it about year-over-year think that way strong continued So kind rate

Okay. build you lot And are maybe fuel forward of been are how as customers any thinking natural natural just keep up through process? we because there? regulatory Has deferred year-over-year? generally? sort prices with about we gas just do are that expenses about a of winter, pressure gas into Or the how that look How you thinking

Bob. it's Ross, Yes,

on state our energy on natural eligible very been identifying levels that active impact and the in LIHEAP some benefit of in been our mechanisms gas up programs. from is customers the We efficiency the active are our recognize mitigate in federal rent not know of commodity empathetic portions are the we it then the certainly customers pump, point starting significant in their very rates are gas state to and store. this customers it We feeling a it the at and even Colorado at grocery some who to bills to sensitive in in and and lowest they're working the impacts We've winter. we may on start for the the federal customers. have the that directly to find LIHEAP our feeling with they're they're company but at of enable everything country with trying funding from to customers at feeling those to secure and level and We've

impacts. mitigate the doing we're we So We're can empathetic. to everything

winter the from jurisdictions storm of We X the have years. anywhere Yuri X cost costs in extended to various

So go that we piece, and winter into active outcomes gas regulatory our time. as communications have we mitigated customers but on the with very

And And We've gas as add, Steel we really roughly and a Bob, LDC on I'll rising well you with viewed touch hedge up costs, commodity exactly Fuel our right, right? electric. We just talked side, set being we've XX% ourselves what can side. against for electric always that's we're investments, the see. the those on

with our owned $X alone to our $X in $X or approved customers fuel-related back Now $X farms to is gas over we're those their the and $X -- when avoidance going billion we benefits year range. wind to in provide this got

now. So investments customers our those think wind how about for are economic

are. feel on also the bills we lowest we side, electric where third about electric have the of we side, the And So utility the country. good investor-owned on any in

So we're at really a point starting too. good

we're what of customer And said, spent so manage customers. on conscientious a we Bob and impacts, I our time and focusing bill how for mitigate lot can obviously, of very those

Wolf with Research. take next Steve now will We from Fleishman the question

of FFO obviously FFO to that you forward? number, think for to that? about that your should debt we I debt very target going now Or now the So strong, see, great mean, is a how that's kind XX%

now right FFO debt then Moody's the think debt has right of about for to going what about of to at between to improvement little to about Steve, metric see threshold And holding bit basis I threshold FFO that a it a that that and debt. the pre us debt balance way points company to But conversation have XXX-plus total and XX% great is. on -- strong IRA. our certainly with a relative is to

to operating of the in combination ensure we strong the of interest all quality in customer. best also is maintain with only holding not have work it both commissions have really is really company, that -- our because credit the important credit at but So -- too, because we but at quality, at strong it to companies those the look

and the comment Could said $X incremental it finance with of you kind you capital in clarify what the Okay. that capital mean debt made the of that -- new you that I it to clarify way about And is you'd better capital, means? able Does the think structure would current billion $X just just billion equity to consistent you terms is with new structure. current it finance or to be your

is It structure. with capital the consolidated consistent

Yes.

would equity if you there then -- more needed be that fund to So

timing all of more on caveat that backdated, it's I'll flexibility. capital. more with that depending maybe the Yes, have you if

capital. just we depends and sitting and really of visibility magnitude it timing more here really that's get that once we So but on the timing evaluate it today, on

Okay.

is just I it days. kind Yes, sheet, of balance mean strong these charts because XX% off Okay. just -- love I the

but it's also it's better -- So to than obviously strong be not.

customers. us said good We and the was our for IRA for Yes. good

speak to QX So had more time on be last hours We it this in about spend tax], call XX in now. happy only call. earnings so more glad to depth to able about talk [digested to it about earnings it we're on

And Okay. on the savings question, solar just the cost data wind. on you that IRA another of gave then for and the all

the XX% of Sherco and lower like So data. some

make inflationary a of been because lot Just there there have the understand months. last I starting XX want point I to sure just pressures for the like

cost so seeing inflationary back is occurred? I understand to you already had make -- to now, be you going just baseline those baseline before I of sure kind Are want for pressures you're that going to the these you'd including where that the And are for when savings, these. that?

Absolutely.

-- filing start Sherco initial I'll chain our pressure. very with with the filing includes initial That higher to So capital revised the Solar. Sherco from supply -- costs address to

that those to and -- all pre-IRA then So post IRA. is includes pressures

of panel that's it, So everything -- overall on capital that including call pricing costs, pressures the kind with actual

or so the goes the -- XX% XX% to the So filing to initial back revised. the

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yes. are So savings, those

time. have value assumes that for you a XXX% assume now escalated say, qualified X that PTCs When the to tax at Right. as versus farm wind PTCs over would cut X XXXX

megawatts to half So that's are decade. our thousand customers those of or really add see X-plus the back we thousand several when in where that going megawatts

Okay. That's great.

from Our with Sophie Karp KeyBanc. question next comes

why at that to presumably zero-emission the any opposed there. a you process as a you more Energy hydrogen nuclear I times could also, have of was dispatch load plants? the the makes I and into on if sense about on milestones this to nuclear can describe you may And plan could Just electrolyzer, curious at could give it plant, curious bit is facility collaboration the variability. base with color if Bloom and -- which this talk guess, have type all try the produce grade a little wind

nuclear plant of shoulder it. processes the Thanks plant. our Sophie, have our is, the it's from months And concept see point of in concept as energy or for -- electrification the think a rather and not Island power wouldn't on hit the plants, to you electrolyzer our do down. Energy off cycle we or procedures does. we question. is to you really But the your and point up related were system, the that's recipient high-temperature a an keep Look, pilot gas high-temperature And on Prairie we I increase at Bob. exactly of cost starting of nuclear plant that. we approvals the and wind cycle is, particularly XXX% nuclear to X -- and back and the renewable big or a Department And what

the that but to that raise at use the generator reactor run you power, do As excess electrolyzer, let XXX% reformation you take the you create steam, at on XXX%, steam steam the run don't temperature way. the hydrogen and

that load and electric do the And keeping nuclear plant comment. chose manufacturer on manufacturers, allows power you side. the stability your plant generation on I think we electrolyzer the the plant the otherwise was comment when So it cycling following XXX% while you for would a keeping your be the by reactor at that

online it. as working could states consortium create we should a nuclear interesting add We're aspect and our later our we it pink XXXX. -- announcement the for hydrogen the And development be and think a with of just through plants to around I'll Sophie, it, We're working of a use really probably potentially And Yes. hub is applying how hydrogen. in we DOE in grant. this

we states, hub. And so work a and broader part Upper of hydrogen this Colorado also as opportunity and states our and Minnesota both we in is surrounding the the with in another Midwest on think

operational plant X. a of wind it X, guess, sense. to nuclear if nuclear the avoid cycling guess that farm, right, maybe not standpoint, cost I you is I the makes marginal up cost from marginal hooking a of difference an versus is generation just it's But the plant it a make it wind does

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of is so unique steam electrolysis. And is X of this high-temperature this, aspects the

off steam the makes plant we're it process the So XX% to taking waste -- electrolysis XX% nuclear water, which more the heat efficient.

next Dumoulin-Smith Bank the take question from Julian of now will America. with We

the on here back would i.e., billion with you $X to but upside that around level upside what to on a want itself the that, back materializing the manifesting up about of pick to in in of procurement quickly here How lot predicated RFP just processes? the about think on this talk we've past? it Listen, the could perspective? you And seems high there in the like it. in is to billion you're remarks some used think in greenfield script the the that to It that do near CapEx. can half, real process $X related the do You year. about some latitude real this a about the respect Colorado just to have or be opportunity. to whether result that repowerings front. How alluded that, I I Appreciate assumption of that half term just XX% of flagged you know dynamics your the year, renewable in in quickly you upside terms

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we our long-term customers, much we really So tell is ownership think renewable good as can. we're and going to for possibly assets of to as these strive

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process On the I here? it more strictly going is one-off? customers or sort that former. to dictated a approach repowering And side, RFP be and that done that's through are you time through on there thinking you're of an the pretty the the implying opportunities opportunistic of think line to ability

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I that's of RFP process. would the So say outside

some and the that plans back have plans and But about we buyout the bring come RFPs of part I we would of PPA talked to are concept. to And an opportunity think toward, our resource PPA preferred as buyout that.

and have as a emphasis we So history driver being outside an process of that it of a for an doing well as RFP it.

with to next the results. over RFP So I process with through stuff XX our this and would the fruition work come to commissioners expect the of that as we months some to months X

of holistic More a late year, update, XQ. next maybe say, it. Got by

Across of above. the all --

from question the And we Citigroup. now Ryan with Levine take will next

the that on or opportunities hub to To gas side? wanted of in your both neighborhood is to and the outlook materiality up electric you for the backyard, hydrogen light the in IRA talk hub your the business in can follow developed your the comments. extent hydrogen just I on your and

into And and again, on Colorado, hydrogen for mode both we're CTs, working for is These of so so last the Dakota, states the you came of -- gas. the for our Upper energy North the encapsulated proposals Bob. our the a production produced Utah that's working the a of electric Jobs Wyoming, clean around the at We're conversations, Dakota, out looking again, Mexico And center and we're we're and in and Act a and looking passed South of is time receptivity well hydrogen DOE receiving look what Wisconsin, X example Colorado in production. This energy. Midwest, We've we've Minnesota facilities, from a the as now New nuclear Similarly, in those hydrogen targeted similar system, transportation of got our companies significant this largely system to lot at a Sure. the electricity, on we on proposals. LDC that to year. consortium got was with hydrogen hydrogen identify at gas concept Infrastructure The hydrogen in applications and looking partnerships we're allows facets working Look, MOUs, around for storage just of X off hub. the hydrogen for as all that of like. states, in out agriculture, all providers back at fertilizer those Midwest, We're in consumption a I'll Western states give looking and could collaboratively for and and hydrogen at West. Upper hub Colorado LDC electricity, for transportation. states,

them. The hub fully hubs talk about has X think sort the don't them in we've of billion, of X of concept. I being opportunities. investment to So about characterized $X DOE the terms talked we

think from investments of And you to we've also public of production match And about our funds. would million to the $X is sort them between the the LDC X% being match of a private investments just balance create significant transportation, matching customers it it are the billion hydrogen $X the industry have each as benefit requested $X what those could each. electrolyzer, energy somewhere and to as So of characterized to and plant that and investments hydrogen renewables transition. enable to takes billion so generate between our to storage of for billion to our $X well clean the of

half centered of the multibillion-dollar largely the say decade. I'd back a it's So in opportunity

that you combined Is any already plan? Minnesota some to there around Or is this clear, that's And all disclosure be spending in CTs. of have just in your incremental? hydrogen-ready

CT As just committed that plan, but plan. plan, reliability that's included combustion to the part of included of would our that But none the of side. have hydrogen our assets, the making production in we is turbines Minnesota we've hydrogen capable in resource be

next And we Miller from the question Morningstar. will take now Travis with

answered so the I appreciate on there. my just hydrogen exact the hub, won't all detail question You repeat it. I

legislatures? X of more any policies terms Just in key of you're potentially at key the the in election, issues that looking state-level or changes any or

for Thanks Bob. can inquiry it's we the hydrogen. your on answer Glad Travis, question.

I we've days I as administrations. XX of interested signs, of e-mails away, in lots lots successful election, lots mailers, We're we're all been activity outcomes. and of about the the texts. company, lots On on of think But think with television, a very working obviously

sitting work can with our good any we out having future. with of those transition, that to continuing anything today, really officials. officers into XX-year energy investment don't our I dramatically all relationships is energy policies of the laid and trajectory experience enabling Our philosophy But see our those plans, We've today. customers, our we and look for elected And protecting forward and got our important. a think to going that's I change clean great we

on appreciate rest of Okay. Great. all call. the the the I details

And there are no further questions.

Brian remarks. the Van So for CFO, Abel, call turn to back I closing will

follow-up in in all Thank contact morning. our a and participating look Yes. team seeing with everyone weeks, few our this Investor you We to questions. earnings for call Relations please any forward

Thank call. you joining today's for

now may You disconnect.