DTE Energy (DTE) 1 Nov 232023 Q3 Earnings call transcript

Good morning. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the DTE Energy Third Quarter Earnings Call. [Operator Instructions]

Barbara Tuckfield, Director of Investor Relations.

conference. your begin may You

Thank you, everyone. good morning, and

forward-looking Before you statement to started, I reference on to remind would like to the read including X the we of get Page presentation, statements. the safe harbor

Our GAAP a refer financial is earnings, non-GAAP operating to includes earnings presentation reconciliation the measure. of appendix. references also the operating which to to earnings Please provided in

turn Dave it Jerry Ruud, morning to With are Norcia, And Chairman now CEO; morning. CFO. us start I'll Vice Executive to and over President Jerry this the and this and call

for and us. update, Barb, good a take Thanks, morning, will everyone, Dave give business financial and thanks brief questions. before we your joining a update provide I'll and

the company our start opportunities. and let points, a Now me in by long-term emphasizing confidence few including my

this we these $XXX million. know, have And impacted financial headwinds unprecedented faced plan year. our you by have events As

DTE fundamentals of However, and nature the is the in combination truly remain strong. onetime these of headwinds

know targets, solid a record have we reliability. or sacrificing We do our of financial so safety without and how achieving to

to fact while the most that The alone, clear commitment operating of excellence. been This our and combination to earnings from by of headwinds offset able order we service and difference million low highly $XXX have unprecedented driven these of a forecast. challenges, excellence, point of offset maintaining in have proof a is engaged unfavorable team rate storm the a activity, unusual we weather sales year

transition. from continued and grid future benefits also flows of a the investments energy support the DTE cash build that clean drive and will balance solid strong that sheet the

an who team I opportunities to know for customers are said, and to and of with highly growth long-term we investments. these numerous efficiently. employees, safely Our And execute is committed how who our engaged robust as incredible have plan

top year. for our Award consecutive over the ability the our recognized being My a Exceptional as to deliver this sustainable force Workplace XXth and Gallup I'm and the organization. excellence operate is measured long to the in for team's value Gallup was investors by DTE proud unwavering. communities levels significant decile while our customers, stabilizing earning our that engagement creating confidence by term, continues in a for in team Our area

remain on further that to supports strategic We patterns grid the face cleaner weather the in sources invest further the of changing continuing focused electrification of capital generation. transition reliability, improved and the and

by the activity and automate, delivering The year is to also of next the investment commitment grid on heightened this highlights rebuild years. importance harden our plan. X over And over its XX% improve reliability the storm to DTE

provides of Our distribution to recently plan filed grid improve reliability a system. automation road map our and

settlement. Also outlines plan investment agenda investment energy IRP in while remaining affordability. is Michigan's our very supporting focused This cleaner customer on the our future

This customer-focused progressing electric generation. critical the case support that case. are constructive improved to our are on rate investments toward outcome and needed cleaner for We a is reliabililty

grid. Our leaders, our including to the unless demanding and better the and municipal leaders happen during political strategic customers reliability doesn't we storm modernize and heavy outcomes legislators periods. execute plans This and investment governor, automate are

gaining need the the priorities. onetime need continue we electric to importance our scheduled and their to on safe make, of resume investments deep met service. year. deferred schedule basis reliable to delivering we that We with on a and in a of the infrastructure also intervenors important work essential We also is maintenance work this the rate resume outline It to this understanding case noncritical while

customers. settlement we a for this in were able case, together do need put to compelling to reach a have the work not case for While we we our

that in early expected investment final will support December. order Michigan the the in the state. that appropriately is confident are Commission We Service The is needed Public

XX% nearly million deliver at of $XXX This to the normal our the were on represents activity mentioned, earnings position occurred We range, the a faced second weather EPS year. if the remainder forecast. I our of of we call total As through in quarter headwinds and storm year. that of midpoint company our unprecedented said operating this guidance

in additional and weather severe unfavorable headwinds storm million activity plan. $XXX brought latest However, did challenges these quarter, of third the occur additional our financial to over and

you. So team share the XX not that In we $X.XX per #X as and the #X years, are report guidance we midpoint and per targets. I consistently result our exceeded person $X.XX This in met or revising our like full of have leadership my is from year EPS type to to share. to DTE's team, my

don't imagine you to these like you results reporting So that we can today.

continuing As I final providing case. order on for we delay the third resolution that quarter or Therefore, final call the EEI disclosures a get forward-looking we our wait mentioned, rate will the conference provide to at a in are on until typically we electric we case. the

dividends, extending updated the XXXX, X-year through will in long-term plan, growth early EPS XXXX earnings these We Vantage. our then and X-year DTE provide long-term and for December, disclosures updated equity outlook plan rate our including capital operating

Slide to X. turn Let's

million, through worst company nearly discussed an at received order years. sales by in experienced in impact As ice by the the including forecast we of $XX storm XX quarter, from the of end million a the that difference we the rate of impact approximately storms, last year, followed second the lower-than-expected $XXX driven

$XX And of weather at and million at $XX Electric million Gas. unfavorable

below DTE reliability likely its efforts was On the onetime year as quarter achieving reduction Electric a focused for Electric its result, cost second customer headwinds service. safety, noted over full of sacrificing through offsets And call, we without or would guidance. half we fall said that

the at of headwinds helping full EPS remaining our had achieve our year overcome we guidance. business other to each to units, However, favorability

to time, be at consumed if weather our we on contingency. range and the had So track had at activity, we of guidance storm the and midpoint our were normal we already

we $XX of million million $XX pressure In from storms summer third quarter, normal the than had weather. from cooler additional and

over X years. X faced which we of average storms, is catastrophic the double catastrophic last the year, to this have far compared So storms number

very efforts while And efforts team's number proud this storm safely are we events. for catastrophic said, each historic do during including to budget of costly. the of weather power these earnings. ice impacted are significantly of restore our storm these year, DTE storms costs, That being Electric We a restoration

unfavorable the that our century. was planning was have during was storms, storm Along for this warmest service process. we with one winter quarter different record we a our winter was weather Electric the This fourth across weather prepare nearly Much territory experienced from like seen scenarios The in country. unfavorable And the of the in most for heat very activity, for the and of since Gas XXXX. year. coolest summer

addition has invest weather weather an winter having This more and combined cover to are both to have Electric a lean year, at plans in our created structured we much storm company Our rate certainly the year, significant seen. It was variability. weather than the high case unfavorable unusual at and and been both activity has order. challenge dynamic low our of unfavorable This summer to utilities.

combination all reasonable against a major have planning been these X X scenarios. of Having faced original stack headwinds. us, achieve guidance factors of only Had able target. exceeded up occurred, EPS our X all we So to we would

statisticians occurring is deviation a probability. in patterns As and XX-year look a of matter standard the both same in it temperature at of and greater than impacted, the year, we utilities our number once storm X fact, had all probability a of the of customers

team actions progress entire within has portfolio. finding Overall, the across on company the excellent opportunities made onetime our and management

with guidance However, we third for are XXXX. in the the operating the additional EPS challenges quarter, now lowering

customer-focused technologies. the in ensure to we grid of opportunities let's businesses. climate and front electrification and the on move future investments change affecting affordable can capital is grid, need Two DTE X. have factors of make to significant the build to important emerging reliable Now safe, our provide on our continue clean, Slide to We to we across us our track energy.

we the transform and to towards generation. we renewables investments away way and shift as making also are coal produce gas from natural power, We

MIGreenPower. grow of program An continues large of voluntary clean a important our program this with energy part program, This subscribing renewable to customers number year. new our is

residential in our country, contracted than megawatts to more Highlighting the customers. over recognized tariff having have National any the as load success Renewable under subscribed, We DTE subscriptions largest green Laboratory program. Energy other program X,XXX XX,XXX has fulfilling including

gas affordability. customer our further our of reduces continue gas main all important focus work, DTE sharp we which emissions. renewal at on makes a greenhouse utility, these Additionally, investments with

improvement to continuous culture natural to The drives distinctive cost reduce further shift Our helps from coal also management. and costs. renewables O&M gas

maintain Our DTE reduce energy, mix energy flexibility to well allows costs to this Vantage. customer IRA advancements. future further to growth renewable enhances to supports opportunities us to The and adapt goals for affordability while technology as diverse achieving transition and at fuel helps

what reiterate proven the of a has details to an of operating opportunities support Dave over start Before foundation solid and the I want the turn team to strong record said sheet the financials, call. runway on I to a more investment these long with read to a excellent of at balance DTE a investments. and execution, call I

cleaner, we So providing affordable well our while deliver energy premium reliable total and to returns to remain positioned customers.

you. to over Dave,

and everyone. morning, Jerry, good Thanks,

our start me to review Let X on quarter Slide third financial results.

per for million. quarter translates earnings into $X.XX the This share. were Operating $XXX

quarter offset in million by of a rate lower drivers the in reductions tax of of earnings our and the earnings than start amortization higher the DTE the include the the $XXX for Jerry of Electric in was expenses XXXX. third XXXX. by find the breakdown accelerated discussed. main onetime and earnings storm at with that variance million reconciliation the was partially base costs we O&M Other including I EPS This page can GAAP appendix. is top segment, reported weather detailed review cost cooler The our will $XX driver quarter. You utilities. This that to the implemented XXXX. deferred higher were

the in Operating to last driven The year. was million DTE IRM Gas. by offset partially variance costs. than higher onetime higher base cost earnings and increased quarter by XXXX, on earnings reductions quarter third rate $XX revenue were last Moving O&M

third Let's is move a $XX XXXX. million Vantage to in row. earnings earnings Operating to from and of year, third primarily last to due RNG related steel projects million DTE $XX the quarter quarter the third were projects. new the increase This on

continue next row, quarter for finished expected This of to year. see million. robust Trading to premiums had our the portfolio. favorability physical continued this the you the $XX due is performance earnings favorability can remainder Energy with the We On quarter in power contracted of

Finally, Corporate expense. higher quarter-over-quarter, unfavorable in share Overall, $X.XX million taxes of Other quarter. earned third primarily per and the DTE $XX timing due was to and interest by

weather year. for move our operating guidance activity guidance over EPS our unfavorable Let's business by Slide is decrease to The continued storm to and the causing to us X unit. go revised XXXX

on Vantage be range guidance Trading above said original second below its guidance Gas, we be Electric would and would Energy the ranges. As their quarter call, and

DTE Electric, the guidance Energy we Vantage for Trading. range We and are guidance and are now DTE Gas, decreasing the range for increasing

Overall, decrease this DTE resulted our a to midpoint. EPS guidance operating

year, unfavorable by we we see reductions. case Gas O&M at rate challenging a other is faced by Favorability favorability significant storm continued and driven As discussed, units. weather activity. DTE throughout headwinds We've starting to business our Electric the also at followed with at cost unprecedented, DTE onetime

continue DTE favorability Energy in the we onetime also highly as service reductions all O&M units. new cost pricing reductions RNG from the benefit favorability well contracted seen placed sales Again, seeing stronger power business At and will O&M opportunistic which units steel cascade and projects business. is in additional as have all contracted Trading in to Vantage, hedged and corporate implemented its RNG upside. and provide business onetime that portfolio, additional cost

onetime a approximately per total operating stress much $X.XX a our remarkable year. but It's doesn't headwinds, of that midpoint offset and these we team this reiterate challenges in of for $XXX team of per to this combination $XXX are has offset to serving this what also distinct fundamentals. stronger in accomplished, is focus of guidance headwinds and $X.XX we of of our our to share. processes our is want on improving midpoint have feel challenge, what our long-term a we million nature a experience team important faced customers. continue efforts We're X our EPS to truly our I makes impact to as we from just revising the the achievement of better it share again proud As and million

for we solidly remain So positioned growth. long-term

Slide balance move Let's strong credit to profile. and highlight our to sheet X

will solid a focus which a continued ensure and to maintaining continue solid This by cash positioned We sheet strong is remain strong rating, well metrics growth. supported continued for balance with flow. investment-grade credit we on

the Let on me XX, and wrap we'll up questions. Slide then line open for

in updated stakeholders. team commitment Our headwinds guidance for continues the the operating is experienced EPS additional deliver all third quarter. our to to our reflect XXXX

rate Our a highly December. continues delivering in the and team focused of we our communities. The electric to to continues to execute and in offset engaged the order remains our the as constructive for customers headwinds on majority look to plan XXXX, advance, unprecedented forward early case

Our critical robust capital cleaner for growth, our customers EPS investment generation as we need improve we strong execute focusing that supports on to affordability. while operating plan on long-term customer and reliability make to the

returns total to with DTE balance supports continues to to come expect positioned deliver that that be shareholder have investors a plan. investment the capital well sheet future our premium our strong

As long-term case that, the for is and we we can plan the thank look finalized. sharing for Jerry details mentioned, I today, open our forward questions. With to rate after joining the line you of us

from comes the of [Operator Guggenheim. first Shahriar line Instructions] with Your Pourreza question

fundamentals, to you bit the normal rate, think long-term mean, about I X% So 'XX we early the cadence the you Jerry, as stepped of X% moved around just the growth appreciate quarter. language reiterated this the and but a outlook. outside decisions tough obviously,

base for elaborate a I your you a think 'XX. case CapEx? the color mean, would into rate the will just on be extend the you growth? guidance gating item more cadence for guess, And helpful. I going be 'XX, bit can is long-term as growth that Just the about and more for updates rate thoughts into decision 'XX? maybe a Would obviously, of bit little new we

Yes.

Shar. You bet

to grid a our of energy. the our the our Those transition really intact. The amount certainly, opportunity in to is opportunity long -- remains strong business term. clean the So and in fundamentals remain of investment make tremendous

will are that awaiting the first happen We December. commission order, week and the of

is The December meeting to scheduled it with essentially next X, has XX. dealt but before be December

after when the an of expect in out first in feel is week we roll basically prudent shortly time we rate We order that sometime will order. point order. the post right December, to at is So this

that XXXX roll and investment profile. will And We Vantage. Utilities our do out our long-term capital growth rate we'll our guidance, and also both for

So plan point this forward, that's of at get We in the time. Shar. going ahead process the want don't regulatory to

would guess No, Right. guide base I obviously, had question. But curious So 'XX was conditions, that the some the guess, and makes you be would when this like, anomalistic extend right? I sense. that just, you year out?

go Yes. your then we from Typically, for question? back Shar, do posted do, the Does the going plan original guidance we we and to that same to XXXX we grow what there. as answer we've and forward will that will

offset Got lastly, then then -- it. yes, it And sorry, does, you, thank go just Jerry. And just the ahead. -- $XXX Jerry, million

the of say 'XX original nature, to for onetime go that from and rates will going why we you guidance because there. and this that's was back is said, we our anomalous view as I growth happened reason what's and much as in the to build year,

do I of replenished? you anticipate that's you just some of then Got onetime is call And pretty full it. And be offsets, obviously I the the $XXX Or weather, guess the kind to there 'XX. out through -- amounts event. number. being impressive carryover savings normal as on lastly mean, million response a under

tough a intervenors. I line just need get to would you the mean, I case a deferred finish is guess, maintenance also with very I'm cuts over trying to about the potential they sense and some get there to as try the come read-through cost this may these have GRC, on that back?

you. Thank

So will what the you'll in. cost see is flow that much back of

Some will stick.

one you of severe about company. new in. has you much when through flow periods go back But I your to think learn of things always challenge, these

that becomes wasn't very that critical next continue maintenance postpone. year we can't year, to critical So this

see And made I we'll that flow think back reply of in final briefs. very much clear We've that in. our

next process help but to will normal -- to in plan variation return going for stick, certain And year. we of will that planning certain would of anticipate our and levels where forward. activity we some planning levels our storm weather Now of

So our point that time. at in goal is this

Your of David next Arcaro from comes question the Stanley. with Morgan line

you there. had continue prevented forward potentially into came arisen the on that challenges does line across discussions settlement that and learnings unique and cases into Or Just of the elaborate Any future? here getting are in there case? a the kind the you other have from future rate that play? may bit rate you that Could what in challenges factors finish

Certainly.

did handful So would parties and that plan you transitioned case resource discussions. so as there, that practice we are rate pursue interest . But case of But something settlements. you have rate a I are in in involved rate say integrated rate we future key to not the we representing very a represented not essentially in our That the XX settlement say at table, and Not contested to you practice customers, far want but in practice moving learnings was significantly to so in successful might contested table. Michigan we or the jurisdictions. this, very the to economic parties, think agencies that settlement parties, bulk settlement, a settlements was engage major quickly of of had the that of I know, have was discussions. the then were but and the pursue to rate we're is be economic when important unfortunate. ability that settlement. When be common common is would interest that other at there interveners what the parties, another towards the the Michigan, a explore

that context. points to the the IRM specific other here it Got led sticking Were intervenors? whether case, within undergrounding the it. aspects specific or helpful That's the requests there was those with

not. say would I

call, would a engage. said, would reluctance that that what moving handful We engage. parties a to productive was I did it say I think the simply towards, I were outcome.

the of there was reluctance a until, parties. I the engage are of say, So last the feeling where moments by some to would other we discussions positive

earnings the And power. Understood. go-forward thinking Okay. about

Vantage bit results, guidance original you give if the XXXX XXXX. be could wondering for you and saw new I a think for baselines about us also Or growth? those Do sense on the the in at kind as quite those Trading stronger the how or if Looking could midpoint, original was revert a to forward? strength than of much we nonrepeatable growth those X onetime businesses? going XXXX considered

that see Ruud. the project There -- this things in also some This too. RNG X new steel that businesses We we did projects, energy At Yes. growth did year, Dave as some opportunistic in for growth services custom this contracts expected. new year. is strong mentioned, Vantage, some is we there, had we onetime we those commenced

forward look on we So Vantage.

We will original be opportunity but some seeing great this and some growing that guidance, XXXX the year. off great growth still there

saw, we'll business. a that higher means on having year, what Trading these has too. also we've right looking and And be XXXX. favorability through also, update. full seen lot guidances, gas full you we'll been requirement you -- we've but a I'm not the now, And these services at of But is some like any of the increased and contracted increasing contracts. that guidance margins give for that we've there in as great A our seen of

Jerry earlier, give we'll that mentioned December. As update you in a full on

comes question next with Chopra Your Evercore Durgesh ISI. of the line from

I really you detail cost around impacts. appreciate the that provided mitigation all the

of which in Listen, to level this year, allowance rate year of Can so for think in roughly $XXX XX% earnings forward? right, costs I thank your so earnings your like is remind all in just what . are ongoing earnings go-forward storms for you of you million impact, the baked Can of case current us it's on or those year. profile. you add power us a -- this to aggressive going -- remind numbers storms kind through normalized you and year implications when this an pretty And this, that. wanted together,

there's In million we budget about there well. pretax than for -- that, Yes. our the as in right $XX been that's some in storms contingents rates, But differently now. building

that Okay. more could or that like legislative? be trackers Or Are opportunities there would deferrals pursue? you other

utility been the case. in is pursuing in I be our and have some trackers that a of their current sister pursued in and Like think Durgesh think matter pursued I as rate the well deferrals of those as future. past, can fact,

of that this is case? like And are asking request part your as you well, in for current

deal It as well case point this is storm as not typically, time. But variances with for and said, budget in Dave our in we that weather deviation one at activity standard as weather current variances rate variances.

year certainly. is is excessive this we with unusual cooler very which very was scenarios, and that summer normal lineup than storm a what think our had beyond much I anomalous unusual activity, and planning

we significant When XX% we about it, of earnings a we and of a XX% response totality in the challenges. response our light so and responded extraordinary challenged, think of pretty with had about

So we year. it view as very a anomalous

it. Got

on there? we And Consulting you Perfect. steps maybe Okay. line storm just quickly I then What when I time know next of The hit investigation. Liberty see there? was the recommendation final do And appreciate hired. sort a expect color. Group as could

with exchanges So been have there's providing. are very interactions The been we're positive requesting a set Liberty. of collaborative. which information They very

next expect steps they'll tabletop I summer, think we final of is series of as part and report. sometime next conduct field report the exercise, some a their work

question line next Tonet Jeremy with of the JPMorgan. from Your comes

XXXX impact it's if question the precise X%? case, about does number touched wanted point. on think different you think we rate of we and as be I has base business, but a There's here, at past I XXXX, base business about think forward. going the been as clear 'XX, ways, to on X% about still very to grow But think the some have just DTE very to unknown going a this

regulatory get Jeremy, will before, for those our from at anxious support there all to I want to is we're discussed the what construct front know again, beyond need details. and the we regulatory What is I to of those going are But supported we've get highest the all And certainly 'XX in that matter. the opportunities long-term today. that to company, of growth we support the of that finalize everybody have say level details. all process. is to don't strong

commission, customers and clamoring these something execute our these is the for move and This to you the signal, I our are want. strong a for And every I will waiting our customers, customers. What relief not that great that we're we'll rate investments. forward requesting extraordinary. governor, continue our is we're that tell mayor for legislators, investments to talk So is

that per the the the some at as interest figure If as of May year, below inflation since that of in well increase that roughly just look national XXXX, an in recover where rates over our the correction deploying, well time, time X.X% we'd you we're be below peers at sales of they've well seen X.X% that some since have period XXXX. and capital expense period since of we of X% since of to bill looking growth

commission, we we're make feel package we to would customers. investments delivering and So we we're need like support get say, I pursue the for very our compelling strong that competitive to for for confident a what and the

Got a pivoting it. bit it. Maybe here. little Understood. Got

kind if As number holdco just how hedges of provide a we kind get of specific on something for much holdco sense Is longer-term at the of And Is of moving that's rates to note a looks risk a some those short-term tracking hedge? levels? we're headwind trying the there's refinance up in has this place Just what risk. hedge? forward, risk regime a details refi far a that lot What type been just as this be? look could as could the change wondering in a was this of I mitigate of you refinancing in being in recently. hedges DTE to -- rates like?

Yes. Jeremy, Dave. is this

in plan highest it incorporated the in and these say at to I'll plans it interest this. flexibility contemplated level, had So considered and our the first and had our increasing rates prior

expense So continue of interest future debt. tenor structure and through the we're and monitoring manage to we'll and timing this, increase our

have to referring you're Now due 'XX. we end at come that will of the that debt parent the

well. in year, the as We for for hedges monitor opportunities, XX% put opportunity we'll continue quarter, look have through and to for additional of for market the a over that that

hedged that clarify So X, the just be XX% XX for X, of XX% would it years, that length -- tenor be, of to time? is that refinance be whatever new would

Right.

deviation a helpful guess, Got years? if could you year? think budget against, the to I But is thoughts future you you set just that's wondering it. revisit sample And guess? this storm happen forward then great. to Just the think in of that given the impacts maybe as best about, and X weather, of about, apply I Or provided you anything been think planning that year? about and severity for there, How reason just how lot in standard to the

Typically, what weather we and a build our XX-year of is do we off look plan at we that. patterns,

consumption. in Our XX-year And also build rates on in deviation then a X built we a are standard X- average, if X-year to weather a in you off typically That's will. for And budget. we storm based addition to that, average. carry

speak, -- some as the we as we're years. more weather that we've revisiting we'll severe So experienced of in patterns of last handful

to of averages. types track continue against that will those So

we've successful to the And years by and how in in in the even we our using years. that quite that's delivering X portfolio, last been build approach. X So XX last

just to storm we it, temperatures about change. And DDDs to activity, And and continue forward that we'll that's then HDDs. as so we and with averages at weather. roll our XX-year look we'll also continue talking see continue modifying there, approach as I'm And that patterns it for continues And build. we'll

As it has, we'll continue increase contingencies to that. for

very for seeing EEI. thoughts all looking it. team today to at helpful. the Got your Thank forward and That's you

of comes Bank question next America. line of from Julien the Your with Dumoulin-Smith

slip there's baseline rolling in about sustainability How a of them? call think leave you as But forward, question think about sustainability come kind do that also in the there? will? items. basis think got And a pulled But if up a [indiscernible] 'XX about could the on back headwinds. about as in How 'XX? here of here it, open that are you onetime setting I'll do again, going ended. some about in back, you've forward how that get of you saving, these just you in items much was some it think these how here, what items Just asking of I of against you you offsets in that do 'XX? about Jeremy the pull-forward

question, Yes. Julien. No, great

make So some that be clear incremental to I XXXX. of costs want just $X.XX not but we're portion sustainable, snowploughing will it into

levels We maintenance. normal to will return our of

in As years where many you we pulled know, the we our favorability maintenance plan, and had over banked forward it.

able maintenance. we take were onetime pauses noncritical these preventative So to in

next And our to we're normal going pattern. so but to return -- year,

to want cost I kind of into helps any return of don't to snowploughing XXXX. expenditures. Hopefully, Julien. levels that So people think we're that maintenance We'll normal

if Right. to run year outsized 'XX, a in 'XX it's sure... to back i.e., you in an rate not will, get make to just

normal had to rate back level of we maintenance in return and going 'XX would otherwise expenditures. 'XX our that and normal run We're correct. That's to have

the it. same but in with residential weather And an outsized office is I how Got weather to environment and mean think Excellent. for of be that of things, like obviously, direction year-to-date mean precise. impact, about 'XX norm outsized X.X% years here. sales -- hard do I seems weather that to you you impacting it's impacts, guys onwards resi? on whatever return with this Jerry,

Sure.

talk this forecast for to with what we've I'll part, plan So year and and year forecasted next for seen let we Dave what year. weather load we this residential I'll start and to compared the about had what

that only not, Midwest or weather. it was analysis believe Michigan, state perspective, weather when experienced the we the cooler-than-normal a from the do So in

And by than standard than one And for normal also in experienced than and the winter. -- cooler sure. X normal warmer weather weather than more we then more deviation

storms. the then a of activity, a And packaged storm unusual number some combination and year. it's that essentially of with unicorn catastrophic very So twice

a -- that my it's and statisticians roll through analysis, X had in And I probability. XX-year we had

average, going that with to XX-year on work we'll It comment and want Dave, But course, XX-year residential sales? you of storm average our will activity build into impact and plans X-year our the averages. we'll forward. our So

Sure. Yes.

sales expected with consistent the budget, had. pretty in this consistent for rate year, have filing our year with we much come Our as the case

As said, down little, you knew would returning work. a be is to residential we people as

we down. come So saw that

our either. we in residential our far going flat. somewhat And in the here rate as dispute remain As we no forecast, forecast been sales there's -- case, forecast forward

-- get case. here So this rate we coming in should issue that an shouldn't be up that

Fair Okay. All enough. right.

plan think 'XX on as Just on is see transient building and so do pressure of And -- resi? more the 'XX about but Or it you into piece? going consistent out 'XX? you

pressure see residential in the 'XX. from won't We forecast

Crowdell is question line of Mizuho. next from Your Anthony the with

balance a and question a follow-up. Just quick sheet

just what and FFO impact update several years. think an think that I end the lowest rate been debt 'XX? how does thinking guess, activity, out year's you of threshold they've of in and And the company's to where probably with earlier guess, in this are storm decision, Moody's I year downgrade you to the metric put weather rate end I mild do is relative 'XX? you the the in this maybe up

position year remain we meet balance sheet. rating our call. and agencies in this with with all this the did even We Anthony, of a ahead

Now the this cost, our really from 'XX that's FFO recovered to and fuel getting FFO was due debt lower to from year.

recover at So back, in come see 'XX as our to we'll that we company. our debt PSCR FFO primarily electric

we headroom to our at in position, So this of remain thresholds point. good downgrade the any agencies good to any -- thresholds rating at

that mild seems the in only a activity there's decision. know I or getting more all you as in an Michigan. Jerry, the -- or a Michigan the It I was we're catastrophic if there's longer-term think when X, weather. question. then a weather year said, form just every And could you think rate much volatility, had a of Midwest case pending But for seems It ice there's storm state waiting we're Great. of in something. storm and volatility that

operating that I on or mean you higher? in in change file Michigan, rate can risk cases, in ROE maybe challenges when thoughts the return or goes what operating your you you maybe the involved up the need future the utility risk the think you

things, think I Anthony. X

ROEs, of that go especially certainly get future a be challenging a rate rising and in construct -- possibility, worse continues rising rates. this of a interest -- which levels it in is it's the but at. could lifting There light You or up continued terms pressure at it's more ROEs to interest route move that in route, the to if remains will

practices trackers in viable going Michigan deployment, investment we very and our research history, when of activity could level periods can order I if storm there have But in that not forward. path that And make been entered to me, be existed feel past. maintenance to in that that the a capital very you whipsaw our the have past, the we of in in also storm volatile

Your next Andrew question comes line from Scotiabank. of the Weisel with

the of on answered. Obviously, been been headwinds. the a I year. efforts it's and mitigation the Most tough mine appreciate all details have

follow-ups, please. Just X

assume First rate going the soon of should timing, to how words, rate around other less In we we of let's want normal or you get pace the or the more all, expect trying annual the just cases? to should to case next not set expectations forward? we filing whatever a outcome, but current or reasonable ahead get constructive outcome, use, assume adjective

into say cases rate annual distribution request. a enough rate would I in we primarily our keep which that recovery we us the will builds by rate built infrastructure mechanism that periods for commission, we it have until hope an the If infrastructure time. mechanism cases recovery for to longer Andrew, into be, will that's large current of of out be capital adopted case

look between X and Like what's on adopt frequency stay it large years years track cases the rate amount while. built out the but able of if transpiring infrastructure reduce company, if happen us you inside commission couple of into a at it our company, depending a out enough until to for will enough take It we're the gas chooses mechanism. X to mechanism to to will a keep just capital that an recovery to for gas

said you what past. with the consistent in sounds That

chains. about Question totally is question supply unrelated. Second

these spending might do You're of is of level on both do see And on the capital that if switch you planned slow shortages, How pace risk a a improving grid gears? equipment you transformers and there of see down spending? like availability reliability. renewables or your lot

relation of supply working transformers are well far. our switch and we've well U.S. Well, certainly, quite and reach so chain sources, and borders aware is out international very which that challenges gear, we're expanded from beyond with to bringing equipment in

investigation our chain. of We've lot taken supply a of done several over off and diligence that's some years, testing pressure and and of due last a the lot

of we now, business. business we're to capital right So the both feel as terms good how about large positioned renewables execute programs, the it, Andrew, well our distribution on as in

Wolfe comes Research. Your with the Steve of from next question Fleishman line

Great.

just you've guidance in give able rate been in pending. case had -- past, like the cases to and cases so So with rate rate

of we in what happened about the about last what's this or So we think versus in should the tough being just year sales with year? this conditions surprise the this just forecast think because different past? different Just should time how

from realistically, grid on all I case And I investment based statements, probably into positive. levels consensus filing in last year. gotten our their the are there's has more mean of to little rate into and And and for also conservative the commissioners clamoring invest that for support getting make renewables. We're support governor's to energy from there's investments for and as strong summer especially clean and infrastructure. this -- you've seen, probably strong grid us office signals strong what would prior a say with public Steve, large again, better where the transition. support the happened posture in the also even customers, supporting wanting

this in we're of process conservative well regulatory as had year. we've the the in on the some based more a posture likely as we've So that challenges challenges experienced

we it. we're So we're something, on make sure going going deliver to to want do you tell to we

of Okay. related case? if and much, how just is rate other just than to -- to more just wanting terms time? the things anything In And it's take

need time. about to of don't that plan. our commission. it's long-term else worried really more a for And to ahead we plan. our just 'XX There's need a don't other nothing point data significant get We want in data here we -- our point finalize than plans No, our and we're

comes next KeyBanc. the line Karp of Your question from Sophie with

potentially you may. activity, we've volatility now of questions, Michigan, -- With storm, something it like of a structural maybe should and program is for Maybe mind you, it if customer the seen once a type done beyond and right, in storm there need what XX-year on like a guess, that legislature. seems your storms, in south for an of the to annual or couple and this is every in that? be the it And I those Is So a predictions. storm and I weather surcharge respect trackers right? implement bills now riders but increases, goes A have where to Michigan? escrow. see different year, in more, to learn in solution from some securitization that like in have are been All event. employed sort mechanisms there That maybe to something the storms

Sophie, that think simple I that the answer, and is yes. straight answer to to absolutely

volatile that great to how the this thinking as are of to potentially what you and approaches offered similar plan to capital it these environments, of have mentioned, the maintenance to environments as utility into certainly, even you've starts as thoughts and your We consider because it you've all and above, when plans. does those deployment get your whipsaw we're out volatility plans storm to about take

steady And order We that happen. and run need grid the We in want don't high-quality a to regular and want we the a maintenance. to operation. high-quality perform make have investments to to

very be good them pursuing and thoughts, your We're of thoughts. very future. the in So we'll supportive

speaking, the in some in by outcome And hypothetically like to guess, way Got is And signal to were that when a rate in stakeholders, as given I case that this jurisdictions other were current question situation? thoughts that peers if some for is the but such of is, communicate I more other your the just they nonconsequential happy would charged politically my -- it. rate you proceed the And not cutting that. was to as chose what you if EV that with situations entirely you such maybe curious infrastructure some things investment, to of in and how you've right?

that. faced And this the scenario company certainly, -- any with we're I'll say uncertainty in do uncertainty, midst planning. good of type of any Sophie, So we much,

think the well advanced we'll order, we once and thinking. I And roll in we're our receive out our rate our reaction. plans

from commission we'll point this all ourselves the time, and which that our at very long-term our be want and ability sense await guidance a provide believe in disruption be to at I don't ahead will in then positive. point, of this there would at get order this I point plan, invest. don't I to the we'll and

prudent, of we to to alignment. can to be make investment then were to there's confident need lot respond whatever about we again, scenario But happens. doing feel also and order a planning I in that if the ensure the

from comes Morningstar. line question the Travis next Your with Miller of

my of most answered here. questions You've

just So ones. X quick real

long-term coming and terms terms after in what the the the guidance capital In about Will -- rate growth, announcement. investment, and also case the dividend dividend announcements, that come of the of planning? quarterly

come that out. Yes, I when depending it when Yes. think before bit case -- comes even that -- come may on rate that will then a final little

Okay.

the but rate after definitely So potentially... case,

Yes.

So of December, in yes. be it'll the Xst

mentioned that weren't you Perfect. then that they were in previous that Have know with rate interveners been before? and process? before been the really these settling all they in Okay. familiar case Did the interested you rate settling. people And cases? Have on keen they

the I we know many know them -- them. rate we with course, other would that cases. them been say We've -- in of involved

not significantly bringing we parties to all to settlement, ones the I that of the their the customers. interest that majority our strong -- the to but mission table, interest typically engage most the their economic these is not As try Probably don't all, typically the parties the say had economics would I the discussions. challenged settlement are to in to we we exclusively have not had would case function, not in bring parties of all, of that tied say were able

Your next Ryan Levine from question comes the of line with Citi.

of max were that cost in should additional the were as from Or cost there decided the a tools QX flex third company? for think to On not quarter? we cutting, use the

the across looking opportunities for year. end company We place look we been any of we that put the we've the beginning of we in all year And Yes. -- had our that through ever since had. we last saw

had. You we saw that $XXX of offsets million the

now may the end to So we've of mean annualized I end for through play cuts. these number are of cost plays consistent we've -- numbers going out be still the out year, the a with been the but of this year. it's through lot what a

apply million storms, any comparable appropriate? the your your been that's how on are the term too? increase analysis directionally about know $XX storms you rate growth through that thinking utility, then impact? that in that talking to longer applies I But XXXX. is jurisdiction? appropriate Or And think Is longer-term outlook, asked in was and And to number studies Okay. the of XX% you about there Or of is neighbor terms answered. some kind

Yes, the at that and has. weather that. storm at increasing to seen increasing look impact We've we patterns look also continue the

manage the so we forward are what storm we in rates. we've as as And as build budget at again, But going contingency going some what's mechanisms we're other can to the we well in do use need talked about, going forward. beyond to of look some what

Your next question comes from with Gregg the of Orrill line UBS.

expecting the get can PSCR, back mentioned you're this you cash some You in year quantify to that?

Yes.

Our under $XXX recovery last million. year was about

so been year. throughout that the recovering And we've

to going this the of through that So get we're in -- majority back year.

we'll So million it's a $XXX over to be little getting back this year.

that's year-over-year. So bit FFO $XXX obviously swings a by cash quite and us million for the

back for for This today. the closing over turn Jerry I remarks. call concludes Norcia to Q&A our

have today. path including I'll joining and demand our I'm our close for you, electrification us increased and Well, grid for everyone, generation. about electric just by us, of further accelerating on strengthening preparing our to ahead thank we opportunities system the of for excited cleaner saying

our case Hope up. and after a morning has We details future for and a we'll wraps day. continue everyone rate growth, well be great to provide additional positioned safe

This concludes today's conference call.

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