Earnings Call: Q3 2020

Nov 5, 2020

Greetings, and welcome to the Amarin Corporation's Third Quarter 2020 Earnings Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andrew Kirk, Director of Investor Relations for Ameren Corporation. Thank you. Mr. Kirk, you may begin. Thank you, and good morning. On the call with me today are Warner Baxter, our Chairman, President and Chief Executive Officer and Michael Main, our Executive Vice President and Chief Financial Officer as well as other members of the Ameren management team joining remotely. Warner and Michael will discuss our earnings results and guidance as well as provide a business update. Then we will open the call for questions. Before we begin, let me cover a few administrative details. This call contains time sensitive data that's accurate only as of the date of today's live broadcast, and redistribution of this broadcast is prohibited. To assist with our call this morning, we have posted a presentation on the amortoninvestors.com homepage that will be referenced by our speakers. As noted on Page 2 of the presentation, comments made during this conference call may contain statements that are commonly referred to as forward looking statements. Such statements include those about future expectations, beliefs, plans, strategies, objectives, events, conditions and financial performance. We caution you that various factors could cause actual results to differ materially from those anticipated. For additional information concerning these factors, please read the forward looking statements section in the news release we issued yesterday and the forward looking statements and risk factors sections in our filings with the SEC. Lastly, all per share earnings amounts discussed during today's presentation, including earnings guidance, are presented on a diluted basis unless otherwise noted. That here is Warner. Thanks, Andrew. Good morning, everyone, and thank you for joining us. Before I jump into our discussion of Q3 results and other key business matters, I will start with a few comments on COVID-nineteen. To a Yin, I hope you, your families and colleagues are safe and healthy during this challenging time. While COVID-nineteen has driven a great deal of change, I can assure you that one thing that remains constant in Amarin is our strong commitment to the safety of our coworkers, customers and communities. So too is our strong focus on delivering safe, reliable, cleaner and affordable electric and natural gas service during this unprecedented time. We recognize that millions of customers in Missouri and Illinois are depending on us. I can't express enough appreciation to my coworkers who have shown great agility, innovation, determination and a keen focus on safety, while delivering on our mission to power the quality of life. We continue to carefully monitor the impact of COVID-nineteen on our electric sales, liquidity and supply chain. To date, these impacts have been manageable and are largely in line with our expectations. In addition, our team continues to successfully execute our strategy across the entire business. Looking ahead, we will remain focused on executing our strategy, including employing our strong safety practices as well as continuing to exercise financial discipline to mitigate the impacts of COVID-nineteen. At the same time, we will look to capitalize on key opportunities that we have identified during the last several months, including benefits we are realizing from our digital investments and other efficiencies in our operations. Turning now to Page 4 for an update on 3rd quarter results and 2020 earnings guidance. Yesterday, we announced Q3 2020 earnings of $1.47 per share compared to $1.47 per share earned in 2019. A summary of the key drivers is provided on this page, which Mike will discuss in more detail in a moment. I am pleased to report that we remain on track to deliver solid earnings growth in 2020 over 2019. Yesterday, we also announced that we narrowed our 2020 earnings guidance range to $3.40 per share to $3.55 per share. That compares to our initial guidance range of $3.40 per share to $3.60 per share. Moving to Page 5, here we reiterate our strategic plan, which we've been executing very well throughout the year. We expect our plan will continue delivering significant value for our customers and strong long term earnings growth for our shareholders. The first pillar of our strategy stresses investing in and operating our utilities in a manner consistent with existing regulatory frameworks. This has driven our multi year focus on investing in energy infrastructure for the long term benefit of customers in all four of our jurisdictions. As I've said many times in the past, our customers are at the center of our strategy. Our customers have been clear, they want safe, reliable and cleaner energy, all at an affordable price. Our goal is to meet our customers' energy needs and exceed their expectations. As you can see on the right side of this page, during the 1st 9 months of this year, we invested significant capital in each of our business segments to achieve our goal for our customers and we are delivering results. Our energy grid is becoming more reliable, resilient and secure. We are implementing and enabling cleaner energy through our renewable energy and transmission investments. And our customers' electric rates remain among the lowest in the country at approximately 20% below the national average. Of course, we're not done. We will continue to make critical investments across our businesses to modernize the energy grid. In addition, we will continue to transition our generation portfolio to a cleaner and more diverse portfolio in a responsible fashion. That transition will include significant investments in renewable energy, which I will cover in more detail in a moment. And we will continue to invest in innovative technologies, including digital technologies to meet and exceed our customers' rising expectations. Consistent with the Ameren Missouri Smart Energy Plan, we are putting meaningful dollars to work to modernize the energy grid and to serve our customers better. I am pleased to report that in July Ameren Missouri began installing the first of 1,200,000 electric smart meters for customers. Installation of these smart meters over the next several years will enhance reliability provide more visibility and choices for our customers to control their energy usage. Our Ameren Illinois electric and gas distribution customers already seen these benefits as we completed the installation of over 1,200,000 electric smart meters and over 830,000 gas modules in 2019. We have also been working hard in the regulatory arena to earn fair returns on our investments. As we discussed in our first and second quarter earnings calls, new electric rates went into effect on April 1 this year as a result of a constructive settlement in Ameren Missouri's electric rate review. In addition, as Michael will cover in more detail later, we will continue to progress through our electric and natural gas regulatory proceedings in Illinois. We expect a final decision in the electric proceeding by December of this year and a final decision in the gas proceeding by January of next year. From an operational perspective, the Callaway Energy Center began its scheduled refueling and maintenance outage in early October. The outage is progressing safely and on schedule. Finally, another important element of the first pillar of our strategy has been and remains a relentless focus on continuous improvement and disciplined cost management to keep rates affordable. Moving to Page 6 and the 2nd pillar of our strategy, which includes enhancing regulatory frameworks for the benefit of all stakeholders. In Illinois, we continue to support the proposed Downstate Clean Energy Affordability Act. This important legislation would allow Ameren Illinois to make significant investments in solar energy and battery storage to improve reliability as well as to make investments transportation electrification in order to benefit customers in the economy across Central and Southern Illinois. In addition, it would help address energy policy challenges facing the state, including the need for additional renewable sources and better electric vehicle charging infrastructure. This bill will help address these challenges and move the state of Illinois closer to reaching its goal of 100% clean energy by 2,050. This legislation also continues to support important investments in the energy grid to meet our customers' expectations for more reliable and resilient energy grid. In addition, this legislation would modify the allowed return on equity formula and will also extend the electric performance based rate making framework through 2,032. We have been actively participating in energy policy discussions, including the governors and Senate working group meetings. As noted on this slide, a veto session is currently scheduled for certain days in November December. Consistent with the views that we expressed during our Q2 call, we do not expect comprehensive energy legislation to be addressed during the VDO session in 2020. Looking ahead, we will continue to engage with key stakeholders in an open and transparent fashion to better understand their views and advocate for constructive energy policies that support investment in critical infrastructure. Moving to Ameren Missouri regulatory matters. On October 16, we filed requests with the Missouri Public Service Commission to track and defer in a regulatory asset certain COVID-nineteen related costs incurred, net of any COVID-nineteen realized cost savings. Through September 30, 2020, we have accumulated approximately $9,000,000 of net costs, and we've requested additional true ups next year. If our requests are approved by the Missouri PSC, the recovery and timing of recovery of these costs will be determined as part of the next electric and gas rate reviews. The PSC is under no deadline to issue orders and we cannot predict the ultimate outcome of this matter. Speaking of future rate reviews and as we discussed during our Q2 conference call, we continue to expect to file the Ameren Missouri electric rate review in the first half of twenty twenty one. In addition, we also expect to file an Ameren Missouri natural gas rate review during the first half of of 2021 as well. Turning now to Page 7 and Missouri's Integrated Resource Plan. In late September, we announced a transformative preferred plan that will accelerate our transition to a cleaner and more diverse generation portfolio while carefully balancing 2 important needs for our customers, reliability and affordability. Our plan is clearly transformational as it significantly accelerates our carbon emission reduction goals from those that we established in 2017. In particular, the plan targets a 50% reduction in carbon emissions below 2,005 levels by 2,030 and an 85% reduction by 2,040. And by 2,050, our goal is to achieve net zero carbon emissions across all of Ameren. We plan to achieve these goals by making significant investments in renewable generation. Under our preferred plan, we would add 3,100 megawatts of wind and solar to our portfolio, representing approximately $4,500,000,000 of investment by 2,030. By 2,040, in total, 5,400 megawatts of wind and solar would be added for a total investment of approximately $8,000,000,000 These renewable generation additions include our wind generation investment of $1,200,000,000 for 700 megawatts that we expect will be substantially complete this year. The plan also advances the retirement of 2 of our coal fired energy centers, with all of our coal fired energy centers retired by 2,040 2. It is important to note that our plan does not include the addition of any combined cycle natural gas plants. Further, we expect to seek an extension of the operating license of our Carbon Pre Callaway Nuclear Energy Center beyond the current expiration date of 2,044. And we will continue to implement robust energy efficiency and demand response programs. Importantly, our plan represents a responsible transition of our portfolio that takes into consideration environmental stewardship, system reliability and customer affordability. Our plan leverages the very low cost generation that our customers enjoy today and use it as a bridge to enable us to add greater levels of intermittent resources in the future while ensuring system reliability. Our plan also intends to leverage important research and development investments by the public and private sectors and incorporate advances in clean energy technologies over time to achieve our net zero carbon emissions goal. We are very excited about this transformational plan and are already taking steps to implement it. In September, we issued a request for proposal that will enable us to assess and take the appropriate next steps on solar and wind projects that will deliver the best value to our customers consistent with our IRP. Responses to our request have been robust, and we are in the process of assessing those proposals as we speak. We will provide an update on our assessment as well as our 5 year capital plan for 2021 to 2025 during our year end conference call in February. Consistent with our approach in the past, we will consider a variety of factors before we include such major projects into our plan. Having said that, one thing is clear. Our IRP includes significant incremental investment opportunities, including approximately $3,000,000,000 by 2,030. As I said before, we are very excited about our transformational plan as well as how Ameren and our industry are leading the country and the world in executing responsible and achievable plans to significantly reduce carbon emissions and in so doing creating a cleaner and sustainable energy future. Speaking of creating a cleaner and sustainable energy future, let's move now on to Page 8 for an update on our $1,200,000,000 wind generation investment plan to achieve compliance with Missouri's renewable energy standard through the acquisition of 700 megawatts of new wind generation at 2 sites in Missouri. Good progress continues to be made at both facilities. All of the construction and related installation of key components for the 400 Megawatt facility have been completed and testing of the units will be completed over the next several weeks. As a result, we expect the 400 Megawatt facility to be in service by the end of 2020. For the 300 Megawatt facility, we are working closely with the developer to monitor the shipment and installation of remaining facility components. As we discussed on prior earnings calls this year, we have experienced some delays in the project due to several factors, including those related to challenges in the global supply chain due to COVID-nineteen as well as in the transportation of certain components. As a result, we expect a portion of the project or approximately $200,000,000 of investment to be placed in service in the Q1 of 2021. We do not expect this to have a significant economic consequences or reduce the production tax credits for this project because of the recent rule changes made by the U. S. Department of the Treasury to extend the in service criteria by 1 year to December 31, 2021. Moving to Page 9. Looking ahead to the end of this decade, we have a robust pipeline of investment opportunities of over $39,000,000,000 that will deliver significant value to all of our stakeholders by making our energy grid stronger, smarter and cleaner. This robust pipeline now includes the new renewable generation proposed and the preferred plan for the Missouri Integrated Resource Plan, which added approximately $3,000,000,000 of incremental investment opportunities from 2020 to 2029. Importantly, these investment opportunities exclude any new reasonably beneficial transmission projects that would increase the reliability and resiliency of the energy grid as well as enable additional renewable generation projects. Of course, our investment opportunities will not only create a stronger and cleaner energy grid to meet our customers' needs and exceed their expectations, but they will also create thousands of jobs for local economies. Maintaining constructive energy policies to support robust investment in energy infrastructure will be critical to meeting our country's future energy needs and delivering on our customers' expectations. Moving to Page 10. A few moments ago, I mentioned that we are focused on delivering a sustainable energy future for our customers, communities and our country. Consistent with that focus, we recently published a stakeholder presentation called Leading the Way to a Sustainable Energy Future, which is Ameren's vision statement. This presentation demonstrates how we have been effectively integrating our focus on environmental, social, governance and sustainability matters into our corporate strategy. This slide summarizes our sustainability value proposition for environmental, social and governance matters. We have a strong environmental focus, which is in part demonstrated by the Missouri Integrated Resource Plan I discussed earlier. Importantly, the preferred plan discussed earlier is consistent with the objectives of the Paris Agreement and limiting global temperature rise to 1.5 degree Celsius. Emissions from our coal fired energy centers are well below state and federal limits and our natural gas pipeline system has no cast or wrought iron pipes. We also have a strong long term commitment to our customers and communities to be socially responsible and economically impactful. There has never been a more important time than now to be a leader in this area. In terms of COVID-nineteen relief, we've been tirelessly working to help our customers in need, including implementing disconnection moratoriums, providing special bill payment plans and providing over $15,000,000 of critical funds for energy assistance and other basic needs. And we have stood up and spoken out against racial injustice and discrimination and have taken actions to enable our company and community to further embrace diversity, equity and inclusion. And we were honored to again be recognized by DiversityInc as one of the top utilities in the country for diversity, equity and inclusion. Finally, our strong corporate governance is led by a diverse Board of Directors focused on strong oversight that's aligned with ESG matters. Our executive compensation practices include performance metrics that are tied to sustainable long term performance and progress towards a cleaner, sustainable energy future. I encourage you to take some time to read more about our sustainability value proposition. You can find this presentation at amereninvestors dotcom. Moving to Page 11, to sum up our value proposition, the consistent execution of our strategy over many years and on many fronts has positioned us well for future success. We remain firmly convinced that the execution of this strategy in 2020 and beyond will deliver superior value to our customers, shareholders and the environment. In May, we affirmed our 5 year growth plan, which included our expectation of 6% to 8% compound annual earnings per share growth for the 2020 through 2024 period. This earnings growth is primarily driven by our approximate 9% compound annual rate base growth from 2019 through 2024 and compares very favorably with our regulated utility peers. I am confident in our ability to execute our investment plans and strategies across all four of our business segments as we have an experienced and dedicated team to get it done. In addition, we will continue to advocate for constructive regulatory frameworks and energy policies to support these important investments for the future. Further, our shares continue to offer investors a solid dividend. Last month, Ameren's Board of Directors expressed its confidence in our long term growth plan by increasing the dividend by 4%, 7th consecutive year with a dividend increase. Given the midpoint of our 2020 earnings guidance range that I discussed earlier, our dividend payout ratio is approximately 59%, which stores the lower end of our company's targeted dividend payout ratio range at 55% to 70%. This factor combined with our strong earnings growth expectations, business well for future dividend growth. Of course, future dividend decisions will be driven by earnings growth in addition to cash flows and other business conditions. Together, we believe our strong earnings growth outlook combined with our solid dividend results in an attractive total return opportunity for shareholders. Again, thank you all for joining us today. I'll now turn the call over to Michael. Thanks, Warner, and good morning, everyone. Turning now to Page 13 of our presentation. Yesterday, we reported Q3 2020 earnings of $1.47 per share compared to earnings of $1.47 per share for the year ago quarter. The key factors by segment that drove the year over year results are highlighted on this page. Ameren Transmission and Ameren Illinois Natural Gas earnings were up 0 point 0 $3 $0.02 per share, respectively, reflecting increased infrastructure investments. Ameren Illinois Electric Distribution earnings increased 0 point 0 $1 per share, reflecting increased infrastructure and energy efficiency investments, partially offset by a lower expected allowed return equity under performance based rate making. Ameren Missouri, our largest segment, reported earnings that declined $0.02 per share compared to the prior year. The comparison was primarily driven by lower electric sales of $0.08 per share due to both milder than normal temperatures in the Q3 compared to warmer than normal temperatures in the previous year as well as lower weather normalized sales primarily due to the impacts of COVID-nineteen. Amazurie's earnings also reflected lower EMEA performance incentives of $0.03 per share compared to the year ago period. These unfavorable factors were partially offset by new electric service rates effective April 1, which increased earnings by $0.08 per share compared to the year ago period as well as lower operations and maintenance expenses reflecting disciplined cost management, which increased earnings by $0.04 per share. And finally, Ameren Parent and other results decreased $0.04 per share, primarily due to the timing of income tax expense, which is not expected to impact full year earnings and increased interest expense resulting from higher long term debt outstanding. Moving now to Page 14 of our presentation. I'd like to briefly touch on key drivers impacting our 2020 earnings guidance. As Werner stated, we narrowed our 2020 earnings guidance to a range of $3.40 to $3.55 per share from $3.40 to $3.60 per share. This guidance range assumes normal weather in the remaining 3 months of the year as well as reflect sales updates since our Q2 earnings call in August, primarily related to COVID-nineteen. For the year, we expect total weather normalized sales in Ameren Missouri to be down approximately 2%. Broken down by customer class, we now expect 2020 commercial sales to decline approximately 6.5%, industrial sales to decline approximately 3% and residential sales to increase approximately 3.5%. Overall, our update today is largely consistent with our expectations outlined in our call in May in terms of both total sales and EPS impacts for 2020 due to COVID-nineteen. Before moving on, let me briefly cover electric sales trends from Ameren Illinois Electric Distribution for the 1st 9 months of this year compared to the 1st 9 months of last year. Weather normalized kilowatt hour sales to Illinois residential customers increased a little over 2.5%, and weather normalized kilowatt hour sales to Illinois commercial and industrial customers decreased 6.5% and nearly 8%, respectively. Recall that changes in electric sales in Illinois, no matter the cause, do not affect our earnings since we have full revenue decoupling. Moving on to other guidance considerations. Select earnings considerations for the balance of the year are listed on this page. As Warner mentioned earlier, we remain very focused on maintaining disciplined cost management for the remainder of the year. Our focus in this area has enabled us to effectively address the headwinds we have faced from COVID-nineteen to date. Moving now to Page 15 for an update on Ameren Illinois regulatory matters. In April, we made our required annual electric distribution rate update filing. Under Illinois Performance Based Rate Making, we are required to file annual rate updates to systematically adjust cash flows over time for changes in cost of service and to true up any prior period over and under recovery of such cost. In late September, the ICC staff recommended a $49,000,000 base rate decrease compared to our rate compared to our request of a $45,000,000 base rate decrease. A decision is expected by December, with new rates expected to be effective in January 2021. Earlier this year, we also filed with the ICC for an annual increase in Ameren Illinois natural gas distribution rates using a 2021 future test year and have since updated our request to in September, our survey about the testimony. We're requesting a rate increase of $97,000,000 while the ICC staff was recommending an increase of $69,000,000 A decision is expected by January 2021, with new rates expected to be effective in February 2021. Turning now to Page 16 for an update on financing activities. I'd like to highlight an important milestone recently reached for our wind generation investments. On October 9, Interim Missouri issued $550,000,000 of 2.625 percent green first mortgage bonds due in 2,501. This issuance marked the 1st green bond offering for the company as the lowest coupon that Ameren Missouri or any Ameren issuer has secured on 30 year debt. At the time of issuance, it was also the 5th lowest 30 year coupon ever in the power and utility industry. Proceeds from the issuance will be used to fund a portion of the 700 megawatts of wind generation investment. We also expect to settle a portion of the equity forward sale agreement before the end of this year with proceeds also used to fund a portion of the wind generation investment. We expect to settle the remainder of the equity forward sale agreement when the 300 Megawatt wind project is completed in the Q1 of 2021. Finally, on October 15, Ameren Corporation redeemed $350,000,000 of 2.7 percent senior unsecured debt at par that was mature on November 15. A portion of the proceeds from the $800,000,000 issuance by Ameren Corporation in early April was used to fund the repayment. Before moving on, I'd also like to mention that we expect Hammond, Illinois to issue long term debt this year to repay short term debt. Moving now to Page 17. We plan to provide 2021 earnings guidance when we release Q4 results in February next year. Using our 2020 year to date results and guidance as a reference point, we have listed on this page select items to consider as you think about the earnings outlook for next year. Beginning with Missouri, as previously noted, the 700 megawatts of wind generation are expected to be substantially in service by the end of 2020, with a portion of the 300 Megawatt facility expected to be in service in the Q1 of 2021. As a result, we expect to see contributions to earnings from these investments beginning in 2021. The 2021 earnings comparison is also expected to be favorably impacted in the Q1 next year by the increased Missouri electric service rates that took effect April 1, 2020. We also expect higher weather normalized electric sales in 2021 compared to 2020, reflecting the continual improvement in economic activity since the COVID-nineteen lockdowns in the Q2 of this year. Further, we expect to return to normal weather in 2021 will increase Air Missouri earnings by approximately $0.04 compared to 2020 results through the Q3, assuming normal weather in the last quarter of this year. As a result of the Missouri PSC approval of our requested change in the way we account for Callaway's scheduled refueling and maintenance expenses, we expect the amortization expenses associated with the fall 2020 outage to be approximately $0.07 per share higher in 2021 than the amortization expense expected to be realized in 2020. The fall 2020 outage is expected to cost approximately $0.11 per share and will be amortized over approximately 18 months starting in December of this year. Moving on, earnings from our FERC regulated electric transmission activities are expected to benefit from additional investments in Ameren Illinois and ATXI projects made under forward looking formula rate making. For Ameren Illinois Electric Distribution, earnings are expected to benefit in 2021 compared to 2020 from additional infrastructure investments made under the Illinois performance based rate making. The allowed ROE under the formulity of the average of the 2021 30 year treasury yield plus 5.8%, which applied to the year end rate base. For Ameren Illinois Natural Gas, earnings are expected to benefit from higher delivery service rates based on our 2021 future test year and from infrastructure investments qualifying for rider treatment. Finally, the issuance of common shares under the forward sale agreement to fund a portion of our wind generation investments and under our dividend reinvestment and employee benefit plans as well as additional equity of approximately $150,000,000 in 2021 are expected to unfavorably impact earnings per share. Of course, in 2021, we will seek to manage all of our businesses to earn as close to our allowed returns as possible while being mindful of operating and other business needs. Finally, turning to Page 18, I will summarize. We have a strong team and are well positioned to continue executing our plan. We continue to expect to deliver solid earnings growth in 2020 as we successfully execute our strategy and navigate the impacts of COVID-nineteen. As we look to the longer term, we continue to expect strong earnings per share growth, driven by robust rate base growth and disciplined cost management. Further, we believe the growth compares very favorably with the growth of our utility peers, and Amerenshares continue to offer investors a solid dividend. In total, we have attractive total shareholder return story that compares very favorably to our peers. This concludes my prepared remarks. With Annette, now we'll invite your questions. Our first question comes from the line of Jeremy Tonet with JPMorgan. Please proceed with your question. Hi. Good morning, Jeremy. Good morning. Good morning. How are you doing? Great. Thank you. Terrific. Just want to dig in on 2021 a little bit more, if I could. And would you be able to provide any additional color on the sales outlook across different sectors, residential, commercial, industrial in your 20 21 earnings considerations? And what local trends are you seeing? And how do you expect these trends to change over 2021 with COVID recovery? And then lastly, are there any additional considerations for your gas versus electric operations under continued COVID impacts? Yes. So Jeremy, so lots to unpack there. Clearly, Michael laid out some of the trends that we're seeing in 2020. And now obviously, we've talked a little bit about 2021 in the past. So, Michael, why don't you maybe touch on some of those trends and then we can sort of look at the gas business and sort of the second part of that question. Yes. Appreciate the question. Yes, look, we did lay out quite a bit of detail obviously on to 2020. We continue to, I think, track pretty well with where we expected things to come out as we talked about at the beginning of the year. I think for the most part, it's coming in about where we expected it. The mix is a little bit different. As you think about 2021, I mean, we're doing a lot of different scenarios, Jeremy, and we're thinking about how this recovery is going to continue. And we are obviously modeling a recovery to continue into 2021, and we're looking hard within each of those sectors. And obviously, you've seen the strong piece on the residential side. Industrial has come back for the most part. Commercial is the area we're spending a lot of time on, just really trying to understand what that impact will be for retail, etcetera. So we haven't obviously provided what we're going to exactly see for 2020 one because we want to really see where 2020 continues to finish out here, being really thoughtful about it. I mean, to be honest, I'm not seeing a lot of scenarios where we would gain all of that back. I mean, I'll be honest about that. But we clearly do continue to see the recovery continue in place. Now all of that is premised on the fact that we wouldn't go back in any sort of shelter in place orders. And for the most part, where we're impacted by earnings here in Missouri, we're pretty well opened up. I mean, you do have certain sectors operating at some limited capacity restaurants or retail, those kind of things. And so we're assuming that some of that continues to come back. But again, all of that's premised on the fact that we wouldn't have any significant sort of shelter in place at the moment. Yes, Michael, I think that's a great summary. So I think Michael summed it up well. We continue to see pretty much what we expected at the outset. We expected a modest recovery over time. That's what we're seeing. And we'll give more guidance, of course, when we come out in our February conference call regarding 2021 and beyond. So we'll be able to give you some more perspectives. You asked about the gas business. And so keep in mind, our big gas business we have a small gas business in Missouri, but the big gas business in Illinois, and that's decoupled. And so when you think in terms of COVID-nineteen, the implications there are really not existing in terms of the overall impacts on sales and margins and the like. Yes, that's exactly right, Warren. I mean, we are decoupled for residential and small non commercial customer in Illinois, which is probably about 90% of the margin over there, Jeremy. So that's probably really the way to think about that for 2021. Got it. That's very helpful. Thank you. And maybe just pivoting a bit over to the Missouri rate cases. And what are the primary drivers of the timing of Missouri rate cases here? And do you expect to incorporate any IRP elements in your electric filing around the plant retirement? And are there any notable test year differences under a first half twenty twenty one filing versus filing now? Jeremy, so this is one. Look, I think that we'll be able to provide a lot more detail when we ultimately file the rate case. But as we said before, when we think about filing this next rate review, we're going to be mindful of the fact that we have some big wind generation projects, right, renewable wind generation projects that we expect to be substantially in service by the end of the year. So that's clearly a driver, always an opportunity to true up for costs and sales. Those are obviously the drivers as well. But to say there'd be any significant variations at this point in time, it would be premature. Marty and his team are diligently putting together that rate review, and as we we'll put together in the first half of next year. And so really I think the best thing to say is that obviously the wind generation is a big portion of it as well as the smart energy plan, right? That keeping not lose focus on the fact that we're making significant investments in Missouri. So those will be some key drivers to be looking towards and we'll be able to give you a better update when we file that plan sometime in the first half of next year. Got it. That's helpful. I appreciate it. Thank you. Thanks, Jeremy. Have a good day. Thank you. Our next question comes from the line of Durgesh Chopra with Evercore ISI. Please proceed with your I'm sorry, I didn't realize I was on mute. Maybe you guys talked about sort of you're going to be cautious and disciplined in including some of this incremental CapEx on the Q4 call. Perhaps what are between now and Q4, sort of what goes into that consideration of including the CapEx? And is it something incremental on the IRP that you want to hear? Just any thoughts or color around that would be appreciated. Sure. So this is Warner again. Look, as we've said in the past, we'll be thoughtful in terms of when we include new renewable generation projects, things from the integrated resource plan into our long term CapEx and look at a variety of factors. And certainly one important matter that we'll be mindful of is that Marty and his team, they've issued an RFP for the wind and solar projects. And so that's already out there. So we'll not only file the RFP, but we're taking steps to execute elements of that plan. And of course, an RFP and our ability to assess those projects from that RFP will be one important consideration that we'll look at. And of course, there are regulatory factors. It's always we want to be thoughtful in terms of when we do these things, looking at the nature of the projects, the regulatory approvals that will be required, all those things go into to our determination and when we actually put it in there. But as I said at the outset, the one thing is clear is that the opportunities from our integrated resource plan are significant and they're $3,000,000,000 through 2,030. And so Michael, any other thing that you would add to that? No, look, that's a great summary, I think, of the IRP itself. I mean, I think of just the normal kind of budgeting and stuff, the updates that we'll do in the February timeframe, we go through that process. Obviously, throughout the year, we continue to look at capital allocation issues. And so it will be the normal updates just in the course of the business that we run through. And so you certainly should expect to see that, and that's typically when we do that in that February call as well. Absolutely. Absolutely. That's great. And maybe just a quick follow-up. Could you comment on sort of how much room do you have in the state with PISA caps? I mean that's sort of something that we've routinely talked with investors about and how does the IRP plan fit into that? Yes, I appreciate that question. Really what we've said in the past, I think you're referring to the 2.85 percent cap that was built into Senate Bill 564. Really, there's only 2 things that have occurred. Again, that's a CAGR over that 'seventeen through 'twenty three time period. 2 things have happened since that legislation was passed. We had the, obviously, the federal tax reduction that occurred in 'eighteen. We were able to keep half of that for purposes of that calculation. And then we just obviously concluded this last rate review, which was another 1% decrease. So we haven't specifically said exactly how much headroom, but it gives you a sense that both of those things have been rate decreases. You had a 2.85 percent CAGR. So it gives you hopefully an idea of what kind of headroom we have today. Great. Thanks, guys. Appreciate the color. Thank you. Our next question comes from the line of Julien Dumoulin Smith with Bank of America. Please proceed with your question. Julien, how are you doing? Hey, good morning. It's actually Barry Slosney on for Julian. How are you? I'm doing terrific. How are you doing? Doing well. Thanks. Just wanted to quickly touch on your 2020 guidance. As I look at your drivers relative to the Q2 update, it looks like you're expecting an incrementally higher ROE in Illinois. And it looks like your Q4 COVID impact, once you back out the Q3 impact, looks like that's gotten a little bit better by about $0.01 So can you maybe just help us understand a little bit better what drove the reduction by a nickel at the high end? Yes. I mean, really, I think if you think about the reduction of the nickel, I mean, so if you go to the 3, $9.30 we're down about $0.04 obviously on weather. We've had a number of COVID impacts. There you can see about $0.17 or so along with that. And as we thought about it, we've offset a lot of those COVID impacts, obviously, with some disciplined cost management on the O and M side. And really, it's about adjusting that down by a couple of cents on the weather piece of that really is what drove that decision. Okay, great. Thank you. And if I could just touch on the dividend briefly. As you mentioned in your remarks, earlier, you guys it sounds like you have a little bit of latitude relative to your 55% to 70% range. So I know future decisions are obviously Board approval, but how should we think about future increases in the payout relative to the payout range and also see our 6% to 8% EPS CAGR? Yes. No, I appreciate this is Warner again. Clearly, the dividend is an important area of focus for our Board of Directors. And we've been clear all along that we target our dividend payout ratio of 55% to 70%. And so as you know, over the last several years that we have allocated a great deal of our capital to rate base growth, which is obviously driven strong earnings per share growth, which that coupled with our solid dividend has really delivered really strong total shareholder returns. So at the same time, I think as you pointed out, we've seen that dividend payout ratio now come lower down our overall range. And so that factor, coupled with our strong earnings per share growth expectations of 6% to 8%, it really positions us well for future dividend growth. And I can't ultimately predict that, but the point is that we try to execute our strategy and position ourselves for solid dividend growth and perhaps even greater dividend growth in the future. And so you saw our Board of Directors just increased it 4% just recently. I think that's evidence of their belief in our overall strategic plan and their confidence in it. And so we'll continue to visit that going forward. But that does just give us an opportunity certainly when you look at those metrics to continue to grow that dividend. Okay. Thank you very much. Sure. Thank you. Our next a busy day today. So in terms of Illinois, legislatively speaking, do you expect anything to happen in this abbreviated session here with respect to clean energy or the formula rate stuff that you put forward and what have you. I mean, do you see anything legislatively significantly happening with respect to you guys? So Paul, this is Warner. So yes, as I said in the talking points, we do not expect comprehensive energy legislation to be addressed in the veto session, which is coming up to obviously have 2 sessions scheduled in November December for certain days. So we do not see that at this point. Of course, we can't certainly predict that. But as we sit here now, we do not see comprehensive legislation on really any of those fronts being addressed in the Vimeo session at this time. Okay. And then just to clarify, it looks to me that you're although you're lowering the top end of the guidance for this year, your growth rate is still off of the midpoint of your original guidance of 2020, correct? Yes, that's the way to think about it. Absolutely, I guess, Michael. Awesome. Thanks, guys. Sure, Paul. Thank you. Thank you. Our next question comes from the line of Sophie Karp with KeyBanc Capital Markets. Please proceed with your question. Hi, good morning. This is Sangeetha for Sophie. Thanks for taking my question. Thank you, Sangeetha. Just a follow-up on the Illinois legislature question. Can you tell us when they do come back full time and if you have a sense of when they may decide to pick up this piece of legislation? Well, so we laid out on the talking points, the specific dates for the V dose session. And there's a thing called a lame duck session. There's been no specific dates for them to set that. That would be sometime in January. So whether they have that remains to be seen. That's ultimately up to the speaker and the President and the Senate. So no specific dates. But one of the things getting to the second part of your question is when might they take it up. I've learned long ago not to handicap, not just legislative proposals or when legislation ultimately be taken up. I will just say this that there is stakeholders are absolutely engaged on energy legislation in a lot of various forms, including the Downstate Clean Energy Affordability Act, right? That is continuing to be a topic of conversation as well as comprehensive energy legislation to address items and issues that are being addressed up in the northern part of the state. And obviously, we're very focused on things that are needed in the southern part of the state. So because of that, I do expect energy legislation to be a topic of discussion in the next session, but I certainly can't predict when and what form it will take at this time. All I can say is that Richard Mark and his team are advocating for the Downstate Clean Energy Affordability Act for all the right reasons because we believe it will deliver significant value for our customers, certainly for the State of Illinois. And we believe too, it will continue to deliver long term value for not just customers, but also for shareholders. So stay tuned. Thanks for that. And if I can follow-up with just one more. Can you tell us what the timeline looks like for the Mizuho IRP approval since that will give us some kind of indication on CapEx inclusion? Sure. A couple of things around that. I know Marty Lyons is on the line. He can jump into some of the specifics. But there is no set time period with regard to the integrated resource plan. History has shown that it's usually all addressed within sort of 1 year of the filing. And I think last time, it was around 9 months when it was all said and done. And so remember too, the commission when they go through this, they really approve the overall process and what we go through in terms of putting together the integrated resource plan. We don't necessarily go through and approve specific elements or projects contained within that plan. And so the process has been started, filings have been made. And then Marty, I'll let you come on in if there's any other specific details around that. But again, the commission doesn't have a set time period, but history has shown it's usually been within 9 to 12 months. Marty, do you have anything to add from that? Warner, that's all accurate. I would say that once you file the IRP, there's opportunities for others, other stakeholders to comment on their perspectives and any deficiencies they see. The commission at its option can have a hearing to discuss those matters that others bring up and ultimately will provide some perspective on the IRP. But typically what the commission does is just identifies whether there were any deficiencies or not. It's not necessarily an approval of the IRP itself or an endorsement of the IRP. So with all of that said, the other thing I would simply mention is, in our prepared remarks, we mentioned that we have already issued a request for proposal relating to projects that we would plan to do in accordance with our preferred plan. And we're not precluded from moving forward with negotiating or announcing or filing for certificate of convenience and need with the commission, there's nothing that precludes us from taking any of those steps before the commission actually rules on the integrated resource plan in the way that I mentioned. Thank you. Our next question comes from the line of Andrew Levi with Hite Hedge. Please proceed with your question. Hey, guys. How are you doing? Terrific. How are you doing? I'm doing well. Actually, I think I'm all set. I think Paul really asked my questions. But just to clarify, so the 5% delta from your guidance, we shouldn't carry that into 2021. There's really no effect from that as far as the midpoint or what was going to be your base or anything like that. It's all kind of weather related and kind of one time. Don't want to say one time stuff, but you understand, stuff that we can that will come back in 20 21. You got it, Andy. I think you said 5%, but $0.05 is I said $0.05 Yes. So anyway, so You made my knees buckled when you said 5%. Just keep on your spot. Did I say that? I apologize. No worries. But you're thinking about it the right way in terms of the jump off point. Okay, great. Our next question comes from the line of Insoo Kim with Goldman Sachs. Good morning, Insoo. How are you? Good. Good morning. Just one question for me. Can you just give us the latest update on the appeals process for the I think the judge's ruling last year on the La Vidi and Resh Island plants and whether we expect any updates before the end of the year? Sure. And Sue, this is Warner again. We have filed our briefs with the appellate courts, obviously, putting forth what we believe are very strong arguments. And so really where things are at today is that we're waiting for the court to schedule oral arguments. And we're so hopeful to have those scheduled by the end of the year. So that's it's going through the normal process. And of course, there are no specific time frames that the court has to or to take specific action. But, so we'll wait to hear the schedule and it's still possible to have them still by the end of the year. Got it. And if the decision the accretive process goes against you, then what are procedurally the next steps that you're considering? And given these plans in RFP, at least you've outlined some of the retirement dates and this could potentially require you to take other actions that were some of the thought processes there? So I think it, I'm just making sure it's a little bit garbled here in terms of is your specific question as a result of the court's decision on Marsh Island, might that change? Is that what your question was in terms of IRP? Not necessarily IRP, but if the appeals process doesn't go your way, what are the next steps? And just final thoughts around, given the remaining rate base of the plants, what are your thoughts around the plant position? Sure. Look, as I said, we strongly believe we have a great case. But having said that, if things go against what we think is the appropriate answer, then we'll do what we always do. We'll step back. We'll take a look at what we believe our next steps are. It depends on the specific actions and things that the court says, of course. And then we'll take a look and determine what we think is the in the best long term interest of our customers and certainly our shareholders. So it'd be premature to speculate just exactly where that might head. Understood. Thank you very much. Thanks and take care. Thank you. Our next question comes from the line of David Tapp with Wolfe Research. Please proceed with your question. Good morning, David. How are you? Yes. Good morning, Warner. How are you doing? I'm terrific. Thank you. Great. Just one follow-up question, maybe. Assuming you were to own the 1.2 gigawatts of renewables under your preferred option in the IRP, and I think those are projected to be online by year end 'twenty five. Do you anticipate that to be have an upward bias on your EPS growth target or will that CapEx renewables CapEx push out or displace other non renewables CapEx in that 'twenty four, 'twenty five period? Yes. David, this is Michael. Probably won't be a terribly satisfactory answer. But I mean, I think, look, we're just we're probably a bit premature to speculate on that. I mean, it's something that we will be very thoughtful about, and we'll take a number of things under consideration when you look at it, just in terms of what the overall rate impact is, the timing of it. I mean, hopefully, we'll be able to give some additional color on that in February, as Warner talked about. I mean, we don't want to get ahead of just the regulatory process there. But we'll be very thoughtful about it, but it's probably a bit premature to answer that. Okay. Understand. Thanks. Thanks, David. Thank you. Ladies and gentlemen, that concludes our time allowed for questions. I'll turn the floor back to Mr. Kirk for any final comments. Yes. Thank you for participating in this call. A replay of this call will be available for 1 year on our site. If you have questions, you may call the contacts listed on our earnings release. Financial inquiries should be directed to me, Andrew Kirk. Media should call Brad Brown. Again, thank you for your interest in Amarin. We look forward to visiting with you at our EEI meetings next week. Until then, have a great day. Thank you. This concludes today's conference. You may disconnect your lines at