Welcome everybody. This is the first session of the day for the Fresidius Global Energy Fresidius Global Energy and Utility Conference. My name is Ryan Levine. I cover the utility and energy infrastructure space. I'm pleased to be joined here with Con Edison's CEO, Tim Crawley.
And yes, maybe I'll hand it off to Tim if you have any opening comments.
Yes. Ryan, thanks a lot. Very great to be here. And as we sort of work our way out of the pandemic, very optimistic about our future, incredible people, incredible service area to provide vital services to. We've been doing it for over 200 years or almost 200 years.
We are steady at the helm, 47 years of dividend growth. And I think really our focus will be on continue to be on delivering safety, reliability and customer service to this great region. Also look to help the region transition to this clean energy future. We think we're well positioned to do that and it will provide us with some really great investment opportunity. And also given all that has occurred over the last year regarding systemic inequality, really working to build on a strong long foundation here at Con Edison to redouble our efforts to rid the workplace certainly in society of those issues and have articulated a number of goals around that space.
But maybe best to open it up to the discussion and we'll be able to cover ground that way.
Okay, great. Maybe to start off from a high level, you've been in the current seat for about a quarter now as the new CEO of Con Ed. What are your reflections on the 1st few months? And what are your what are you hoping to accomplish?
Yes. So, yes, the Q1 has gone quickly. I'm 34 years at Con Edison, right out of college. So lots of experience in the company. And I sort of carry that into this Q1.
And frankly, 2020 was a very challenging year, a year like no other from so many perspectives. But as I mentioned, I'm really encouraged about the company, our service territory and our future as we move forward. A few reasons for that. The first is, it really does feel like we're moving past this pandemic. New York City and the area is incredibly resilient.
Following the Great Recession, we were amongst the first to recover. And while we need to stay focused on all of the safety guidelines, that's the public service announcement I always make, the size of recovery of all around us. I think on Monday, subways are open 20 fourseven, ballparks will fill more, Broadway shows are opening. So you can feel the level of energy and sort of return happening to our region. The employment base in New York City is really strong.
And part of that is because it's expanded and evolved. And people will, I think in the next normal take on different roles and work schedules, but it will be a strong vibrant economy in New York. We are a cultural mecca, more and more technology is moving into the area, higher ed, high-tech. And we continue to obviously be financial and media centers of the world. The second piece of optimism I hold is societies and New York State, frankly, and Con Edison's desire for a clean energy future.
It's a driving force in everything we do. And Ryan, when you think about big disruptions, such as the pandemic, and frankly, there may be no bigger than the pandemic, policymakers can often take that hit and reflect and rethink about what the priorities are coming out of that event. And I think with regard to the desire for clean energy transition, policymakers and society have only redoubled their conviction that this is the right thing to do. So rather than backing off of that coming out of this hard period, I think there's more conviction around it. I think that feels right for Con Edison and it certainly feels right for the area.
And the other piece of the clean energy transition that I'm optimistic about is that not only will it be good for the earth, but it can help revitalize the economy, lots of good jobs in that space. We recently did a solar project on top of NYCHA housing and effectively NYCHA residents can subscribe for lower fees by participating in the clean energy transition And NYCHA residents are actually trained to be the workers in that new industry. So it's about jobs, it's about availing low and moderate income customers to this clean energy transition and using good space on NYCHA roofs to reduce this renewable energy. We think we're really going to be a leader here and we have the expertise and the balance sheet to do so. And my 3rd piece of sort of optimism as they come out of the Q1 is our people.
Ryan, they don't cease to amaze me. I feel incredibly proud to be part of this team. Their resiliency, innovation, dedication to the customer through all of this has been frankly incredible. It hasn't wavered. So a lot of challenges are coming out of, but I think I walk into a period with great optimism for society, for our investors and for our employees as we move forward.
Appreciate that. So you touched on the clean energy ambition. What do you see as the pathway to get greater precipitate for your utilities in the state's clean energy agenda?
Yes. And I would say that we are already extensively involved in that. It's sort of foundational to who we are, environmental excellence and a commitment to the environment. And I think there's more we can do. So in terms of the we're already participating in that pathway.
Our energy efficiency programs and investment and earnings off that investment have grown considerably over the last few years. We have a very talented team that can deploy this energy efficiency to the benefit of our customers. We'll invest $1, 500, 000, 000 by 2025. And uniquely, that investment used to be an expense pass through and has since changed to what looks like rate base over a 10 year depreciation period. So we're able to deploy the capital, help investors save money, help the environment and earn for our investors at high levels of investment.
We're also going to invest about $350, 000, 000 in total in EV Make Ready programs. So Ryan, in this city of ours, about 20, 000 vehicles are registered as electric vehicles and really low, if you've driven the New York traffic, 20, 000 vehicles like no vehicles. And there's great ambition to grow that significantly to get the clean energy future we're looking for really need to hit 3 sectors. We need power generation and there's a renewable piece that I'll talk about, renewable generation. There's building heating, and that's really about electrification of heating.
And then there is electrification of transport. And we have lagged many areas in the country. California really leads the way. And so the issue with the lag is this range anxiety. If folks can't find chargers, they're reluctant to get a car for fear of getting stuck.
And so we'll invest $350, 000, 000 in make ready, effectively putting the infrastructure in to serve these chargers and the building owner to take advantage of that incentive simply has to make those charges accessible to the public. And so we're getting big interest in that. And once the charges come out, people will be relieved of that range anxiety. And I think we'll see a lot more EVs on the road. So that all goes to say, we're already playing a big role.
We're also doing a lot on battery storage, Ryan. New York State has a goal of 70% renewables by 2, 030 and much of that will be wind and solar, which is intermittent. You get what the sun and the wind provide. And so to keep the grid reliable and firm, you need things like battery storage. We are working with a partner to develop the largest battery storage project in New York State.
It will be placed in Queens in Astoria. And the irony here is that storage site will be at a location of a former fossil fuel power plant. So it really points to the stark transition the region is going through. We'll work with that partner, we'll invest and earn on that investment over a 7 year period. And then the last piece that I'd want to talk about, and we haven't taken a foothold yet, but we continue to make a strong case, is on large scale utility ownership of large scale renewables.
These are large solar fields in particular. And as I said, New York State has a goal of 70% renewable by 2, 030. And today, as we sit here, about 25% of New York State's energy is produced by renewable power. And of that, most of it, 22% of the total, most of the 25 percent is Canadian hydro. So we really haven't moved the needle a whole lot on the renewable front.
3% consists of solar and wind. There is more and more being procured, but there's a far way to go. To make the 70 by 30 goal, 70% renewable by 2, 030, we estimate around 2, 000 megawatts of renewable will be needed in the state per year between now and 2, 030. And so we think for a few reasons, we should help participate in that, help the state achieve its goal. The first is, it's good for customers from a cost perspective.
We would competitively source these things, we would get a regulated return on it. And the customers would benefit from the full life of that asset. So after typically a private developer would sign a 20 year purchase power agreement. After 20 years, that site is still producing electricity and effectively that power would be re contracted, the customers would pay a second time for those assets. Under our model, customers would get every bit of good out of that asset to the bitter end.
And so in addition to that residual or tail life value, which is significant for customers, if we change technology out, the customers would benefit from that. The capacity of solar panels is getting better and better every day. So in 15 years, you might change panels out and increase production by X percent and again customers would benefit from that. And the last piece about customer benefit in New York State would be New York State residents and customers would get all of the benefit and that power would stay in the state. That may not be the case with 20 year contracts and others.
So we're there are bills that are being considered in the state Senate and Assembly. We're getting some support or at least interest to explore from some labor unions and some environmental groups. So the path forward is not fully clear on how we can participate more in that space. But we continue to make the push. And as I said, given the very aggressive goals New York State has, every day that passes, we think our case becomes more compelling.
It should really should be all hands on deck. And I'll add 1 more thing, Ryan, and then I'll let you in. Transmission is another key to unlocking this clean energy transmission. We'll be participating in some transmission projects in Brooklyn and Queens to alleviate some peaker units that will be retired because they won't make emissions limits. And maybe I'll stop there and we could pick that up at another time or in-depth later in the discussion.
Yes, I appreciate that comprehensive answer. Maybe touching on the Maybe touching on the last point around transmission. So last week, you announced the 600, my memory serves me the $600, 000, 000 transmission projects for your clean energy solution to address congestion issues with some peaker going offline? More broadly around transmission investment opportunity, are there other opportunities that you see to augment your baseline plan to help address reliability for customers and other needs? Or is this more discrete in nature given the project scope?
No, I think it's broad and I'll sort of hit on 2 specific projects that we're into and then talk about the broad nature of the investment level needed in New York State to move renewables to where they need to be. So the first you mentioned is New York Energy Solutions. We're part of Transco. Those are
the investor owned utilities formed a holding company and we'll invest, we are investing and building now in a project that will move power from the northern part of the state into the load center. New York City and Long Island consume about 40% of the power in the state. So pretty big state geographically, but our small footprint is where the energy density is. And we need to move power from where it is, renewable power Upstate New York into this region. So that's a $600, 000, 000 project.
We own about 46% of that project and that will go into service in 2023. You mentioned the peaker units and I did as well. So these peaker units come on, they don't run a lot, but they are high emitters of NOx. And the DEC came in and said, if you can't meet these standards by 2023 2025, you'll need to retire. It'll cause about 1400 megawatts of these peaking units to retire.
We just got approval in between rate cases to do 3 transmission projects within the areas of Brooklyn and Queens and a little bit in Staten Island to address the loss of that generation. So 1 project will go into service in 2023, the remaining 2 in 2025. The total investment is about $780, 000, 000 And that's a really good example of the investment level that will be needed to transition the grid from what it does today to what we will need it to do in the future. And then I'll spend 1 more half a minute on the broad transmission need. The joint utilities filed in a proceeding started by our regulator.
And the real question to be answered was, if we're going to put 70% renewables by 2, 030 and emission free electricity sources by 2, 040, 100%, what does the grid need to do from a transmission and a distribution perspective? And the answer is, across the state about $12, 000, 000, 000 of investment in transmission, dollars 12, 000, 000, 000 and in our region, we think it's about $4, 000, 000, 000 of that $12, 000, 000, 000 And a big piece of that is the state as part of this, their initiative, their transition initiative to a clean future. The state has embarked on 9, 000 megawatts of offshore wind. And part of that transmission need, part of that $4, 000, 000, 000 is how do you land 9, 000 megawatts into New York City and Long Island and then move it throughout the grid. We envision transmission hubs that would basically bring these leads into a central substation and disperse it from there.
We think that's the most economical and efficient way to do it. And that would be part of the $4, 000, 000, 000 And Ryan, I should sort of be clear, the manner in which that work gets divvied up and awarded is not fully clear yet. So we may get some of it, much of it might be competitively bid and might be public solicitations. But sort of the gist of what I'm saying is the scaled investment in our space is going to be very big over the next decade or 2.
Are you playing a role in, I guess, PJM is running a process to review the transmission needs for offshore wind? And there is some debate around some type of backbone system versus more spaghetti like distribution. You mentioned hub and spoke, but how does that play into the broader conversation with the grid operators and other parties?
Yes. And I think, Ryan, I'll answer sort of generally. The first few wind projects that are being developed, NYSERDA is already awarded about 4, 200 Megawatts and 1, 200, 000, 000 in 2 Lots. But the first lot that's been awarded really will be a generator lead connecting in conventionally to our system, to substations our system, much like any other lead would connect in the interconnection process. And when you look forward and you plan for the longer term, individual generator leads for 9, 000 megawatts is not the most cost effective or reliable system that we can build to.
So the early the origins will be generator leads coming in, But there's got to be a broader view of what's going to be out there and how to best receive it. And that's where we come up with the transmission hubs. And in many places, Ryan, they've started with leads. And then as there's some critical mass generation at sea, you begin to do a sort of a bus bar at sea, if you will, an interconnection so that you can flow power to multiple points on the grid and that'll get built out. So we know the goal of the state is 9, 000 megawatts.
There's been awards for over 4, 000. We said, if all this is coming, let's plan for it. And frankly, we think the hub, sort of this receiving hub is efficient for bidding as well. It's a common bid. People are getting going to get out to that bus bar of the substation at a common location.
It will make comparisons of competitive bids easier to do.
Maybe switching gears slightly, so you recently, I guess, impaired the Stagecoach asset. This is was the genesis of that impairment, was it purely your accounting or does that signal that a sale is imminent given the improved strength in midstream capital market activity and some of the ROFOS and rights of some of your partners in that project?
Yes. So we invested in Stagecoach 5 or 6 years ago. And at that team, at that point, we really viewed midstream gas as part of the solution to the clean energy future, a bridge fuel. That thinking has changed on our part and many others, particularly in the Northeast. And so really this midstream gas is not part of our long term strategy.
And we don't have a lot of it. We've got really stagecoach and MVP. And so we're really considering strategic alternatives now. We're in the throes of the process to see what we'll do with it. And as you said, we recorded impairment.
And the range of our outcomes for earnings in 2021 really considered the strategic option. So from high to end, low, whether we hold it or sell it. But we're in that process now and would expect to make an announcement. We will make an announcement at the proper time once that disposition is settled.
Okay. That's helpful. And can you just remind us that your partners have a ROFR or FO or how does the contractual arrangements work there?
Yes. So we've been largely in lock step with our partners on the process. So I think they have a ROFR, I would have to check. But I can tell you, Ryan, that the discussions with Crestwood, our partner have been really positive and we're working toward a mutually beneficial solution at the end of the day.
Okay. Interesting. So, yes, and then maybe in terms of we start off with COVID related recovery as we're you're in the office in person. Curious what the long term plans are for Kona as an organization around O and M cost management as more and more people are returning to the office? From a footprint need and cost management, how you're envisioning that post COVID?
Yes. And just to frame it up a little bit. So obviously, we provide essential services to this great city in the region. Notwithstanding the horrific impacts of COVID, about half of our folks never stopped doing precisely what they do. We spread them out, we staggered shifts, but the people who fix gas lines and install them and repair the electric cables and the overhead lines, they continue to do what they were doing.
So about half, we spread them out, staggered shifts, we made sure we follow CDC guidelines, but they kept doing what they're doing. The other half, very quickly, we're able to support the operations remotely. And we'll start to bring those folks back. And we have a team, we have a pandemic team that's been around for a long time that really helped us react quickly last March to this virus and its impact. And we also have a team looking at sort of return to the next normal.
And some of that might have an impact on real estate footprint going in both directions. We might need more, a little more space in some facilities. We might have to adjust ventilation in some facilities and we're working through some of those things. And then it might call for certain folks or certain folks working from home more than they do now. Our contact center is 1 example.
We have historically had our folks in on-site in the call center activities and we've been really effective in a remote stance. So there might be a percentage here for contingency and security, but many of those folks might continue to work from home and that would shrink footprint on certain of those. Really not anticipating sale of properties, but in some cases, we lease properties here and there, we would take a look at leases moving forward. And we have a team, frankly, looking at that, Ryan, no decisions made yet firmly, but we've got a close eye on
that. Great. And then maybe in terms of the regulatory outlook, are you thinking about approaching the relationship with the state and city differently than your predecessors? Or how are you envisioning the key priorities from those relationships?
Yes, I wouldn't say differently. We understand great value in working closely and collaboratively with lawmakers and policymakers and elected officials and other key stakeholders and we'll continue to do that. I think we it's our belief and frankly in our nature to be incredibly transparent about issues. And we think if we share transparently and provide input and keep the lines of communication open, it can help with regulatory outcomes and frankly outcomes for our customers. When we make the case hard, I went on a little bit about large scale renewable ownership.
We really do think that's in the best interest of our customers and that's why we won't let it go. And so I would say, the same approach with a focus on transparency and over the lines of communication with all those folks, key stakeholders.
In terms of maybe a broader Con Ed perspective, is there more appetite for acquisitions or divestitures on a go forward basis? You had highlighted several times appetite for more renewable. I think you're referring mostly to New York State, but to be part of the Con Ed portfolio with the shift towards clean and green, Where's your priorities lie on that front?
Yes. For mergers and acquisitions, I would say and I will always say, we'll look at it. I think it would have to work for our customers. It would have to work for our shareholders. So there have to be real value out of the synergy there.
I think we'd have to be sort of practically doable. If we were ever to think about an M and A, would we see it through to the end? I think we'd be focused on ensuring that a partner had the same sorts of values and interests. We are really committed to a clean energy transition. And so any partner would either have to be on that road or be willing to aggressively get on that road.
And I don't think that's unique in our industry. I think people are different places at the starting gate, but desire to move ahead is there. We would want to make sure the desire and pace was equivalent. So we're always looking at these kinds of things. And I would say, good for shareholders, good for customers, doable and sort of consistent minded with regard to our values, particularly as it relates to green and the clean energy transition.
Okay. And then just in terms of the surcharge maybe more broadly, how are you looking at Maybe more broadly, how are you looking at a post pandemic world around trying to address some of the regulatory mechanisms you have around bad debt expense and other issues?
Yes. So obviously a huge impact to our region economically, a big impact to us and many companies. On the uncollectibles, we have a pretty good regulatory compact. So we have a change of law provision in our rate case. And basically, New York pause stop the economy in New York for all the right reasons.
But that law frankly increased our uncollectibles significantly as customers and businesses struggled with their payments. We did not press customers. We didn't apply late payment charges. We didn't shut customers off all for the right reasons. We're part of the fabric of this place and we want to make sure it drives.
We want to engage with customers to sort of find ways to get them back on their feet. So that part of the regulatory compact is strong and we will be able to reserve those uncollectibles for future collection. Late payment charges are a little different. That change of law provision deals with expenses, not revenue. It's a technical difference.
But late payment charges are in fact revenues. Last year, we the foregone revenue was about $50, 000, 000 and in 2021 2022, it will be about $70, 000, 000 a year. So that filing basically said, listen, we've got impacted by COVID. We didn't apply late payment charges for all the right reasons. There's a technical nuance in expense versus revenue and we would like to collect it.
And it calls for the PSC to work through the issue by September, but not clear what the calendar is. And frankly, Ryan, not clear what the outcome will be. But we think we put an appropriate and well articulated case forward. We think it's right and proper given the change of law provision. And so we'll see where that runs as we move forward.
And really it looks to recoup the lost revenue from 2020 and then just be made whole in the years in 2021 2022. It's not clear when we'll start to reapply late payment charges. We would just want to be made whole for any that we did not apply.
Okay. And just as a reminder for folks listening, if you have any questions, feel free to email me directly. I think there is a button in your screen that you could ask a question or type in question through the technology. So we covered a number of topics. In terms of the federal policy changes that are being proposed with Biden and Wyden and some of the other bills at the national level, how do you see that strategically with the various proposals around storage and transmission and solar and wind, DTC, PTC extension?
Yes. And so I'd say it's early tell still unfolding obviously and much ahead, but I think thematically it benefits the country, certainly benefits the industry. And the extent to which it directly impacts us, unknown at this point, but we're following it closely. And I'll give you some examples. So for there's a lot of discussion in the drafts about electric vehicle infrastructure and rebates for cars.
And so whether or not we get the direct investment, it is good for our business that there are more electric vehicles out there. It's good for the economy and it's good for the environment. And so rather than using liquid fuel, they'll use the product that we distribute. And so any push in that direction is beneficial. Certainly for transmission, if there are tax incentives to install transmission at various levels, that can help promote the transition to a clean energy future.
And frankly, keep some costs off the customer bill through that federal support. So that's good for our customers as well. But the shorter answer is Ryan, we continue to follow it closely. And I think thematically a very positive impact for the industry. We'll have to see precisely what it means for Con Edison and our investment opportunities.
Would you look to accelerate potential future repowering Yes. So
Yes. So we'd have to look, we don't own power plants, right. We moved the power in about around the year 2000, vertical integration was halted in New York and we sold our generation. The only generation we have in the regulated utilities is that to support our district steam system here in Manhattan. So really no repowering to be done within the regulated utilities as we don't own generation.
And then the CEVs would take a look at the impact of any tax credits that they could invest in mostly solar and potentially wind as well.
I mean, as referring more to the unregulated, but I mean, are there already you're already thinking through the implications of additional investment there or is it still too early to commit to that?
Yes, the team is thinking through it, but I think it's early yet. And we've been through various stages of tax incentives as they've been there and it begin to sort of roll off. So they'll put that into their thinking and we'll evaluate it once there's been a certainty around what those levels are going to be.
Okay. More broadly in terms of load outlook within your service territory in light of this some of the high level dynamics you had highlighted. What are you seeing and anticipating for load and kind of what's the broader outlook for Saucony in your broader footprint?
Yes. I think the region will rebound. I talked about some of the signs of that and New York City is New York City. And so I think we'll be really in good shape over the long haul. Last summer, Ryan, we saw and not surprisingly, the commercial centers, Manhattan, for example, consume less energy and the residential areas ticked up some and that's people working at home rather than these large office buildings in Manhattan.
So Manhattan consumption was down by 11%, 12% in Manhattan. And depending on the region and the neighborhood, there was an uptick in consumption as people stayed home. And frankly, during the summer, many didn't travel. So people were here and people didn't travel to the region. So this summer, we expect consumption to be up slightly from what it was last summer.
And that's consistent with what you see happening on the streets and in the restaurants and in the ball fields. But down from what would normally be. And the long haul, we think there'll be some continued growth. We have really on both the electric gas, electric gas and steam system focused very heavily on energy efficiency. And really that retards some of the growth.
But again, we're made whole for that through revenue decoupling and we earn on the energy efficiency incentives. So we're okay there. So the growth will be slow moving forward, but we think there'll be a rebound.
Okay. Cybersecurity has become more topical over the last 2 weeks than in the past. And looking through the Con Ed filings over the last several quarters, I think there is some disclosure about increased cyber attacks on Kana's facility and some of the more headline grabbing dynamics, I guess, in the late last year. How does how do you think about managing that potential risk from an operation standpoint and for security that customers you serve?
Yes. And how do we think about it? I can tell you, we think about it a lot. And we put a lot of effort into it. And not with saying the fact that of late in the news, there's been a lot of cyber talk and discussion on attacks.
We have been at this for a while and we will be at it forever, quite frankly. And we continue to do more and more in this space. I'll give you a few examples of the things we do. The first is we have augmented our cyber team and we've got a number of protections in place, firewalls, etcetera, and monitoring systems that can let us know if there are potential attacks on the system. We configure our systems such that the most vital systems are not connected to our general email system.
So an energy management system would be well separated and isolated from other functionality. We have incredibly strong ties and communication links to those in our industry and those government officials and information sharing is really key. The ability to understand what's happening more broadly across the enterprise can allow all of us to prepare and react more readily. We are designing in every time we engage in an information technology project, at the core of the evaluation is how cyber security is it. And we really are getting to the point where it is a key component of our purchase racks.
If we're going to go with the system, 1 cybersecurity built in are the principles there. We don't want to add it on. We want to integrate it into the product itself. Cyber hygiene is key. It sounds simple, but that's the biggest cause of attacks today.
Lose use of passwords, not patching applications. It sounds simple, but that is really what the biggest driver is. So the shorter answer is we've been thinking about this a long time. We continue to dedicate more resources to cybersecurity. And in our financial disclosures, we talk about it because it is a risk.
It is a risk of every company and we are dedicating resources to help address it And it will never be done.
There is a city hosted a conference call earlier in the week with some security experts and they were saying that there was a lot of companies have insurance against these type of issues and sometimes payments are made to counterparties. Does Con Ed have similar insurance or is there any color you could give around past treatment of past attacks on the system?
Yes. So we on past attacks, that's these are issues of ransomware and other issues like that. We've not been subject to that. And it really that's because of largely protective mechanisms we have in place. We have a computer operations center, security operations center, if you will, and 24 hour, 20 fourseven control room that's really looking at our networks and activity on our networks.
It has grown in scale and scope. And so, we've not been subject to any of that. We do prepare for those kinds of things and drill for them, but have not been subject to them. And certainly, I talked about information sharing, lessons learned from others get incorporated to our thinking and that's another benefit of that information sharing.
Great. And then the other hot topic recently is inflation concerns and worries both on steel and input costs and more broadly on interest rates. Given your fairly robust CapEx profile over the next several years and just ongoing operations, how are you positioned around rising costs for commodities such as the transmission project that you discussed earlier?
Right. So the transmission projects we're into now, we bought the equipment. But longer term, it is an issue with cost. And many of our contracts, I'm sure you can imagine our index to those core metals. So transformers have a lot of copper.
There's a lot of steel in our business. And so a number of our contracts index up periodically or down with the cost of those metals. We want to do everything we can to minimize the cost to customers. So to the extent that that goes up, we'll always endeavor to find efficiencies elsewhere on the system. We do that always and every day.
But I wouldn't say it's an incredible impact. When we install an underground transmission line, much of the cost or a large percentage of the cost is sort of in the trenching and the conduit and the labor to install. The materials are there, but it's not the full cost of the project, it's a portion thereof. And if the percentage goes up on a portion, it's typically manageable.
Just for ongoing operations. And then from a CapEx standpoint to the extent that things cost more on a go forward basis, is the natural inclination to dial back number of projects to keep dollar spent constant or is there more inflation to the CapEx and therefore you get higher earnings outlook and a rate base?
Yes, I wouldn't think of it as higher earnings outlook. We largely work within the parameters of the agreed upon rate case. And again, much of our capital investment is labor and non metals related. So it will have any impact, but I wouldn't say a significant impact. There might be some reprioritization within that whole of the agreed upon joint settlement, but not a huge impact.
Okay. So, I think we're running towards the top of our allotted time. But I want to thank you for taking time to speak with us and leave it to you if you have any closing comments or remarks.
No, Ryan, really great to speak with you. Thanks for taking the time out. I enjoyed the discussion. I would just sort of recap by saying very much looking forward to the future. 2020 was rough.
I think the company and its employees really demonstrated the resiliency, but looking toward brighter days ahead. And I think the economy is picking up post pandemic. And I think societal's desire for clean energy future is so consistent with where our values are. I see us continuing to ensure safety, reliability, customer experience to this great region, working to enhance diversity inclusion within the workplace. Certainly, we've an incredibly strong foundation, but recognize there's more work to do and are up to doing that work.
And look forward to helping the region economically and environmentally, people, planet and profits. It really does tie in particularly this transition to green. We are helping society and the investment will allow us to help our shareholders as well. And when I meet with employee groups, they get incredibly charged up over our desire to do the right thing by the environment and the people who work here and who we serve. So with that, maybe I bid you a really great day, Ryan.
Okay. You too. Thanks again. Appreciate it.
Bye bye.
Very good.