Earnings Call: Q4 2020

Feb 19, 2021

Good morning, everyone, and welcome to Portland General Electric Company's 4th Quarter 2020 Earnings Results Conference Call. Today is Friday, February 19, 2021. This call is being recorded and as such all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period. For opening remarks, I will turn the conference call over to Portland General Electric's Senior Director of Investor Relations, Jardan Jalamino. You please go ahead, sir. Thank you, Shalon. Good morning, everyone. I'm pleased that you're able to join us today. Before we begin this morning, I'd like to remind you that we have prepared a presentation to supplement our discussion, which we'll be referencing throughout the call. The slides are available on our website at investors. Portlandgeneral.com. Referring to Slide 2, some of our remarks this morning will constitute forward looking statements. We caution you that such statements involve inherent risks and uncertainties, and actual results may differ materially from our expectations. For a description of some of the factors that could cause actual results to differ materially, please refer to our earnings press release and our most recent periodic reports on Forms 10 ks and 10 Q, which are available on our website. Leading our discussion today are Maria Pope, President and CEO and Jim Agello, Senior Vice President of Finance, CFO and Treasurer. Following their prepared remarks, we will open the line for your questions. Now it's my pleasure to turn the call over to Maria. Thanks, Jardan, and thank you all for joining us today. I'd like to take a moment to formally introduce Jim Augello, our new CFO, who many of you already know. Please join me in extending a warm welcome to Jim. As many of you know and many of you may also be experiencing yourself firsthand, millions of Americans have been impacted by severe winter storms this past week. In Oregon, we have had a historic storm system move through over a 4.5 day period. It brought punishing wind, ice and snow through 3 separate storm systems and left 100 of 1000 of PG customers over a third of our customer base without power. The significant ice late in the storm system is particularly punishing to trees and power lines. In less than a week, we have restored over 600,000 customers and we still have about 68,000 customers to go. Many customers have experienced multiple outages. As restoration continues, we appreciate the fatigue and deep frustration of customers who have been without power for extended periods. Our deepest gratitude to everyone who was working 20 fourseven to restore power. In addition to our PGE coworkers, hundreds of line workers from neighboring utilities and contractors are working tirelessly alongside our crews in very challenging conditions. As we look back over 2020 and into the new year, we are proud of how we have responded to significant challenges that tested us like never before. From the pandemic, civil unrest, trading losses and historic wildfires to these recent winter storms, our team has remained focused on delivering for customers, supporting the communities we serve. We take very seriously our role as an essential service provider. Given the trading losses, our financial results were disappointing, but we delivered solid operational performance and improved throughout the past year and through the pandemic. We also have consistent momentum that is in line with our long term growth strategy. We took actions beginning early in the pandemic to control customer prices with an appreciation for the economic hardships of many of our customers. Today, we are more efficient with improved reliability and getting more work done. We are also seeing the positive impact of investments in our distribution system, including investments in substation upgrades, new wood and steel poles, distribution automation and other resiliency investments. We improved operational efficiency by leveraging technology, improving overall workflow and operations. We deploy solutions to better serve customers with innovative and clean energy solutions. We are enabling our employees to work more efficiently. 2020 was an important year for us in our journey towards a clean energy future. We announced significant decarbonization goals of net 0 greenhouse gas emissions by 2,040 including at least 80% reduction in the power supply to customers by 2,030 relative to 20 10 levels. This ambitious company wide goal will touch every aspect of our business from the power we serve customers, to the vehicles we drive, to how we operate our buildings and operations. In the Q4, we closed the Boardman Coal Plant and opened the Wheatridge Energy Facility, one of the nation's first facilities to integrate solar and wind generation with battery storage at scale in one location. We're also working to serve many municipal and industrial customers with 100% renewable energy under our green tariff programs building on their number 1 decade long residential clean energy programs. Partnership and support for our communities and employees is also central to who we are. To that end, PGE along with employees, retirees and the PGE Foundation donated $5,600,000 and volunteered over 18,000 hours with more than to more than 400 nonprofits across Oregon. Diversity, Equity and Inclusion has long been a core value and we measure and publish progress as well as pay equity and other key metrics publicly. Inclusion in the Bloomberg Gender Equality Index and a perfect score on the Human Rights Campaign Foundation's Corporate Equality Index reflects our years of focus and work in this area. However, we know that there is still much work to do. As we reflect on 2020 and look to the year ahead, the responsibility we have as an essential service provider, a leader within Oregon's economy and a crucial partner to customers and communities we serve has never been more important. I want to give a special thanks to our teams who have spent considerable time and energy Through these historic storms and record outages, many are working 20 fourseven to restore power. I'm humbled by the strength, dedication and resilience of our teams. We will not stop working hard until every customer is back online. Now let me turn the call over to Jim. Thank you. Thank you, Maria, and nice to speak with all of you today. I want to start by echoing Maria's comments. The number of customer power outages and widespread damage to our electric system is unprecedented and we recognize the hardship these events have created for our customers. Our entire company is focused on restoring power to our communities and repairing our system. And I'm so impressed with my new teammates at PGE. Although PGE faced a number of challenging circumstances in 2020, it's clear that this team's hard work and focus on advancing our strategy is paying off. PGE is in a strong position to build on the momentum we've established and deliver long term sustainable growth. I'm excited for the opportunities ahead to further reduce carbon emissions, invest across our service territory and continue to reduce cost company wide to keep customer prices low. Now I'll briefly comment on the economy in our service territory. While recovery is continuing in the hardest hit segments of the economy, such as lodging and restaurants, other segments of our economy have been less impacted by COVID-nineteen and performed well from a load growth standpoint like residential, high-tech manufacturing and digital services. In the long run, our 1% average load growth anchors on the strength of these sectors as well as continued in migration. Our load growth this year remained consistent with long term trends despite the change in composition due to the economy's response to COVID-nineteen. And our customer base continues to grow. Despite the COVID-nineteen pandemic, Oregon continued to rank high among the states, ranking 3rd inbound moves. Construction spending on both residential developments and commercial projects throughout our service territory is strong in several major infrastructure projects around the horizon. Let's cover our financial results on Slide 5. In 2020, we recorded GAAP net income of $155,000,000 or $1.72 per diluted share compared to GAAP net income of $214,000,000 or $2.39 per diluted share in 2019. We finished the 4th quarter earning GAAP based earnings per diluted share of $0.57 compared with GAAP based earnings per diluted share of $0.68 in the Q4 of 2019. Our 2020 non GAAP net income was $247,000,000 or $2.75 per diluted share. This amount is adjusted to reflect the previously disclosed one time energy trading losses of $1.03 per diluted share. Looking ahead, we are initiating 2021 full year earnings guidance of $2.55 to $2.70 per diluted share. We are also affirming our long term earnings guidance of 4% to 6% growth off 2019 earnings per share of $2.39 Turning to Slide 6, allow me to walk through the earnings drivers for 2020. First, we saw a $0.06 increase in retail revenue as load increased 0.4% year over year, weather adjusted. This increase was particularly offset partially offset by the impacts of changing load composition on our decoupling mechanism. We also achieved a $0.12 increase due to a lower net variable power cost as a result of low market prices and the effective dispatch of our generating facilities. As we've been saying to you all along, wind was particularly strong. In fact, our wind resources produced 23% more energy when compared to 2019. We drove a $0.33 increase in connection with our lower operating and maintenance expenses. This year served as a catalyst for making long term sustainable operational improvements company wide. I'll discuss these in more detail in a moment. Continuing on Slide 6, we have a $0.26 decrease associated with higher depreciation and amortization, which consisted of $0.09 from higher plant in service in 2020 and $0.17 attributed to a measurement of the company's only non utility asset retirement obligation on land we own along the Willamette River at our Sullivan plant. In 2020, we reassessed stakeholder needs and the long term strategy for the site, which included an updated 4th quarter study. The site study resulted in a significant increase in our retirement asset liability. These changes, however, derisk our ability to respond to long term strategic opportunities at the property. Further, there was a $0.10 increase associated with higher production tax credits from favorable wind generation compared to our forecast, and then a $0.01 increase for miscellaneous items. This brings our non GAAP earnings per share diluted share to $2.75 The 3rd quarter energy trading losses represented a negative impact of $1.03 per diluted share for the year, and our GAAP earnings per diluted share were $1.72 for 2020. The corresponding ROEs are 6% and 9.3% respectively. As it relates to the regulatory environment, we are keeping our focus on customer price impacts given the concerns around economic recovery in our service territory. We continue to evaluate our cost structure to ensure that we are providing safe, affordable and reliable service for our customers. Right now, we are evaluating our need to file a general rate case with the Oregon Public Utilities Commission for a 2022 test year. It is important that we continue to operate in a way that is cost efficient to keep prices low for our customers regardless of our outlook for a new general rate case. With respect to our future resource needs, we filed an update to our 2019 integrated resource plan last month. The action plan was previously acknowledged by the commission and remains unchanged as we continue to target 150 average megawatts of renewables to go online by the end of 2024 and secure up to 5 11 megawatts of capacity as indicated on Slide 7. We are planning to work with stakeholders to seek approval of our RFP and launch the process later this year, but we are continuing to consider customer and stakeholder interest as it relates to timing. Given recent updates to federal tax credits, we plan to issue an RFP for both renewables and our remaining capacity. We will bid a benchmark resource into this competitive process. On other regulatory proceedings, last October, the OPUC approved our deferral request for wildfire related expenses. As of December 31, 2020, we've deferred $15,000,000 related to wildfire response. We also applied for and received deferral treatment from the OPUC for certain COVID-nineteen expenses, principally bad debt expense. As of December 31, 2020, we've deferred $10,000,000 relating to COVID-nineteen. Earlier this week, we filed a deferral request for restoration costs associated with the severe winter events that Maria discussed and that we've recently experienced. Because of the magnitude and duration of the event, we are uncertain as to the cost associated with the full restoration service. We will continue to discuss the impact of this deferral on existing storm recovery mechanism with regulators and stakeholders. Turning to Slide 8. This shows our updated capital forecast through 2025. We are providing enhanced recovery here for our capital expenditures forecast. The majority of our investment in future years are concentrated in low risk, stable distribution infrastructure upgrades to improve safety and reliability of our system. Investments here are also intended to make us more efficient and help facilitate savings and improve reliability. The recent weeks and the wildfire impacts in 2020 demonstrate the importance of maintaining a safe and reliable grid. We added $200,000,000 to the outer years plan through 2025 and our capital plan now includes $2,900,000,000 over the next 5 years. As a reminder, these projections do not include any generation build investment that may arise from a renewable energy RFP. On Slide 9, we continue to maintain a solid balance sheet, including strong liquidity and investment grade ratings accompanied by a stable outlook. Based on our strong financial condition, we do not anticipate to issue equity in 2021. We expect to fund 2021 capital expenditures and long term debt maturities with cash from operations during 2021, which is expected to range from $600,000,000 to $650,000,000 the issuance of debt securities of up to $300,000,000 and the issuance of commercial paper as needed. After 2021, there are no maturities of long term debt until 2024. Turning to slide 10, we are initiating full year 2021 earnings guidance of $2.55 to $2.70 per diluted share. Our assumptions for this guidance range are on the slide. I'd like to dive deeper and walk through a few key drivers that we're confident will help us grow within the 4% to 6% range in 2021. Because of continued load trends we're currently seeing with residential customers and commercial customers that are slowly reopening, we expect to refund residential customers under the decoupling mechanism and will again hit the 2% cap on collections for non residential decoupling. We continue to recognize the challenges faced by our customers and we'll continue to make sustainable changes to our cost structure throughout the company. We've accelerated the use of technology throughout the business. And our 6% reduction in O and M year over year and about half is from lowering our IT costs and using technology to enable process improvements. But here are just a few examples. We have reduced and restructured our software license agreements as PGE continued to move to the cloud. We rolled out a new mapping software to our line crews and they are now using tablets for better access in the field. We're using new customer relationship management software to better improve our customer relationships. We continue to leverage our billing system to drive efficiencies while providing customers with increased functionality. I am confident we can continue to identify and implement efficiencies in 2021 as we continue to grow. We are also reaffirming long term earnings growth guidance of 4% to 6% off a 2019 base year. The drivers of our long term guidance are consistent with what we've previously discussed, including load growth from in migration and industrial customer expansion, operational efficiencies and potential investment opportunities in our system and renewable resources. With respect to dividends, our Board recently declared a dividend of $0.4075 per share, reflecting an annualized dividend of $1.63 per share. With this dividend, we completed our 14th consecutive year of dividend growth with the last 5 years at a compounded annual growth rate of 5.4%. And now operator, we're ready for your questions. Your first question comes from the line of Julien Dumoulin Smith from Bank of America. [SPEAKER JULIEN DUMOULIN SMITH:] Hey, good morning, Julien. Thanks for the time. [SPEAKER JULIEN DUMOULIN SMITH:] Hey, good morning, Julien. Thanks for the time. [SPEAKER JULIEN DUMOULIN SMITH:] Hey. So well done all around. Perhaps if we can just kick it off here. After adding in the additional CapEx, can you talk about where that puts you in this 4% to 6% long term range that we've talked about so much in the past? And then maybe what your thoughts are about equity financing given the higher CapEx and obviously considering the impact last year as well? Just curious on how you would frame that. Yes. Hi, Julian, it's Jim. So I would say to you that the CapEx here that we've laid out for you, which is an increase of a couple of $100,000,000 over the out years, and as I mentioned, dollars 2,900,000,000 altogether over this period of time, puts us really squarely in that range. I feel that that actually ensures that we actually stay in that range. With respect to equity, no equity is required for that this year. There's pretty good and strong cash flow production. And I don't see equity for a bit of time here, but let's take it 1 year at a time in terms of our forecast. Got it. And when you say squarely, you mean midpoint or you mean squarely as in above the low end? Sorry, not to mention, but you kind of said it a couple of times in different ways. Yes. I would say we're comfortably in that range. How about that? Excellent. I like the punchiness. Quick follow-up there, if you don't mind. And obviously, this could be drive some of the considerations here. How do you think about the timing of a rate case? You alluded to a 2022 test year in the commentary just now. But what does that mean in terms of timing of filing? And then related, is this driven by the outcome of the storm deferral? If you get that or not, would that dictate the precise timing here potentially? I would, no pun intended, decouple the storm restoration expenses and any deferral that might arise from it with the timing of the rate case. Secondly, we file our annual AUT in April. That's a fairly prescribed event. And so that's the first chunk of the filing right there. In terms of the general rate case, we're evaluating the timing right now, looking at our expenses, making sure we're efficient and actually taking stock of the local economy, customer bills and the like. This company is becoming a lot more efficient as we go. So we have a lot of flexibility here. It will be this year, but the actual timing hasn't been set yet. Got it. But it will be this year. Got it. Okay. Excellent. Thank you, guys. Best of luck. Congrats, Ken. Sure. Thank you, Julian. Your next question comes from the line of Inso Kim, Goldman Sachs. Good morning, Inso. Good morning, Maria. Congrats to Jim again. My first question is on the storms. I know you asked for the deferral, but just educate me a little bit. Currently, there is no automatic deferral mechanism or is there any threshold amount where you would book certain expenses before deferring anything like that? So thank you, Insoo. We have a we accrue for storms on a regular basis. This storm that we are seeing is a 1 in 40 year type of storm. The governor on Saturday declared a state of emergency and we are currently restoring customers at a rate that we have never seen in the history of our utility. We have had extensive damage throughout the entire system. Not unlike what we saw with the devastating wildfires and high winds events in early September, This is what we've thought of as an unprecedented event, but clearly these are unprecedented times. And we'll be working collaboratively with the commission we filed earlier this week and we'll work through how we handle all the expenses. And Insoo, I'll just tell you that coming into 2021, we have a storm deferral of $8,000,000 built at that point in time, so starting the New Year. Understood. And I guess going back to potentially the timing of the rate case, depending on how you see efficiencies this year that you could achieve maybe beyond what you see right now? As of this point, if you were to file more later in the years instead of towards the first half of the year and most of that rates won't go into impact won't go into effect in 2022. Do you still see that 4% to 6% range as likely even without a full year of a rate increase in 2022? I do. I wouldn't necessarily pick a time for filing, as I mentioned to Julian. We're still working on that. But I am extremely impressed with our achievement last year in reducing expenses by 6%. I called it a catalyst for other things. And so, I'd like to sit back here with the team and figure out how we could manage through that. Given the difficult economy, given the storms that we've had. We've got to take that into account. And given the pace of COVID recovery, right? So, I look at it as a balancing act, and I want to be very judicious, and I also want to be very have our customers squarely in mind here. But we're managing well. I think last year demonstrates that. Got it. It seems like the crazy 2020 seems to be extending through the first part of this year. So please stay warm and safe. Thank you. Your next question comes from the line of Sophie Karp from KeyBanc. Good morning. Hi, good morning. Good morning and thank you for taking my question. So I have two questions. First on the storm response costs, right? So what did you assume in the guidance range with respect to the outcome of the deferral here? Is that basically does it basically assume the full deferral? And could we see a guidance revision if that does not materialize? And kind of what is the timing of that? Hi, Sophie, it's Jim. We haven't built in any specific expense for the storm deferral in the guidance that you see. As I mentioned Insoo, we do have a storm deferral account already existing. And we just simply don't have an estimate of what the storm deferral accounts are. But right now, we're our guidance is independent of that. One of the things I think is really important to appreciate is the level of destruction from the ice that coated trees and power lines has resulted in damage that is truly unprecedented. And we have thousands of people working in the field today. They will continue working 20 fourseven until we get customers restored. But we are still learning more about the damage as we get into some of the more remote areas and see tremendous amount of trees out, power lines out. And many of the customers that we are now putting online are fairly are increasingly hard to reach either because of the amount of debris or because of their location. So we have still more to learn here. But right now, getting power back on to all of our customers is our highest priority. Great. Thank you. And following with this storm questions, I get it that this is a once in a 40 year event and maybe it doesn't make sense to harden the grid for events that come once every 40 years. But would there be an opportunity maybe at some point to do a postmortem of this and see if there's an opportunity for capital investments to mitigate potential impacts of similar events in the future? That's a great question. And it's something that community members or customers and many others leaders across the state are asking ourselves. Please know that after every significant event we do after action reports and root cause analysis and figure out how we could do better. After the significant wildfires and windstorms we had September, we made a number of adjustments, not only in our processes and procedures, our incident command response, our partnerships with first responders throughout our area, but also in terms of equipment standards and other tools and technologies and quite frankly just the kinds of repair and restoration we do. Over the last number of years we have been increasing our investments in our distribution system quite significantly and we have seen the results of those investments as part of the contributor to our lower O and M costs this year because we have had significantly less outages on average throughout the year, we've had less overtime, less truck rolls on Saturdays Sundays and overall better outcomes for customers. Sophie, if I can add, if you look at our CapEx projections, really, I want to leave you with the point that these projections are really all about making us more reliable and efficient. So invest capital to make us more efficient down the line. Secondly, I've been through a lot of storm recovery efforts, and I know you've observed them over the years with utilities. There is always some capital that comes back into the system in the restoration process. We don't know what the restoration expense will be. Therefore, I can't provide any more clarity on what the capital versus O and M would be. But there's always a mixture as you'd appreciate. Right. Thank you. That's helpful. And lastly, I guess you mentioned that your capital plan does not include potential upside from renewable RFPs. Is there a way to frame kind of the range of outcomes of these RFPs and the potential impact on your CapEx plans at this point? Or is it just too early to say? Impossible to handicap at this point and choose. I mean these will be competitive efforts. We'll bid a benchmark resource. I think we've been successful in the past with some of our efforts. I was very pleased to see the way we prosecuted Wheatridge. So while there's been as they say in the investment community, past success is no guarantee of future results. So we don't exactly know how that will come out. So we'll just have to wait and see. Thank you. Super helpful. I appreciate your answers. Sure. Your next question comes from the line of Brian Russo from Sidoti. Good morning, Brian. Hi, good morning. Most of my questions have been asked and answered. But I'm just curious with the recent storms and where water supply levels or snowpack is as we approach the upcoming hydro season maybe at the Clackamas or Deschutes etcetera? That's a great question. We have had great snowpack levels in comparison to prior years. They're significantly above normal. The big issue that we have in addition to snowpack levels driving hydro conditions is the runoff rate. And what we've seen is runoff has tended to be earlier than it has been in the past and that has changed some of our profile. Also know that as we get these really cold periods, we tend to have much less wind generation. And so we are seeing less wind than we saw last year on our system so far in 2021. Oh, I see. So the forecast is for above normal temperatures, which would create an earlier than normal runoff? Excuse me, the forecast is for above normal snowpack levels. Okay. And the question is when does it run off because that's how that will determine the impact on the company. Understood. Great. And then in terms of the dividend policy, it looks like the announcement you just made, dividend remained flat. I think historically, it was the April timeframe where the Board considers increases, although you delayed it last year due to the COVID pandemic. Should we expect the April time period for an increase in the dividend evaluation by the Board? Yes, Brian, thanks. It's Jim. So you're right. So just to make it crystal clear, this was the final capper dividend of 2020, and the Board traditionally does look at that in the April timeframe. And I would expect them to do that then, yes. Okay, great. Thank you very much. Sure. Your next question comes from the line of Travis Miller from Morningstar. Good morning, Travis. Hi, thank you. You just answered my question on the dividend, so I'll skip that one. But other one was just generically speaking, with the storms that you have experienced and obviously the storms are making headlines in Texas and other places in the U. S. What do you think and what have you seen impact on renewables? Are they performing well? Do you think there'd be any policy changes coming out of discussion across the entire U. S. In terms of cold weather? What are your thoughts along those lines? Sure. This is something that obviously people are talking about. Renewable generation remains very strong in the Pacific Northwest. I think you see across the West as a result of the wildfires, there was not a reduction in interest in expanding renewable generation across the West. Even with the significant wildfires, there actually was an interest in accelerating the pace of renewable transformation in the energy sector. My sense is that this may accelerate where we were going. We are clearly investing a lot in technologies, bidirectional grid capabilities. Much of the equipment that we're putting in place handling some of these additional renewables also adds to more resiliency and reliability of the underlying system and allows us to restore faster during regular storms and catastrophic storms like we have now. Okay. Have you had any of the cold weather issues or the icing such that we're seeing in Texas? Or are there I guess the other way of thinking about that, are your renewables and the renewables up there designed differently? I'm thinking particularly wind so that you wouldn't have those issues that they're having in Texas? Yes. So most of our wind generation takes place in the eastern part of our state, Eastern Washington and then even farther east than that. They have regular and ongoing cold winters and we design our system to be able to withstand a fair amount of ice on the wind side. In our service territory, we have seen unprecedented levels of ice that have caused significant damage to the distribution system. But yes, because normal cold weather is normal for our wind facilities, we have built them differently than they have in Texas. Okay, great. That's really helpful. Thank you very much. Thank you. Your next question comes from the line of Andrew Levi from Head Edge. Hey, guys. How are you? Good, Andy. I guess the first question I have is just on this Green Future Impact program that you guys are doing. Is that the same program that you've talked about in the past, Maria, that you've been kind of growing? Yes, Andy, it is. This is an opportunity for us to deliver 100% green energy to those customers that want to move further, faster than regular RPS standards. They tend to be municipalities, large tech and digital companies and it's very that a very successful program. And where are you at as far as like your run rate? Because it seems like you just signed a deal as well, but like earnings wise, I know you do there is a margin that you capture. Is there a run rate that you can kind of give us on how much you're making on this? That's a good question. I would probably not want to give you a runway. It's been chunky. For example, our last announcement with Intel was significantly higher volume than we had announced previously. But we do earn a margin on this that reflects the risk and the integration and other costs for these programs as well as give recognition to the company's role. So that's we will continue. It's been very beneficial and I would expect to do more. Is it like ongoing earnings? Because you said chunky or is it like a one time type of No, it would be ongoing. It would be ongoing, Andy. Okay. Okay. And so this is a line of business that clearly is going to grow. Obviously, it's part of your forecast. Is it significant enough where at some point that it kind of goes in the direction that you anticipated to go that it could end up being broken out? Or is it more kind of proprietary reasons and things like that that you don't feel comfortable sharing it? So I think we're going to keep the information as part of our regular disclosure. It's not big enough that it would be broken out by any SEC standards of any sort. I'm not so sure I'd call it proprietary. Really, it's about meeting customer needs with the green energy that they want. Andy, I'll add a couple of quick points. Number 1, I think it has a lot of growth opportunities as customers such as Intel and others increasingly require renewable energy for their own ESG goals, number 1. Number 2, I would say that these are negotiated transactions, right? You have an IPP in this case of OnGrid and you have a consumer and anchor tenant on the other side with Intel plus 16 or 17 other commercial customers. So, these are prices, rates and development costs that are confidential, frankly. So I don't think you're going to see that transparency because they're negotiated transactions. Oftentimes, there'll be competitive bidding associated with this too to make sure that we deliver to those customers like Intel the best available price we can from the market. Okay. And then my second question is kind of more of like a bigger picture question. So looking at whether it's this opportunity, which is big, but we're not sure what the earnings are, So how big it turns into as far as earnings per share? The potential IRP or IRPs you're going to have out there, you just raised you have $665,000,000 of CapEx this year, if I'm not mistaken, and potential to raise in the outer years. And a very good balance sheet despite what happened last summer. And also, I'll throw in one more thing, tremendous amount of T and D opportunities absent the storm. And then you have this 4% to 6% growth rate. Again, I'm not pushing you for this year, of course, because obviously we want to see you make your numbers this year because of what happened last year. But longer term, what are kind of the aspirations? Obviously, you have to weigh customer rates. The rates are not high, but you obviously have to weigh those. But do you guys see a runway longer term where and again, I'll say one more thing that you just kind of implemented a growth rate, which was a big thing for you off of base. But do you see opportunities longer term or are there aspirations longer term, which would be beneficial to both the shareholders and the state and the customers for the growth rate because of the way that the God, this is getting long. The way the service territory is transforming that the growth rate could go higher. Andy, I think I got all of that. Yes, sorry. There's a lot of good stuff. What can I say? Yes. No, no. There's a lot of opportunity here at this company to become more efficient, to afford more CapEx and resiliency to benefit customers in the market. As you know, we have one of the most unlevered balance sheets pound for pound in the industry. We have one of the best cash flow producers in the industry pound for pound. This sets us up with a tool to be able to move in the direction that you're talking about. If we could manage our O and M expenses to offset the additional capital. We have plenty of capital to deploy in the future years, especially in the grid and even putting aside anything that we might competitively win in the RFP. Those investments are off the chart here on Page 8, right? These are sustainability investments that will make us more reliable and efficient. I'm personally convinced that these kinds of investments are going to improve our operating costs. So, one follows the other. They're not detached from each other. So that's the goal, right? But we've got to do the balancing that you so I think well articulated. And so I think there's opportunity here down the line. Okay. Thank you guys and good luck cleaning up after the storm. Thanks, Sandy. Thank you. Your line is open. Operator, it looks like we may be finished with the questions. Okay. And I will turn the call back over to Maria Pope for closing remarks. Thank you very much for joining us today. We look forward to further following up with questions as well as virtual investor conferences coming up in the Q1. We'll be announcing our Q1 results at the end of April. And thank you very much for your time today and interest in the company. Thank you. This concludes today's conference. You may now disconnect.