Good afternoon. My name is Pema, and I will be your conference operator today. At this time, I would like to welcome everyone to the Southern Company 4th Quarter 2020 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
1 followed by the 4 on your telephone. As a reminder, today's conference is being recorded Thursday, February 18, 20 21. I would now like to turn the call over to Mr. Scott Gammel, Investor Relations Director. Please go ahead, sir.
Everyone. Thank you, Puma. Good afternoon, and welcome to Southern Company's year end 2020 earnings call. Joining me today are Tom Fanning, Chairman, President and Chief Executive Officer of Southern Company and Drew Evans, Chief Financial Officer. Let me remind you, we'll be making forward looking statements today a question and answer session.
Various important factors could cause actual results to differ materially from those indicated in the forward looking statements, everyone, including those discussed in our Form 10 ks and subsequent filings. In addition, we will present non GAAP financial information on this call. Reconciliations to the applicable GAAP measures are included in the financial information we released this morning as well as the slides for this conference call, our Investor Relations website at investor. Southerncompany.com.
At this time, I'll turn the call over to Tom Feining. Everyone. Good afternoon and thank you all for joining us. As you can see from the materials we released this morning, we reported strong adjusted earnings per share for 2020 that exceeded our guidance range. In addition, we have a solid outlook for our Q1 results in 2020 and importantly, we are raising our projected long term earnings per share growth rate.
Before we turn to more on our year end business update, I'd like to share some thoughts on 2020. In 2020, we essentially saw the 4 pandemics, health, economic, social and political. Southern Company demonstrated excellence and resilience on every front, including the call to the operator to begin the call to
be moderating the health and safety
of our workforce and communities overcoming decreased electric demand while delivering both strong financial and superior operating results and continuing to address racial injustice and working with policymakers everyone to advance a cleaner energy future. First, the health pandemic. The COVID-nineteen pandemic was of course the first and the primary challenge that we faced last year and one that continues to impact our communities today. From developing a pandemic a sponsor reentry playbook that was ultimately leveraged by many peer companies to standing up a medical village the company's attention to the company's attention to the company's attention to the company's attention to the company's attention to the employees as a top priority. So by taking care of our workforce, we were able to continue taking care of our customers.
The economic pandemic. Beginning in March April of last year, the world has experienced significant economic duress. Southern Company originally
the call to questions. We have a question and answer session.
Thank you, Steve. Thank you, Steve. Thank you, Steve. Thank you, Steve. Thank you, Steve.
Thank you, Steve. Thank you, Steve. Thank you, Steve. Thank you, Steve. Thank you, Steve.
Thank you, Steve. Thank you, Steve.
Thank you, Steve.
Thank you, Steve.
Good morning, Steve. Good morning, Steve. A few questions. Through thoughtful, disciplined O and M reductions, we were able to mitigate the estimated now $300,000,000 revenue loss that we have experience while still providing reliability and industry leading customer satisfaction to our customers, as well our long term efforts with the states that we serve on economic development efforts continue, helping capital investment and job growth in the communities we're privileged to Herb, the social pandemic. I am also proud of our ongoing commitment to foster racial justice.
Our investors for years this has been an effort of Southern's to focus on building a healthy culture. Even before the unrest last summer. We initiated an effort to donate $50,000,000 to Historically Black Colleges and Universities. Our Q1 results. Last summer, I told you that meaningful discussions were underway across our company related to our actions and response.
And while these our conference call. Conversations will continue and initial outcome is that we have refocused our efforts towards a more holistic goal of diversity, equity and inclusion, ensuring that all groups are welcomed, well represented, engaged and fairly treated throughout the organization. As an example of this commitment, the Southern Company Foundation recently announced a partnership with Apple, where each our investors and our investors are investing $25,000,000 to launch the PROPEL Center, a new digital learning hub, our business incubator and global innovation headquarters located in Atlanta for students throughout the nation a member of the Board of Directors and Universities. And finally, the political pandemic. I also want to address the political discord that our nation has experienced over the past several months.
At Southern, We have consistently prioritized working with policymakers regardless of political party, and we have been working constructively our speakers to the Board of Directors. In fact, we have already engaged in matters related to energy policy, especially the transition to a net zero carbon future, as well as on matters related to national security. You'll see in the appendix a letter I sent to President-elect Biden, pledging our support. As we continue to engage with the new administration as well as legislators and regulators at both federal and state levels. Our positions will continue to focus on energy policies a few questions that can enable a smart transition and be informed by our key objectives of providing clean, safe, reliable and affordable energy to our customers.
So let's now turn to an update our Chief Executive Officer on Plant Vogtle Units 34. We remain focused on meeting the November 2021 November 2020 2 regulatory approved in service dates for Units 34, respectively. With the start of high functional testing expected in only a few weeks, our next question. We now expect a November completion for Unit 3. For Unit 4, we continue to utilize an aggressive site work plan as a the team to provide margin to the regulatory approved November 2022 in service date.
Unit 4's current site work plan targets a 3rd the Q1 2022 in service date. From a cost perspective, Georgia Power's share of the total project capital cost forecast the company's financial results increased by $176,000,000 largely reflecting estimated COVID-nineteen impacts and other costs, along with a replenishment of contingency to fund future expected risks that will include lower productivity rates and increased support our call. As a result, Georgia Power recorded an after tax charge of $131,000,000 during the Q4. 2020 marked another year of significant progress at the site. Throughout the year, as some other major projects around the country were shutting down the operator to the operator to discuss the progress we made in the quarter.
During the quarter, during the
quarter, we had a very strong quarter.
During the quarter, we had a strong quarter of the year.
During the quarter, we had a strong quarter of the year, we had a strong quarter of the year. We had a strong quarter of the year. We had a strong quarter of the year, and we had a strong quarter
of our employees to be in the position of the company's employees. We are also progressing, while prioritizing the safety of our workforce and the surrounding community. Similar to what was experienced across much of the United the United States during the last 2 months of the year and earlier this year, we saw a surge in COVID-nineteen cases at the Vogtle site, Since the onset of the pandemic and most acutely during the Q4 of 2020, the impacts from COVID-nineteen have included the high absenteeism and disruptions to planned or ongoing work as we isolated personnel. We estimate the pandemic has extended the schedule for both units by approximately 3 to 4 months, consuming much of the remaining margin to the November our Q1 and service date for Unit 3 and several months of margin for Unit 4. Unit 3 direct construction is now approximately 98% complete and hot functional testing is expected to a few questions.
On our last call, we identified 3 key risk factors to our timeline: electrical productivity, the company's executive performance and what we call paper closure. Recall paper closure relates to the the turnover of systems to the testing group to help ensure that the as built condition of the plant meets design specifications. Over the past few months, COVID-nineteen has hurt site productivity, negatively impacted electrical production and impaired our ability to close paper issues that facilitate timely system turnovers and ultimately, iTAC submittals. The combination of these factors has delayed system turnovers and impacted our timeline for the start of hot functional testing. Our operator to our operator.
Based on our recent production trends, we now expect to start hot functional testing during the second half of March and start loading fuel during July. Starting hot functional testing and fuel load on this timeline would support a November 2021 in service date with up to 1 month of flexibility remaining in the schedule. Now certainly risks remain to this schedule. Our Q1 results. These risks may be thought of in 4 segments.
First, the completion of system turnovers leading up to hot functional testing. 2nd, the successful completion of hot functional testing 3rd, the completion of system turnovers leading to fuel load functional testing this spring would significantly decrease the remaining operational risk to Unit 3 completion, although certainly ITAC submittal and review is expected to continue to accelerate and will remain an area of focus. To date, 180 ITAC have been submitted to the NRC. We expect approximately 20 additional ITAC to be submitted by the the start of hot functional testing and the remaining 200 to be submitted during hot functional testing and as we approach our Q1 results. Direct construction for Unit 4 is now over 75% complete.
Last month, We started integrated flush and we expect initial energization to occur during March. To support the November benchmark, We will need to average construction completion of approximately 1.5% per month, Which is in line with the average rate achieved during the period from last November through January. As we progress in 2021, construction production is expected to increase in support of our upcoming our Q1 results. And importantly, as Unit 3 nears hot functional testing, we expect to shift additional resources to Unit 4 to increase our current pace of construction completion. Our call over to Mr.
President. Now turning to costs. During the Q4, Georgia Power allocated its remaining contingency plus an additional $5,000,000 and subsequently added new contingency of approximately $171,000,000 to support completion of the project. We estimate the pandemic has extended the schedule for both units by approximately 3 to 4 months at an estimated cost the company to Georgia Power of between $150,000,000 $190,000,000 This cost is embedded in our updated total project cost estimate. While COVID-nineteen related impacts were significant drivers of the change of our capital cost forecast, future risks, including construction productivity were our contributing factors.
Earlier this week, the Georgia Public Service Commission unanimously approved VCM23, which included project capital costs our Board of Directors through June 30, 2020. As a part of the order, Georgia Power was directed to work with the PSC staff our Board of Directors to develop a mutually agreeable recommendation to the commission by the end of March regarding the process, timing and substance of filings the call to questions related to the transition of Unit 3 costs into base rates. Additionally, Georgia Power files VCM-twenty 4 our call today. The months ahead represent a critical and exciting time for Vogtle. The project team has worked tirelessly amid conditions none of us could have imagined just a year ago.
Our employees, contractors, co owners and community partners should be commended for their perseverance and dedication to the completion of this important project. Drew, I'll turn it over to you now for an update of the financials and our outlook. Thanks, Tom, and good afternoon, everyone. I hope you are all our operator to the operator
to take questions. As Tom mentioned, we had a very strong year in 2020 despite the many challenges we faced. Our Q1 results. For the full year, our adjusted earnings per share was $3.25 $0.14 higher than last year and $0.03 above the top of our guidance range. 2020 was certainly defined by milder weather and sales impacts due to COVID-nineteen, and we were able to substantially overcome both our Q1 results.
Looking at
the details, retail electric sales on a weather normalized basis were down by
the call over $0.14 year over year,
including impacts related to COVID-nineteen offset by customer growth. Milder temperatures throughout 2020 resulted in additional $0.21 negative earnings per share variance as compared to the prior year. We substantially mitigated both weather and COVID-nineteen impacts through thoughtful, disciplined O and M reductions, as well as continued investment at our state regulated utilities. On a combined basis, these factors allowed us to exceed our adjusted EPS guidance for the year. A detailed reconciliation of our reported and adjusted results as compared to 2019 is included in today's release and earnings package.
COVID-nineteen impacts reduced our projected weather normal kilowatt hour sales by 3% for the year. The slight uplift from the residential sector persisted throughout 2020 with more people working from home. In the 4th quarter, We continue to see improvement in kilowatt hour sales for both the commercial and industrial customer classes. However, we do not believe we have seen a full recovery in these sectors yet. Factoring in impacts across all customer classes, our non fuel revenues declined by approximately $300,000,000 the team response was and continues to be supporting our customers.
We have worked closely with customers across our regulated utilities, our offering special payment plans for those with past due account balances and have delayed disconnects. You can see the impact of our COVID-nineteen our team related protocols for disconnects in our customer counts for the year. Last year, our state regulated utilities added just over 53,000 new residential electric customers and nearly 30,000 residential natural gas customers. Our electric customer growth was approximately 30% higher than our expectations. Overall, we estimate that about 80% of the residential electric customer growth in 2020 was due to continued and accelerating in migration to the region, particularly in Georgia.
The remainder is likely related to the steps we have taken to keep customers connected during the pandemic, particularly through the use of extended payment plans. During this time, customer arrears the company's efforts to have tended better than we anticipated across our operating companies. We also have constructive mechanisms approved by the commissions in many of our states, Allowing us to address incremental COVID-nineteen related costs, including bad debt expense, those will be considered in future regulatory proceedings. In a trend that differentiates our service territory, the pandemic has strengthened population and job growth in the Southeast, particularly in Georgia, which is one of the fastest growing states in the United States. Robust economic development in the Southeast region is also a positive indicator that key states are weathering the pandemic relatively well.
In 2020, we saw new investment of nearly $6,000,000,000 nearly 25 1,000 jobs created across Georgia and Alabama. In fact, Georgia was the number 2 state in the country for job creation in December. And just last week, Microsoft confirmed Atlanta as a major East Coast hub, which is expected to bring significant job growth and investment. Our state regulated operating companies play an integral role in leading economic development efforts in each of their states. Turning now to our expectation for 2021, our guidance range for the year is $3.25 to $3.35 per share.
In the Q1 of 2021, we expect we estimate that we will earn $0.84 per share. Included in our full year guidance is an assumption that we will see modest impacts continue to see modest impacts on retail sales from COVID-nineteen, which we expect to continue to mitigate through thoughtful cost control. Additionally, we expect total retail sales growth normalized for any short term COVID-nineteen impacts to be flat to 1%. For the foreseeable future, this expected growth rate is driven by a combination of customer growth and ongoing improvements in energy efficiency. Moving now to our outlook for long term growth, we our long term EPS growth rate in the 5% to 7% range, consistent with adjusted earnings in a range of $4 to $4.30 per share by our Q4.
With 90% of total projected earnings over the 5 year plan horizon coming from our state regulated utilities, our expected EPS trajectory has a solid foundation. Likewise, our history of constructive regulation, Stable credit metrics and ongoing focus on cost control serve to underscore the achievability of our plan. Looking more closely at our long term capital investment plan, we continue to allocate 95% of our capital investment to our state regulated utilities. Our capital investment plan of $40,000,000,000 for 2021 through 2025 includes annual projected rate base growth our state regulated utilities of greater than 5%, with a continued emphasis on transmission, transportation and distribution modernization and resilience. For Southern Power, the cumulative 5 year investment plan is comprised entirely of previously approved renewables projects and maintenance capital for the existing generation fleet, which is over 90% contracted for the next 10 years.
Any incremental growth opportunities at Southern Power are expected to enhance the long term financial plan and be largely self funded and credit neutral. Importantly, this CapEx projection for the whole company does not include amounts for accelerated fleet transition and any associated transmission growth, Nor does it account for new generation projects at Southern Power. We will be evaluating a number of paths over the next few years as it relates to fleet transition, But we do not establish placeholders in our plan with virtually all projects being known in the process of or having already been engineered our
Q1 results or have already begun.
Taking a look at the balance sheet, we currently forecast no equity needs over our 5 year plan horizon, our Q1 results even when considering the potential increase in capital investment I just described. We believe we are well positioned to further strengthen our balance sheet and to improve our credit metrics the operator
to discuss the Q1 of 2019.
I'll highlight that in January, we became the 1st large cap utility in the U. S. To publish a sustainable financing the framework and in the days that followed Southern Power issued a 5 year green bond under that framework that resulted in a record low coupon rate. This framework highlights Southern's ongoing commitment to a wide range of sustainability and social issues and should allow us to leverage our work in these areas to help optimize our balance sheet and benefit our customers. We will also continue our focus on societal priorities in the upcoming years.
Before I turn it back to Tom, I'd like to echo his opening remarks. The resilience of our business has demonstrated Amid the pandemic is a testament to the hard work our employees put forth every each and every day. The ability of our employees to continually provide outstanding service to our customers, combined with the support of our communities and the constructive relationships we maintain with regulators and public officials, underpin our ability to also deliver such solid performance. I would like to particularly thank the people who work for and on behalf of the customer our customers to meet our priorities, our call to questions. Even in light of a global pandemic, we are all grateful.
Thank you. Tom, I'll turn it back over
to you. Thanks, Drew. I'd like to circle back to your comments on fleet transition. Southern has 2 primary goals related to our greenhouse gas emissions. The first is to achieve net zero emissions by 2,050.
We will work constructively with the Biden administration to accelerate this the next question and answer session. The second one is to put in place an interim milestone to achieve a 50% reduction in greenhouse gases by 2,030. Regarding the intermediate goal, we achieved our 2,030 goal in 2020 with the preliminary greenhouse gas emissions now down 52%. Certainly, 2020 was an unusual year and we may see the market conditions reductions move around 50% for the next 2 years, but we believe we'll be sustainably above a 50% reduction level our Q1 results by 2023. While ESG issues have received increasing attention by investors over the past few years, At Southern Company, these issues have consistently received the heightened attention they deserve and it's being recognized.
We were once again ranked as one of the world's most admired companies by Fortune Magazine. DiversityInc. Rated us as a top company for ESG and for the the Q1 of 2019. We've received a perfect Corporate Equality Index Score by the Human Rights Campaign. In addition, we're very proud of the A- rating we recently received from the Carbon Disclosure Project our environmental transparency and leadership.
We recognize the value our investors and stakeholders a place on transparency and we are committed to continued enhancements. And before closing, I want to just and take a moment to recognize our leadership transition announcement that we made at the end of last year. My trusted friend and one of my closest Mark Landrip, plans to retire in April after dedicating 40 years to Southern Company. Mark has now positioned the company as a leader that is building and shaping the future of energy. We are grateful for the many contributions Mark has made to our business and we'll miss him dearly and wish him
all the
best. Mark is passing the baton to Chris Kaminski, who has been a valued member of the Southern Company leadership team for many years holding key positions at both Georgia Power and Southern Power. In closing, Over the past decade that I have been privileged to serve as CEO of Southern Company, I can think of no other year that I've been prouder of the way we've conducted ourselves and manage our business. Our engagement with and empathy for our employees, customers and communities in 2020 demonstrates our enduring commitment to be a citizen wherever we serve. Thank you for joining us this afternoon.
Operator, we are now ready to take questions.
Thank you, sir. We'll now begin the question and answer session. You to hear a 3 tone prompt to acknowledge your request. Followed by the 3. Our first question comes from the line of Julien Dumoulin Smith with Bank of America.
Please proceed. Julien, how are you?
Hey, good morning. Hey, buddy. Hey, thanks for the time. Congrats, guys. You bet.
So maybe just to Kick things off on a light basis. 5 to 7, how are you thinking about the base year? You guys gave the 4 to 4.30 a number, but you talk about what's the baseline year for that? And then if I can throw it in there at the same time, that 5% to 7%, how are you thinking about upside CapEx, perhaps some of the spending opportunities that exist in a, shall we
say, post global world as you
think about this transition. How does that fit against the numbers you guys gave today.
Yes, man. You bet. Hey, we did it a little bit differently this year. The way you should think about the base year is kind of a 2024 number, there's $4 to $4.30 and then kind of reverse engineer back from that at the kind of top end of that range at a growth rate of 7% and the bottom end of that range at kind of 5%. That's how we come up with a 5% to 7%.
Certainly, as we move from 2021 to 20 There is a step change, but I think you can see the math from there. With respect to that range, it's fascinating. As Drew pointed out, And I've said this before on other calls, the way we do CapEx forecasting, in my opinion, is really conservative. What we put out there, I know some companies, I shouldn't say this, but perhaps some companies use CapEx forecast to plug to a growth rate. We do almost the opposite.
We only put in our CapEx forecast what we know or what we firmly expect. And we do not put in placeholders. So what is absent in that CapEx forecast is capital allocated to future projects at Southern Power. You know that we and allocate on current practice about $500,000,000 a year to that business unit, but none of that is showing up in the CapEx Certainly, as you look at fleet transitions that I think from a policy standpoint are being pushed In Washington, you will see growth in renewables and it wouldn't surprise me that there will be plenty of opportunities to do more solar and wind in the future. Right now, we think those markets are very tough.
So we elect not to put anything in the forecast. Secondly, We don't include any fleet transition. I think it's been very clear and I've been in the press here recently talking about the transition of the fleet and working with the Biden team to think about how to move net 0 2,050 our call to something sooner. I know President Biden now would like to put out a marker of net 0 by 2,035 for this industry. We certainly I think we can certainly achieve that.
There are certain policy choices will have to be made along the way. But we are engaged constructively in that the conversation. If you go to something like that, I think you will accelerate fleet transition. Again, more renewables or more gas assets in this timeframe. Drew, what else would you add?
I think the only thing I'd supplement Maybe Julian is, but if you kind of look at our historical performance, go back as far as 2018, we've been clearly growing the rate base and growing earnings in sort of the 4% to 7% range historically. We've had some changes in that pathway a little bit because we've taken penalty for Vogtle construction. We'll see a little bit of that But what we're really trying to express is a longer term potential for the business as we invest capital into it. And I think the other important The point that Tom made is that we have quite a bit of generation modernization to do that we have not yet Quantified, because I think there are a number of ways that could play out. If you think about broadly What that looks like, we've got about 10 gigawatts of coal fired facilities in aggregate.
We'll have to find some method of meeting the reliability requirements of our customer base without relying on coal as a primary source of megawatt hour production. And so I think we'll over the next couple of years, we'll take stock of emerging technology, different things that work within our system to meet the goals that we have and we'll kind of lay those out for you as they reveal themselves to us.
Hey, one other point, Drew is and I didn't mention this one. I'll bet you there's at least another $1,000,000,000 of transmission. So when we talk about transitioning the fleet, it isn't just choices in generation, which we think we'll have. We do believe that there will be additional transmission associated with this transition I see that easy to achieve over this 5 year period. One last thing, and I'm not often doing this, but complementing the analyst community.
You guys have done the math. If you back out this penalty period, we have been earning about 6% EPS Once you exit that period and so that actually creates a nice line going into the future. Julian, anything I didn't cover you wanted?
Well, hey, listen, so let me clarify that if I can, right? When does some of this CapEx The transition or the generation, you guys have this 4% rate base trajectory through 25. It seems like that already translates to the 5% to 7%. When you actually get this CapEx Uplift. It sounds like that drives you higher within that 5% to 7% range as I'm hearing you, right?
Yes, we did.
Yes. So you know and you all know that we never try to get ahead of our regulatory processes and each of our states us to follow their own version of an integrated resource plan. And so as we file those plans and file whether it's RFE in Alabama Emma or the 3 year rate case at Georgia or TEP in Mississippi that We'll make those plans known and approved by the commissions as appropriate. The other thing you should know is that heading into this call, I guess we showed 4% for electric. It was 5% probably a week ago.
It's rounding, okay? So it's in the middle of 4% to 5%. The gas business is growing at like 10%. So the overall kind of supports And you're right, when you think about starting with $4 to $4.30 There is upside to a mid range forecast there based on how we deploy capital over time. But I think even with the base forecast that we're showing you today, we're within that range and we're comfortable at 5% to 7% within that range in 24%.
Yes, absolutely. Great. Thank you for clarifying that all. Best of luck, guys. Talk soon.
Thank you so much. Appreciate you calling in.
Thank you. And up next, we have a question from the line of Steve Fleishman with Wolfe Research. Please go ahead, sir.
Hey, Steve. How are you?
Thank you.
Hey, Tom. Good afternoon. So just a question. If you end up determining that you cannot meet the November deadline for Volvo for some reason, Could you remind us like do you have to what do you have to do with anything then? Do you have to like make a filing or is it just you just kind of just update the schedule.
That's right. We'll just update the schedule and certainly, I think we're pretty good about letting people know when things change. We did the the press release with the express intention of moving off of what we had thought, I guess, back in October may have been July HFT. As this 3rd wave of COVID hit, it really did just knock us for a loop in terms of productivity And pushed us now and actually the numbers continue to move just a wee bit, but it puts us from February now into March. No, it really just has a function of cost, Steve, and it really depends on when you incur the costs.
Okay. So if it is a delay that causes us to get into hot functional test, the amount of both units in Georgia Power dollars is about $40,000,000 If it's item I mean Unit 3 only, it's about $25,000,000 If however we shift and it is a delay kind of from fuel load to in service. In other words, it's some punch list that causes us to have a delay in the in service declaration of a unit. It It goes way down for both units, it's $25,000,000 a month. For Unit 3, it's only $10,000,000 a month.
So depending on when the delay occurs, there would just be an additional cost that we're factoring in. And I will say the operator to discuss the company's new estimate on estimated cost to complete this $176,000,000 we've added this time. That is like 1.8. It includes a construction per month a number of questions that are available on the call.
Thank you, operator.
Thank you, operator. Thank you, operator. Thank you, operator. Thank you, operator. Thank you, operator.
Thank you, operator. Thank you, operator. Thank you, operator. Thank you, operator. Thank you, operator.
Thank you, operator.
Thank you, operator. But we wanted to put out what we thought was a thoughtful and kind of reasonably conservative estimate, so we wouldn't have to come back
I think the only thing mechanically that occurs is that we continue to function under a penalty ROE until we bring the unit into service. And so That would
be the material thing to model. That's right. You start losing that penalty rate once you declare it.
Okay. So because I know for a long time we've had November as this like regulatory approved deadline. If there's a new deadline or whatever, you don't need to kind of go back and seek a new deadline or anything like that? You just No. No.
And go for VCMs as is.
Yes, sir. There's nothing special. The VCM process we've been filing has been really effective at They're kind of handling those issues. And as you guys know, you follow those VCM filings very clearly. That's kind of the way we would handle it.
Okay. And then one other just quick vocal question. I I think there's a new or there's going to be a new chair of the NRC. Does that matter at all for you in terms of your timing process? I doubt They're too much in the weeds of everything, but
Oh, no. I would argue, hey, look, Steve Kosinski and I visit with each of the NRC commissioners regularly. And we're very happy We were very happy with Christine Savinicki. My sense is Chris Hansen will, I think, Ron and NRC consistent with the principles of Sibinike. Hansen has experience in a variety of fronts in Congress with Doctor.
Ernie Moniz, who is on our Board. We know him well and we think he will be terrific. Yes. The NRC is a very tough regulator, but we think they're very fair and they've been very constructive in their treatment of VOGO-three and 4.
Great. Thanks so
much. Thanks, Steve.
Thank you. And our next question comes Michael Weinstein with Credit Suisse. Please go ahead, sir.
Hey, Michael. Glad to have you with us.
Yes, glad to be here. So the just to follow-up on Julian's question. So the 4% rate based growth
a follow-up for electric.
And if I look at that overall, I'm just thinking Once you get to the 2024 range and the penalties are out, right? The penalty removing the penalties is the main driver of 5% to 7%, I'm guessing, Yes.
Michael, excuse me, those penalties will expire as we move to in service for each of the units. They expire by degree. So in effect, once we declare Unit 3 In service and then Unit 4 in service, we actually have a step change in growth that we're really not saying a whole lot about the 5% to 7% is what we think we can sustain and have sustained over recent history without this a step change in the Vogtle uplift moving into rate base.
Okay. I mean, because I was thinking that the 5% to 7% is simply sustained By increasing the CapEx profile and increasing the rate base growth profile once both
It is a sustainable growth rate beyond the uplift from Vogtle.
It sounds like it's actually any yes, I'm thinking any increase in renewable CapEx or decarbonization CapEx actually improves on
Mike, we're pretty focused on the durability of spend, I think is the way we think about it. And so trying to extend a 5% to 7% range as long If you sort of draw the line between what we've laid out today as our earnings expectation for 2021 and then take a look at our projection for 2024. You can see that sort of falls without outside of the range that we've intimated at 5 We think about really as being more of a longer term sustainable growth rate in absence of single large project risk.
Yes. And then the way you should think about is almost a reverse engineer. Start with what we're thinking about is a reasonable range with this CapEx forecast for 2024 and then reverse engineer backwards using 5% to 7% growth rate. We think that's the right way to think about this.
It looks like most of the increase or almost a third of the increase in CapEx in this new plan is at Southern Power, that's this year. And is that just a function of you just not wanting to put placeholders in there, so each year you'll simply
No. In fact, I'd say in particular to Southern Power, it was more that we had earmarked capital in 2020 that was committed, but not yet in place. We'll actually deploy that capital in 2021, which increases the expenditure, but if you look at it over a longer period of time, a 3 year or 5 year average, very close to the $500,000,000 that your mark in that position.
Yes. So I mean, let me just say it enough. Were we to spend the dollars that we allocate in our minds to Southern Power. That's an additional $2,500,000,000 to the CapEx forecast that doesn't show up in this forecast.
Yes, that's right.
And you
can hear your heading.
Yes. And like I said before, there's probably an additional 1,000,000,000 I mean who knows on transmission. And then whatever happens on fleet transition, there's something else there. Yes. I think what we've given you is kind of a bare bones approach, which we think is appropriate.
And then that supports the 5% to And
what we represent for Southern Power in particular at $1,300,000,000 are committed projects that we will execute on within this calendar year or represent maintenance of those facilities over
time. Now, I mean, you mentioned that the increase to the extension of tax credits and The promotion of renewable power by the administration going forward could present more opportunities for Southern Power. In the past, you've been a little more, I guess, more cautious on it, saying that returns have been tight, you've been pulling back on spending at Southern Power. Are you reversing that stance now? Are you thinking, oh, is it maybe more opportunity, not less going forward?
No. In fact, I thought I put those words in there. The returns have been, the terms and conditions have The duration of the contract has been shorter. And so all I'm saying is and that's really the reason why we don't include capital commitment the Southern Power in our forecast. We think it's a very tough market.
Now, I was only postulating that With an administration that is really bullish on pushing more renewables that the markets may get a little looser, but they're certainly not now.
Got you. Okay. Thank you.
Yes, sir. Thank you.
Thank you. And our next question comes from the line of Angie Storozynski with Seaport Global. Please go ahead.
Hello, Angie. How are you?
Great. How are you guys?
Hey, Scott. So I have
2 questions. One, obviously, about all. So we're all waiting for hot functional testing to start. We have some concerns if if it's going to uncover any sort of catastrophic flaw of the project. I mean, is there anything you guys have learned about Unit 3 that would make you feel more comfortable with how hot functional testing is going to go?
Yes. Angie, knock on wood and don't show overconfidence or what have you. The Chinese the plants that went through high functional tests went through it pretty well without any incident. We have every reason to believe that will be our I just can't predict the future. That's all.
Okay. There's nothing that I know
of that would cause me concern right now. And hey, and Angie, the other thing is that we've done all these partial system tests along the way. And I think we've even surprised ourselves how well those have gone.
Okay. And something completely unrelated. Given what's been happening in Texas, and I understand it's a completely different design of the power market that we're about to have this debate about what types of plants our need of the system in order to maintain a reliable electric service. And again, lots of differences between your service territory and ERCOT. But in light of what has happened, is it changing your perspective of what types of power plants your utilities should have?
You talked about some generation replacement. How does, again, the last week play into this planning?
Yes. Let me offer up a few comments. I was on CNBC this morning and it was a great topic of interest and discussion about what about Texas. And it really gets into this idea of organized markets versus integrated regulated markets. You know I've been a a plan of integrated regulated markets.
Through our integrated resource plans, we can effectively begin with optimal capacity portfolios and iterate around transmission that supports those optimal portfolios. We can also build in resilience requirements and socialize those costs over a large the customer base. And we've been able to do that for decades and it has worked exceedingly well. A real criticism of the so called organized markets is that they are set up and I think the people inside those markets quite rationally that they either operate within punitive constraints or profit incentives that are broadly and every market is different as you know, but they're broadly designed around maximizing short run marginal properties. So minimizing short run marginal costs, that's no way to build a portfolio.
And I would argue that the I'm sorry, not transition, like backup generation, like resiliency, like other things. You get to really complex kind of approaches in a market. I think PGM has been wrestling with how to value all those things. I guess, the second thing is that You really don't get a sense of valuing long term baseload capacity as it should be. And I think we've seen that in the markets where for heaven's sake very valuable nuclear generation is getting priced out of the market and those valuable assets, especially as we consider a carbon reduced future, are getting priced out of the market and getting turned down.
I think there's better approaches here. And so it was interesting, not only did I have this conversation a question and answer session. This morning, and I guess I'll just be a little abstruse about this, but I was called by the Biden administration. From a national security standpoint, what can we do as an industry to avoid these things? Unfortunately, given the market structure of ERCOT, there's probably not a lot we can do in the near term.
But I think long term, This notion of resilience versus reliability. Reliability is how we handle the vagaries of weather economic load and machine reliability under kind of known conditions. Resilience is the idea of our Q and A. These are things we must do as an industry, and I think Southern is in a good position to help lead that dialogue.
Awesome. Thank you.
You bet.
Thank you. Continuing on, our next question comes from the line of Andrew Weisel with Scotiabank. Please go
ahead. Hello, Andrew. Thanks for joining us.
Hey, good afternoon. Question, you talked quite a bit about the updating the decarbonization strategy. I guess my question more specifically to Georgia is given the political changes, it's now a pretty solid blue state, as Saturday Night Live made a funny sketch about. Does that change your thinking at all about how the pace and the methods at which you plan to reduce your carbon footprint in Georgia coming into the IRP.
We don't try to evaluate long term strategies based on the current politics of any a more elected official or what have you. We have, I think, a very solid long term plan. Now, I think the broader the kind of issue that we'll be dealing with is how fast do we want to get to net 0 and how will we do that? How will we evaluate the relative merits of just trading out one form of generation for another. How will we help fund and push Shalon, research and development, energy innovation as solutions that will make this transition hopefully easier and more efficient in the years ahead.
CNBC also did a segment just before mine Bill Gates. He and I are on the American Energy Innovation Council and we're working on several ideas, whether they are storage based, hydrogen based, 4th generation nuclear based or even energy efficiency based. We're letting energy innovation work for us And maybe joining into a reimagined partnership with government to make that happen is I think a very wise energy policy to follow. And like I say, we're already engaged with the Biden administration on some of those concepts and I look forward to their ideas as they
Advance. Okay. I guess maybe a different way to ask a similar question is you're very you're ahead of schedule as far as your interim carbon emission reduction goal for 2,030. Do you see ShunDee to accelerate the net zero target from 2,050 currently.
Sure. I think it really is a matter though of working with our local jurisdictions in each of the states to do that in a wise manner. So we'll be doing that.
Okay, great. And one unrelated question on dividends. The growth has obviously been fairly modest at $0.08 or about 3% per year. I recognize the high current payout ratio, but you talked about the Vogtle penalties going away in 12 24 months, then the 5% to 7% earnings growth thereafter. What's your current thinking on the outlook for dividend growth once we're past the Vogtle construction?
So of course, that's a decision of the Board, and we'll make obviously recommendations to the Board. But you guys can do the math as well as we do, and I'm Certainly, as we grow into this long term earnings guidance that we've put before you, one of the choices that I think the people that follow me will be able to make very easily will be whether to take the dividend payout ratio down perhaps below 70% or whether to increase the rate of growth of dividends per share. That is certainly a strategic option on the table, but we'll Carry that with the Board at the right time.
Yes. No, I'd just say, Andrew, we've been incredibly protective of our creditworthiness. We're very focused on ratings and conversations with the rating agencies related to Vogtle Construction in particular, And we think it's most prudent to hold dividend growth at a modest level until we come out from under the large scale construction that we're performing down in Augusta. Once we get through Bogle and headline risk is behind us and our credit metrics start to strengthen into categories we think are more at home with how we've operated in the past. We'll start take a look at what dividend policy would be and we'll also really start to hone in on what our target credit rating might be.
Southern has operated And in periods where our credit was a little bit stronger than where we stand today. And so all these things are going to be considerations as we go forward.
And consistent with what Drew just said, we typically say it on every call, we didn't say it yet. One of the other outcomes of kind of this reset and moving to these higher rate, Not just earnings per share, growth improvement, cash flow improvement is pretty significant, over $800,000,000 in increased cash flow per year. That's right.
Terrific. Thank you very much.
Thank you.
Thank you. Our next question comes from the line of Jeremy Tonet with JPMorgan. Please go ahead, sir.
Hey, Jeremy. How are you? Hey, good. Thanks for having me. Good afternoon.
Good afternoon. I just want to reach out to the 2024 guidance as you laid out there. I'm thinking about Georgia Power ROE and recovery of Vogtle overspend. Just if you could paint any kind of blood strokes What assumptions might be baked in on those two items into your guidance there? We're always I think reasonably cautious relatively conservative on our guidance.
And the only thing I would just say is that for the system, It is a reasonable estimate of what we expect to earn across the system. We're not pushing numbers in order to hit those ranges. Got it. That's helpful. And then maybe just one on 2021 itself guidance there.
It implies kind of a smaller step up year over year. And are there any meaningful drivers to Is this outside of Vogtle ROE penalty?
No, I would say that the Vogtle ROE penalty is the single largest a driver that depresses earnings in 2021, almost $0.24 a share related to our constructions there, Very consistent with the agreement that was reached with the commission a couple of years ago.
Very helpful. That's it for me. Thanks.
You bet. Thank you. Thank you. And we now have a question from the line of Michael Lapides with Goldman Sachs. Please go ahead.
Hey, Michael. How are you?
I'm well. Thank you for taking my question. There's been some interesting dynamics at the FERC with some of the utilities having made filings regarding having the FERC review potentially a grid operator like structure in the Southeast. Can you just give your views on where you think that's going? What do you think the point is?
What do you think the consensus is? You talked a little bit about the difference between regulated markets and kind of the merchant power the markets and it just made me think of having seen a little bit of those filings and trying to understand
kind of where the long term goal is.
The long term goal is for us to not break what's working. And so When you look at these markets down here, we've been able to provide for clean, safe, reliable power for decades for our customers' benefit. And The data just overwhelmingly supports that. When you look at the so called organized markets, I I think there's a certain amount of chaos in those markets where I think originally people with great goodwill thought they would I don't think the risk return that we see in those markets benefits customers Edal. You know recently we've submitted we think even an improvement to our own wholesale markets that is the SEAM the company's efforts, which frankly is a model that allows us to benefit renewables, particularly solar, in a more efficient way and it broadens the market to bring in people like Duke and TVA and others.
And so we've broadened the market. I think we've made it more attractive to renewables because we believe that renewables are going to be really important as we transition the fleet. We'll continue to seek ways to improve our markets over time, but they're working well. I can't believe anybody would find the wisdom to throw that out right now.
Got it. Thank you, Tom. Much appreciated.
Yes, sir. Thank
you. Thank you. We now have a question from the line of Paul Fremont with Mizuho Securities. Please go ahead.
Hello, Kyle. Great to hear from you.
Great talking with you. My first question is a pretty technical Austin. For Southern Power, are the targeted investments inclusive of tax equity or does that represent your share of what you are planning on spending?
I would say that today this represents our share, but as we evaluate all of these projects and as they go into commercial operation, we've Looked at a number of alternatives or ways to optimize the returns that we received there. This 1.3
And I think the big chunk of that is a wind deal. There is a little bit of a storage deal. The wind deal, we kind of like. It's got the 10 year profile. Where we did a lot of the tax equity, I guess, was on the solar.
We had the big 1 year and we didn't particularly like the impact of all that in our
financials. Yes, Southern Power is an interesting animal. I would say that rather than us trying to define an amount of capital that we're interested in deploying there, Projects tend to draw capital from the parent when they can meet certain criteria. Many of the things that we found over the last couple of years have been largely in the solar I'm sorry, in the wind arena because we're able to find better contract terms, better contract counterparties And construction risk is generally handled by others. And we've been pretty fortunate, I think, the last couple of years.
This particular plan includes a couple of identified wind transactions and as Tom said, 2 battery transactions in the California marketplace We're building a tenant to our own solar and that'll give us a tremendous amount of experience in attaching storage to Solar that will look at deploying across the balance of fleet and in other locations.
Great. And then my second question, if I go back to the staff testimony, I think what they were suggesting back in the fall was that you guys or hoping to get all of your ITAC remaining ITAC approval done by March, which would have been like over 2 everybody. But now when we get to mid March, which is the start date of your hot functional testing, there'll still be about 200 that you need to get in hand based on the number that you provided today.
That's right.
What gets
you to sort of accelerate the level of ITAC approvals to such a high extent to allow you to load fuel in July.
You bet. And thank you Paul for shining light on that important issue. We believe that the ultimate filing of I tax, we've accomplished a lot with the NRC, frankly, over the life of this project and we've shrunk down, what was it, about 875 or something down to about 4 and a And we've adopted the practice of the UINs that is we've filed the form and substance the FDA approval of an ITAC and have that approved. So really all we have to do now is essentially fill in the blanks as to the result of a test. As a result, by working with the NRC in this constructive way, I think once we get the systems in place To submit the results in the ITAAC, I think the ITAAC process is going to go really well.
Like I say, the NRC has been great in this regard. And recall, we got NRC personnel all over the plant working with us to make sure all this happened. Paul, the issue was not I Max. The issue is getting the systems done, getting the turnover appropriate with the testing appropriate and the paper, our call center, as we pointed out before appropriate, so that we can file in put in the values in these IATAX and submit them. So I said this I think on the last call and I made a big deal about it.
When I say paper, that almost feels too glib. This idea of having engineers present. This would be Bechtel, our own, the NRC that will evaluate the as built condition of the plant and harmonizing that to the design basis of the plant and making sure it exactly meets our a question and answer session. It's really taking a lot of time and it is a complex exercise. The most important thing we can do is assure that we have quality.
That will permit the ITAK process to go well. Frankly, it will permit the testing processes that we will do now HFT So the filing of ITAC is simply associated with system turnover of these important processes within the plan.
Mr. Fremont, do you have any further questions?
No, thank you. Thank you, sir. Thanks for joining us.
Thank you, sir. And now we have a question from the line of Andrew Levi with HITE Hedge. Please go ahead, sir.
Andrew, how are you doing?
I'm all right. I think most of my questions were answered. I was thinking as this is his call, you'll probably get vulnerable for them before Funny how things happen. So, seriously though, I I think I understand everything that you're saying as far as the potential renewable spend and the transmission and possibly distribution around that. Just on far as the timeline, so I guess at some point this year, Hopefully sooner rather than later we hear from the Biden administration on kind of what their plan is as far as their energy plan.
And then probably I guess November hopefully knock on wood, Vogtle 3 goes into operation. At that point, I guess, is that when you'll kind of have a better idea of how much incremental CapEx is going to be. And I guess kind of just kind of getting back at the envelope and some conversations I had with you guys. I'm thinking it probably could add 200 basis points to the electric utility rate base growth longer term from the 4% to the 6%. Again, I don't want to put numbers I'm not comfortable talking about kind of like a timeline and thinking that I have as far as finding out and
Well, I'll tell you my friend, here's Let me give you a couple of ways to think about it. Number 1, the key is going to be these IRPs that where we do this integrated resource planning, no kidding. And So as we submit those and have those approved ultimately with each of our states, we have a very good idea as to how the CapEx forecast will change, Whether fleet transition occurs, to what degree, what about transmission, the whole bit, that will be very illuminating. In advance of those important regulatory processes, we already have an ELG kind of requirement put out our coal unit. And so some of those units are already on the thin economic margin as you add new requirements to them.
I think that may cause us to accelerate that conversation with our commission. But rest assured, you guys you know exceedingly well. I think you and I were laughing with each other not long ago. I think you and I go back maybe 30 years in talking about our dogma and dealing with state regulation. We will not get in front of the regulators in the regulatory processes with you or anyone else.
We're going to let those things play out and then we'll reflect that in our plans as it shows up.
Yes. Andy, I would just add that This is a complex topic and I'll just start by saying ELG Affluent Limitation Guidelines, unlikely to use an acronym on the call, Which will regulate sort of mercury and selenium and a couple of other things that come out of our facilities and we'll have to make some choices about how we Whether or not we control those facilities, put them into limited use or ultimately retire those facilities. The one thing that is certain is that if you look at The technology that's available to us today, it's not a simple substitution of what we currently generate with to what the future might look like. There are certain changes in material science that need to occur. There are certain complexities related to clean, safe and reliable power that have to be met.
There are transmission considerations that have to be taken into account. But if you wanted to put a big Rob Boe or wrap around it. If we have to do 10 gigawatts and let's say that 7 of that is replacement or that 3 needs to be held in the operator to the operator to provide a question and answer session. You could think about numerically what the replacement of something like that amount of generation would require and make the assumption that we probably have to do 15% or 20% of that total CapEx in addition in transmission or distribution. So there are ways to kind of come around come to what's the size of this ultimately I think for the company.
And so let
me give you a head start. Everybody's like, what are you going I would argue you have kind of this. I'm giving you a caveman math now. So looking at that forecast, I'll bet you, I kind of gave a few numbers already. If you were to fill out our $500,000,000 per year, there's $2,500,000,000 Add another $1,000,000,000 for transmission.
And then on top of that, put in some estimate, probably back end loaded on generation And it's easy to see that I think you could get to, don't hold me to this and we're not forecasting this way. But added to the CapEx forecast $5,000,000,000 to $8,000,000,000 over this timeframe. I don't think that's unreasonable. And you can do the math on what that does to your growth rates. That's easy stuff to do.
Okay. Yes, I can add subtract, multiply and divide.
No, you're a genius. I love this stuff.
Thank you very much, guys.
You're the best. Thank you.
Thank you. And now we have a question from the line of Paul Patterson with Glenrock Associates. Please proceed, sir.
Hey, Paul. Thanks for being with us.
Hey, good to be here. So just on the COVID impact on Vogtle. It looks like you guys have taken into account not just your current experience, but what you expect in the future. And I see what you guys give us good data on how infection rates have been trending. I'm just wondering what is your expectation going forward about the impact of COVID on Construction of Vogtle.
I mean, I apologize if I missed this, but are your people getting vaccinated? Are there essential workers? It varies from state to state it seems. So I was just wondering, so what Yes.
Sure, Budd. So, you know, I help lead the ESDC, Electricity Subsector Coordinating Council for this industry. And, you know, it the call to the operator and went to physical national security matters. It has grown into storm response and now COVID. Facility workers.
And you've got to be proud of this industry through this crazy hurricane season we had last year. We were able to adopt kind of cutting edge COVID protocols and get the lights back on, the wires up and the plants running again. So we've done a good job. I would argue that these guys, particularly the people that work hard to keep the lights on and our hearts go out to them and thank them for their hard work They should be treated as critical resources for this the FDA and therefore get a very high priority to receive vaccination. It is Joe, At the end of the day, despite what the CDC will recommend, it is the option of each state to deploy those vaccines.
Now we've got great relations in each state, particularly in Georgia where Vogtle is, there's been a lot of discussion and how to make sure that the folks that can get the vaccines are it's available to the folks at the site. I'm going to guess that they may be able to get vaccines maybe within a month or so. But that's highly uncertain and then depends upon the ultimate deployment within the state.
Okay. And then just sort of on COVID-nineteen, I'm just as you know, there have been some papers and stuff out there indicating that perhaps the long term economic impact It could be pretty substantial. When you talk about your plans and just plug that to utilities in general, one doesn't really tend to think that that your growth or whatever would be impacted by that or whether there have to be some big deviation if in fact the economy does change As a result of COVID-nineteen or what have you, is that pretty much a is that just roughly speaking sort of the way to sort of think about this?
Hey, Paul, let's Drew and I tag team this one. Let me go first and I'll shut up and let you go. But here's what I see. From my past work to the Fed, I love to break the industrial segment particularly as a great leading indicator into 10 big segments for Southern. And then not only do I look at period versus period results, virtually all of it is still negative compared to a year ago, obviously pre COVID, but the momentum statistics are really illuminating now and they have turned positive.
So of the 10 segments that make up something like 80% of our industrial sales, 8 of them from a momentum standpoint are turning positive. So that tells me and with a quote that has been put out there by me In the past, America is learning to live with COVID. A, I think COVID incidences are starting to decline. Maybe that's the normal sine wave we see from any surge, which we just went through. And maybe it's the longer term effect of getting more people vaccinated.
Didn't the Biden administration say recently they want everybody vaccinated by July or sometime this summer? So surely that will have an impact. But the economic data I see would show a recovery, I don't know, down 3% last year, maybe up 2% to 3% this year With industrial starting to respond in a favorable manner.
Yes, I always worry about the long term implications of something like this because The pressure that we put on folks on the margin or the COVID puts on folks on the margin will reveal itself. We've been sort of 60 days away from COVID ending for now 10 months, and so it'll be interesting to see where we come out. Our expectation around how it would impact our particular customers actually was quite different than what we expected on the onset. So, we expected that retail customer usage would increase as people stayed home. We actually expected industrial production would maintain itself would decline a little bit, but not quite commercial customers found a way to do business in a different way, not all, but most.
And industrial Went through a period where there was sort of a reduction in output as because inventories were at a reasonable level and they could sort of pare down that inventory as they the call to questions. We've now seen sort of a tightening in supply in a number of the industrial segments and production has started to Pickup and there have always been 2 or 3 standout weak segments in any particular 2 or 3 month period. But as Tom said, today, the momentum is generally positive and we're encouraged by the fact that people have adapted their businesses to Earn profits in a way that they maybe hadn't anticipated 2 years ago, but yes, I always or a year ago, I always Worried that the longer anything goes, the more pressure you're going to put
on somebody on the margin for sure. And quick punchy stats, non farm employment fell Nationally, 6.2%. In the Southeast, it was only 1.7%. Last year, in our territory. We had record job creation, best we've ever done.
We're seeing an increase. I want to say the increase in the results projected in our economic development group that we're showing that's kind of our headlights, up 17%. And then you see events like Microsoft coming in developing Atlanta as their 3rd hub, their other hubs being, of course, Seattle and San Francisco, Silicon Valley. Look, I'm not going to paint a super rosy picture, but I will say the Southeast is really resilient. What's down right now?
Chemicals are down mostly. We see that as driven by a large outage in particularly a few questions on plant in Alabama and some global demand for chemical, which might change the marginal economics of a single facility for sure. And what kind of looks Right. It looks like pipeline, especially as we start seeing gas continue to displace coal, the pipes are doing pretty well.
And that will conclude today's question and answer session. Sir, are there any closing remarks?
Well, thank you. These are exciting times and I know the folks around our system that made the system perform as well as it did in 2020, just a great debt of gratitude. And I want to comment specifically our the recovered workers, particularly IBEW and the folks from the broad building trades all around the system, particularly at Plant Vogel 34, the leadership of the IBEW, the leadership of the building trades. They are terrific business partners us and we could not have achieved this level of success without their great leadership and the great work of the folks that are members there. I really like the cards we have.
I like the fact that we have a lot of optionality no matter what the future Mr. Holtz and I think we've run this business over the past decade to leave it stronger than ever. We'll get through Vogtle 3 and Look forward to the progress there. We'll get through Vogtle 4 next year and we're off and running. Thanks everybody for your attention today and we'll talk to you soon.
That's all.
Thank you, sir. Ladies and gentlemen, this concludes the Southern any 4th Quarter 2020 Earnings Call. You may now disconnect. Thank you all once again. Have a great day.