Entergy Louisiana, LLC Q1 FY2023 Earnings Call

Good morning. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to Entergy's First Quarter 2023 Earnings Conference Call. I would now like to turn the call over to Bill Abler, Vice President of Investor Relations for Entergy Corporation.

Good morning, and thank you for joining us. We'll begin today with comments from Entergy's Chairman and CEO, Drew Marsh; and then Kimberly Fontan, our CFO, will review results. In an effort to accommodate everyone who has questions, we request that each person ask no more than 2 questions. In today's call, management will make certain forward-looking statements. Actual results could differ materially from these forward-looking statements due to a number of factors, which are set forth in our earnings release, our slide presentation and our SEC filings. Entergy does not assume any obligation to update these forward-looking statements. Management will also discuss non-GAAP financial information. Reconciliations to the applicable GAAP measures are included in today's press release and slide presentation, both of which can be found on the Investor Relations section of our website. And now I will turn the call over to Drew.

Thank you, Bill, and good morning, everyone. We had a very productive start to the year with meaningful progress on activities that support our near- and long-term objectives. Today, we are reporting first quarter adjusted earnings per share of $1.14. Mild weather affected these results, but we are prepared for this variability. As we have shown over the last several years, our FLEX program helped us achieve very predictable results. We are on track for 2023 results in line with our guidance, and we remain well positioned to achieve our long-term 6% to 8% growth outlooks. Our focus on creating sustainable value for our 4 key stakeholders: customers, employees, communities, and owners is the foundation of our strategy. It's at the center of everything we do. Recently, JUST Capital and CNBC named Entergy to the JUST 100 list, which highlights companies that are doing the right thing for all their stakeholders. We are honored because our inclusion on this list is an acknowledgment that we are living up to our commitments. Serving all our stakeholders starts with understanding what our customers need from us. To meet those needs, we are investing to improve reliability and resilience and significantly expand our clean energy footprint. This will not only help our current customers become more successful but will also attract new customers. So far this year, we have installed or replaced over 400 transmission structures with new resilient designs, including critical river crossing lines. We also completed transmission interconnections for 2 new Entergy-owned renewable resources. One example of a transmission project that will improve resilience and reliability is a recently completed project in Southwest Louisiana, where we upgraded transmission lines rated to withstand 150-mile per hour winds, replaced older poles with resilient steel structures, installed new higher-capacity power lines, and added automated switching capability to improve reliability. In Southeast Louisiana and in Texas, we are building new substations and distribution power lines that will support residential and business growth in those areas and reduce stress on existing substations. In addition, we installed and replaced more than 5,000 wood distribution poles with newer, more resilient designs. Collectively, our team continues to focus on operational excellence to deliver stakeholder outcomes across all facets of our business. We also continue to be a critical local partner, supporting strong economic development, working to bring new businesses, new jobs, and new tax base to the communities we serve. As you know, we expect significant industrial sales growth over the next several years. While the broader market is contemplating recession concerns, our region's growth story remains intact. Key strategic value drivers continue to be supportive. The LNG, ammonia, and refining sectors are generally short on supply, and the deficit will likely not be meaningfully affected by a recession. Other sectors, such as ethylene, PVC, methanol, and steel, may see some market pullback, but the Gulf Coast has the lowest-cost producers, so plants in our service area should be the last to be curtailed. Meanwhile, the passage of the IRA is accelerating development in the clean energy transition space. We are seeing very strong interest in our service area, which has the potential to increase and extend our 6% long-term industrial sales growth rate as incentive rules are finalized and turned into financed projects. One example of a potential project fueled by the IRA is the St. Charles Clean Fuels project, which is exploring whether to build a $4.6 billion blue ammonia production plant in St. Rose, Louisiana. The new facility would produce up to 8,000 metric tons per day of blue ammonia and would rely on carbon capture technology to sequester more than 90% of its carbon dioxide emissions. Our underlying 6% industrial growth rate does not rely on these IRA tailwinds, and we continue to see a lot of activity in the traditional industrial segments we serve. There are some noteworthy developments in recent months, including Golden Triangle Polymers, which held its groundbreaking for a state-of-the-art polyethylene plant in Orange County, Texas. In addition, Sempra announced that the company reached its financial investment decision and issued the final notice to proceed on Phase 1 of its Port Arthur LNG project. A big part of meeting our customer sustainability needs is growing our clean energy footprint, and we continue to make progress on that objective. On Monday, we held our official groundbreaking for the Orange County Advanced Power Station in Texas, hosting Governor Abbott, 4 of the 5 PUCT Commissioners, and other state and local officials. That facility will ensure that we have modern and reliable infrastructure to support existing customers and the rapidly growing customer base in our Southeast Texas region. We will utilize turbine technology and a plant layout that can support dual fuel capability with hydrogen in the future. The optionality helps ensure the plant's long-term viability and creates improved energy security and operational flexibility for our customers. We also continue to make progress on our objective to expand our renewables capacity to meet customer needs. Since our last call, Entergy Arkansas and Entergy Louisiana concluded evaluations of their 2022 renewable RFPs. Participation was robust, and we are in negotiations for approximately 2,300 megawatts. Turning to affordability. It remains a core tenet in our pursuit of greater sustainability and reliability for customers. To help manage bill effects of customer-centric investments, we continue to aggressively pursue customer sales growth, disciplined cost management, and federal support to offset costs. Natural gas prices have come down significantly, and coupled with a mild winter, that's further good news for customer bills. Our latest estimates for residential bill trajectories, including updated gas have improved. For the system, we are now seeing a 3-year annual growth rate of less than 1% from 2022 through 2025. That's roughly half the level we were expecting a few months ago. In the quarter, we made meaningful regulatory progress against our objectives. Entergy Texas has reached settlement on all material issues with parties in its base rate case, and we expect to file the settlement with the PUCT in the next few weeks. Entergy Mississippi filed its annual formula rate plan in March. Mississippi's efficient mechanism supports continued customer-centric investments and supports our financial outlook. Interim rates became effective on April 1. Entergy Louisiana's formula rate plan will expire after this year's filing. We are evaluating options to renew the current FRP, and we're also preparing for a potential rate case filing, which would be submitted this summer. As we've laid out, Entergy Louisiana is investing significant capital to support our customers' growth and their demands for greater resilience and clean energy. This growth is critical for Louisiana and its local communities. We need to ensure that our rate constructs provide the opportunity for fair and timely recovery, which will allow us to effectively source the capital while maintaining utility credits. Either an FRP renewal or rate case path should allow enough time for rates to be effective in September 2024, which would keep us on our normal cadence. If we file a rate case, we will request a new FRP starting with the 2025 filing year. Entergy Louisiana also filed a request to streamline the procurement and approval processes for up to 3 gigawatts of solar resources. This is in addition to the nearly 2.5 gigawatts from previous or ongoing RFPs. If the new processes are approved, we can bring additional renewables to construction faster and at a lower cost and risk, materially improving our ability to meet our customers' accelerating demands for clean energy. For our accelerated resilience and grid hardening filings, Entergy Louisiana received a procedural schedule in its docket. Next up is the commission's engineering report and testimony to be filed in August. Hearings are scheduled in January of next year. However, there is the potential to receive a decision this year through a settlement with parties, and that remains a possibility with broad stakeholder alignment on the need for more resilient investments. In a separate but important docket, the LPSC Staff outlined a process and an evaluation procedure for utilities in Louisiana to follow, which creates a solid road map for Entergy Louisiana's resilience investment. Entergy New Orleans filed its updated resilience plan with the City Council. The $1 billion 10-year plan reflects significant stakeholder input. Like Louisiana, New Orleans is requesting approval for the first 5 years of the program, and we are targeting a decision from the council by year-end. In Texas, the Electric Infrastructure Resiliency Act has been proposed in both the State House and Senate. The bill, if passed, would require the commission to act within 180 days of utilities filing a resiliency plan. Certain prudently incurred costs would be recovered through a variety of mechanisms. We will continue to work with our regulators across all aspects of our business to create value for our customers and other key stakeholders. And you can find additional details on our regulatory proceedings in the appendix of our webcast presentation. In March, our service area experienced tornadoes in Arkansas and Mississippi. The damage to our system included distribution poles, wire spans, transformers, and one substation. We replaced damaged equipment with newer, more resilient assets rated to our latest standards. The restoration was completed quickly and safely with zero injuries. For that, I am extremely grateful to our teams. In addition to restoration, we responded quickly to provide community support. Entergy shareholders committed $150,000 to the American Red Cross to provide shelter, food, water, mental health counseling, and other services to the households impacted by the tornadoes. In addition, more than 150 Entergy employees came into the affected region and volunteered their time by assisting with cleanup, providing meals, organizing supply drives, and staffing information booths to once again prove our employees' unfaltering commitment to our customers and communities when they need it most. Before concluding, I would like to note that Entergy Mississippi is celebrating its 100th anniversary. That's a century of serving its customers and communities. To commemorate this milestone, Entergy Mississippi donated $100,000 to Extra Table, a Mississippi-based food bank, to combat food insecurity in Mississippi. That's $1,000 for every year of operations. In addition, Entergy volunteers packed 2,500 meal kits. This is the first event of a multiphase program that will ultimately provide 100,000 meals. Giving back to communities through philanthropy, volunteerism, and advocacy is integral to Entergy's living its vision statement of 'We Power Life.' We've had a productive start to 2023. We are focused on successfully delivering value for our key stakeholders, and we will continue to successfully achieve the milestones that keep us on track to deliver steady, predictable earnings and dividend growth. To do this, we are working to improve operational and regulatory outcomes, support our customers' industrial growth and economic development in our region, invest in renewables, clean energy, and resilient acceleration to support our customers' demand, and execute with financial discipline to strengthen our balance sheet and become more competitive. I'll now turn the call over to Kimberly, who will review our financial results for the quarter.

Thank you, Drew. Good morning, everyone. Our first quarter adjusted earnings per share was $1.14. Results included very mild weather, which reduced earnings by an estimated $0.22. We incorporate conservative assumptions into our planning process and have a portfolio of FLEX levers to mitigate the impacts. The fundamentals of our utility growth remain strong. And despite the first quarter weather, we remain squarely on track to achieve our financial objectives for 2023. Before I review quarterly results, I'd like to highlight a couple of items. First, this quarter's results included the effects of storm securitization at Entergy Louisiana, including $76 million of benefits for customers. These items were considered adjustments and are excluded from adjusted earnings. Additional details are provided in our earnings release. Second, beginning in 2023, as a result of the successful exit from the merchant nuclear business, EWC is no longer a reporting segment, and any remaining financial activity from that business is now included in Parent & Other. You'll see the first quarter variances laid out on Slide 4. The quarter results reflected the effects of investments that are benefiting our customers. This includes regulatory actions as well as depreciation expense, other taxes, and interest expense. Excluding weather, retail sales were higher, driven by industrial sales growth of 2%. That growth came largely from new and expansion customers, particularly in the primary metals and petrochemicals industries. This was partially offset by lower sales to Cogent customers as Cogent sales were particularly strong in 2022. Slides 5 and 6 show key metrics for our largest industrial segments. As Drew mentioned, these metrics remain very supportive and are consistent with the growth that we are seeing. They also give us confidence in our industrial sales growth outlook. Moving to Slide 7. Operating cash flow for the quarter was $960 million, $422 million higher than last year. Higher utility customer receipts, lower noncapital storm spending, and lower pension contributions were the largest drivers. The effects of the EWC wind down provided a partial offset. Credit and liquidity are summarized on Slide 8. During the quarter, Entergy Louisiana received $1.5 billion from storm securitization. This completes our securitization. Entergy Louisiana plans to reduce long-term debt as issuances mature. We have made significant progress on collecting deferred fuel balances, which came down more than $400 million in the quarter. This continues to improve our credit metrics. Our net liquidity remained strong at $5.7 billion, including $406 million of storm escrows. Looking at Slide 9, our equity needs are unchanged. Only $130 million remains through 2024, and we plan to use the ATM program to meet this need. As shown on Slide 10, we are affirming our guidance and longer-term adjusted EPS outlook. Weather has been a headwind to start the year, but we've also had a few tailwinds to our plan. Our first quarter sales mix resulted in slightly higher margins, and we see some favorability in several items that, in aggregate, are providing meaningful relief. After taking all of this into consideration, we are flexing O&M by $0.10, which keeps us comfortably in our guidance range. The bottom line is that we have a solid plan with good visibility, and we will continue to execute on the deliverables to achieve steady, predictable growth. And now the Entergy team is available to answer questions.

Our first question comes from Shahriar Pourreza with Guggenheim Partners.

So just real quick on financing. You guys obviously have a CapEx plan through '25, but financing is still based on a '24 plan. When do you sort of anticipate rolling that forward? And what can we anticipate in terms of capital allocation, especially in light of the current capital market conditions? Is asset optimization still an option you guys are kind of looking at?

Thank you, Shahriar, for that question. Regarding our capital plan, we have $16 billion allocated from 2023 to 2025, with some funding remaining for 2024. The last time we discussed 2025 was during Analyst Day, where we provided figures for both 2025 and 2026. I expect that as we progress into 2024, we will examine that financing in more detail. Concerning your question about asset optimization, we currently don't have any updates. However, we will consider pursuing options that meet our three fundamental criteria: Is it executable? Does it serve as a distraction? And does it create value? If an opportunity aligns with those criteria, we will certainly explore it.

Got it. And then just on some of your recent solar RFPs and kind of announcement. How is that, I guess, kind of tracking versus your plan for up to 13 gigs and what portion of the new solar is being sort of deployed to support retirement versus new load? And just that initial ownership share versus PPA has always been kind of skewed to contracts? Do you anticipate that's going to change over time?

Yes, Shahriar, this is Drew. We recognize that our current situation is not where we want to be, and we are making significant efforts to enhance our self-build capabilities and utilize our economies of scale. We aim to improve financial discipline in the packages we assemble for those RFP processes so that we can make advancements. We believe this improvement is achievable. However, you're right that we have not been meeting our targets, which is concerning because it affects our balance sheet and restricts our operational and strategic flexibility in the long term. Therefore, we are committed to reaching that goal and are actively working towards it.

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

I had two questions, both on sort of the resiliency filings. Maybe first part of that question, can you just give us any initial stakeholder feedback that you may have gotten in Louisiana and New Orleans, the 2 filings that you've made? And second, Drew, in your prepared remarks, you mentioned about this separate docket in Louisiana. Maybe a little bit more color there. Do you have to kind of use that docket for securing the approval in Louisiana? Or just maybe any other color there?

It's Rod. Thanks for the question. Louisiana, in terms of stakeholder feedback, I think part of the answer is in the question that you asked. The fact that the staff submitted proposed rule-making around resiliency filings for all utilities in Louisiana, we view as reflective of a constructive stakeholder engagement strategy for the company over the course of the last 6 to 9 months in Louisiana. Because the proposed rule-making actually puts us in a position to be very much aligned given the strategy that we laid out for the commission, both in Louisiana and in New Orleans. And so the feedback has been constructive. So our expectation is, as you think about the procedural schedule that Louisiana laid out, they're backcasting from a January 2024 hearing date. Their procedural schedule backs up from that date to give us an opportunity to perhaps settle with stakeholders to accelerate agreement around the Louisiana decision-making on resiliency. So we view that as a net positive. New Orleans tracks Louisiana in that, we have clarity from the City Council on our initial proposal, which was $1.5 billion through that stakeholder engagement process. We narrowed down the grouping of projects to about $1 billion of the $1.5 billion. And that $500 million that didn't make the cut wasn't about a lack of agreement on the need for the projects, it just tracked on a different path outside of the accelerated resilience. So in both Louisiana and New Orleans, we view the stakeholder engagement feedback being positive and constructive, and the existence of procedural schedules in both the LPSC and the New Orleans City Council is consistent with our financial plan.

This is Drew. I want to add to what Rod was saying, just to make sure you caught it at the beginning of his comment, he actually answered the second of your question at the beginning on the second docket. And that second docket does actually create an ability for us to do the math on how the benefits and the costs should work. And specifically, it allows the economics of customer outages to be part of the conversation. And so there's a few mechanisms that they create for that. But that's an important piece of that framework that the staff established.

I will also add that in New Orleans, regarding the $1.5 billion we initially filed and the $1 billion compliance filing after the feedback process, it represents roughly two-thirds of the proposed capital expenditure and 80% of the customer benefits, focusing on the $1 billion rather than the $1.5 billion in the accelerated docket process. We see the feedback as constructive in both Louisiana and the City of New Orleans today.

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

So perhaps, just pivoting to theory here and the pending complaints. Is it completely dependent on FERC? Or are you able to facilitate progress at FERC in any specific way? I just want to come back to that back and forth in just the procedural elements a little bit more specifically here, if you will. And then, if I can, as a follow-up, are you still having settlement conversations with perhaps any of the parties considering maybe some of the ambiguities here?

The short answer to both parts of your question is that settlement discussions will be improved by the clarity from the FERC that we are currently waiting for regarding the sale leaseback and the uncertain tax position ruling, which we discussed in the December ruling and the procedural order issued last February. So yes, there are ongoing conversations and settlements regarding all of the related cases, but clarity on those two issues from the FERC will significantly aid in determining our path forward on settlement. Please go ahead. I apologize.

No, I'm sorry. It seems that it's dependent on them, right? There's no way to facilitate progress at FERC or enable it in a separate parallel docket as you mentioned a moment ago?

I believe that's a reasonable evaluation considering the positions some stakeholders have taken regarding their response to the December order. Clarity from the FERC will facilitate ongoing discussions. There is also a timing factor, as we anticipate that the FERC will take action sooner rather than later to maintain jurisdiction in relation to the Fifth Circuit and other entities. Although we do not have a specific date, we expect the FERC to act promptly to preempt what could become an appeals process if the matter remains unresolved.

Got it. Excellent. And then could you quickly discuss the guidance for 2023? I recall you mentioned the $0.22 and $0.10 for O&M. How much additional flexibility is there in the plan, considering potential developments? Also, could you provide more details on the components involved?

Thanks, Julien. It's early in the year. So we certainly have good line of sight on our ability to manage that through the rest of the year. There are some additional puts and takes that we would manage through depending on what happens. Obviously, if the weather is mild during the summer, we'd have to work through that. If it comes in more normal or hotter, then there may be opportunities to flex up. For some specifics, certainly, we talked about last year that in 2022, the higher O&M was tied to higher volumes, and we flex stuff, which helps us to derisk '23, and we're able to take advantage of some of that here. And then we've seen some favorability, as you probably saw in the materials around volumes in residential and commercials, and that may give us continued opportunity throughout the year if that continues to persist. The other area I would point out is interest expense, and we've been able to manage through some potential upside there as it relates to the timing of debt issuances, for example.

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

I wanted to follow up on the previous question regarding the utility O&M targets for the year, which you raised to $0.70 in savings. However, I noticed that the first quarter only contributed about $0.03. Are there any underlying challenges, such as inflationary pressures, that might be making it harder to achieve the O&M savings for the year? Or is it simply a matter of timing compared to the previous year?

Thanks, David. You're right. For the first quarter, we were down about $0.03, but our O&M doesn't occur ratably over the year. It's really tied, as I said, particularly last year, we ramped up with the higher volumes in the second and third quarter. So I would expect to see assuming normal weather, a much more spread versus last year in O&M in that second, third, and fourth quarter.

Okay. Got you. That's helpful. And then I was just wondering, are there any legislative bills in Texas that might be meaningful for your business as we get closer to the end of the session in the state for next month?

Yes, we are considering several items. One key focus is the resiliency filings from Entergy and other utilities. There are five weeks remaining in the session, but progress has been good. We are particularly interested in the precedents set in Texas regarding AMI filings, which allowed us to replace older assets with newer, more resilient ones while still accounting for the undepreciated assets. We are monitoring the various legislative developments to ensure we have the necessary flexibility with the commission to support our resiliency and reliability investments in Texas. Stakeholder engagement has been robust and active, and we will continue our efforts as the session progresses.

Our next question comes from the line of Ross Fowler with UBS.

I have a follow-up question regarding Slide 38 in relation to Julien's question. When I review the information presented, it seems that $0.10 in operational and maintenance costs and a $0.05 reduction in corporate expenses balance out the $0.05 improvement from a better sales mix. This contrasts with the $0.22 impact from weather, where $0.10 serves as an offset. Kim, to address your point, it appears that you’re indicating there are additional offsets available to cover the remaining $0.12, or perhaps some of that is related to a slightly favorable effect from other income and reduced interest expenses, bringing us closer to the midpoint? Otherwise, without the mitigation, are you suggesting we should expect to be at the low end of the '23 range?

Yes, Ross, I agree with you that there are various small factors in several categories beyond what you mentioned. You're correct about the $0.10 in Operations and Maintenance, the $0.05 in other areas, and the weather-related volume also being approximately $0.05. We observed that mix in the first quarter. You can expect to see some additional minor amounts throughout the rest of the income statement that will balance everything out.

Yes, Ross, it's Drew. While we acknowledge that the $0.22 is below the midpoint, it's still early in the year, and we do not consider that our final position. Our goal is to reach the midpoint, and we anticipate performing better by the year's end.

Got it. That's very clear. And then just maybe contextualize for me, you're showing 2% industrial growth in the quarter year-over-year. And Drew, you kind of went through this in some of the prepared remarks, but maybe give us a little bit more contextualization of your sort of 6% long-term aspiration versus what you're currently seeing?

Yes, I'll take that. We've discussed the factors driving our growth, and we have slides that highlight these drivers. As we've noted over the years, the Gulf Coast offers numerous advantages such as access to national and global markets, existing energy infrastructure, low energy costs, supportive communities, and a skilled workforce. These elements have fueled domestic investment in the Gulf Coast and throughout our service area along the Mississippi River. Additionally, we are facing challenges like disrupted global supply chains and geopolitical uncertainty, but we also have positive influences from initiatives like the IRA. Our estimate of 6% is a probability-weighted assessment of expected outcomes, factoring in that not every project reaches completion and delays can occur. If all projects were to materialize, the actual number could exceed 6%, but for now, we are planning based on this conservative assumption. The potential growth could increase given the supportive elements related to the IRA, although regulations, especially concerning hydrogen, remain somewhat unclear. There's considerable interest in the Gulf Coast area aimed at leveraging the established infrastructure. We already possess hydrogen production, consumption, transportation, and storage capabilities, making it a functioning hydrogen hub. Likewise, we have CO2 pipelines and related activities. Carbon capture presents a key opportunity as well, with current infrastructure in place. Stakeholders are taking these factors into account and exploring ways to enhance these prospects for the future. There are many promising investment opportunities on the horizon. For instance, during the recent groundbreaking event in Texas for Orange County, discussions with state officials revolved around hydrogen and carbon capture. They expressed enthusiasm about the growth possibilities they envision and are supportive of our efforts to ensure reliable energy generation to back this anticipated investment. Overall, we find ourselves in an exciting position with a wealth of opportunities ahead.

That's great. And of course, we'll be watching the potential for EPA plant rules around carbon capture. But for now, I'll jump back in the queue.

Your final question will come from the line of Steven Fleishman with Wolfe Research.

Just wanted to follow up on the question related to Siri, where, I think, Rod, you mentioned a timing element that FERC needs that before they lose jurisdiction. Could you give us a sense of what that timeline is or limit?

I don't have the exact procedural schedule at the moment, but I understand that the Fifth Circuit process involves all of our utility jurisdictions. There is an appeals process at the Fifth Circuit that will affect FERC's ability to clarify the December 23 decision. Our legal team believes that FERC wants to resolve any ambiguity to prevent a jurisdictional conflict between the Fifth Circuit's ruling on the appeals and their orders. That's why we're mentioning the possibility of a resolution sooner rather than later, although we don't have an exact timeframe, we acknowledge that it is a significant issue.

Okay. And then, I guess, a question for Drew, just things have quieted down a lot once the securitization was approved and fuel prices have come down and the like. Could you just give a latest sense of relationships with the Louisiana Commission and do they kind of have appreciation of the volatility that was created around stuff early in the year? And yes, any color there would be helpful.

Sure, Steve. I'll begin and then pass it to Rod, who has the relevant expertise in this area. You're correct, it is a bit more constructive now compared to last fall. Reflecting on last fall, it’s easy to forget that there was an election happening, with contested races and significant outside funding that added to the political dynamics, all following a difficult summer with rising gas prices. This was all converging as our securitization was becoming evident. We believe we still maintain strong relationships in Louisiana at all levels of government, including the commission. We aim to collaborate with them continuously and we don’t take that for granted. This is something we are very attentive to. We understand that our commissioners are focused on customer outcomes, and we are aligned with that. Now, I’ll hand it over to Rod for further insights.

Yes. I agree with your introduction, Steve. The decrease in gas prices has provided relief to customers, and since the election, we've had the chance to reconnect with commissioners about our customer-focused strategy, which has been beneficial. I want to mention that our latest interaction with the commission involved a vote on the gas business rate case, which was significant. The review of our Lake Charles Power Station and the gas rate case received unanimous support. It's also noteworthy that the proposed rulemaking regarding resiliency stemmed from our intentional efforts in engaging with the commission and other stakeholders, especially our customers. In light of the recent electoral developments and the year-end activities, we have increased our engagement efforts to ensure that the commission and relevant stakeholders are well-informed. Additionally, the appointment of a new commissioner in Louisiana signifies the start of a new phase for the commission. Each new addition provides us the chance to reassess, reset, and enhance our engagement. We are intentional about this to maintain alignment with the commission, as we have an ambitious regulatory agenda to support various customer-centric opportunities and investments in Louisiana. The growth in the state will place considerable demands on the commission, and our engagement process is designed to facilitate their work as we address our customers' needs. We understand this is an ongoing effort; engagement is continuous and not something we complete once. The stakeholder engagement process is a constant commitment.

We have no further questions at this time. Mr. Abler, I will turn the call back over to you.

Thank you, Regina, and thanks to everyone for participating this morning. Our quarterly report on Form 10-Q is due to the SEC on May 10, and provides more details and disclosures about our financial statements. Events that occur prior to the date of our 10-Q filing that provide additional evidence of conditions that existed at the date of the balance sheet would be reflected in our financial statements in accordance with generally accepted accounting principles. Also as a reminder, we maintain a web page as part of Entergy's Investor Relations website called Regulatory and Other Information, which provides key updates of regulatory proceedings and important milestones on our strategic execution. While some of this information may be considered material information, you should not rely exclusively on this page for all relevant company information. And this concludes our call. Thank you very much.