Earnings Call Transcript
ENTERGY MISSISSIPPI, LLC (EMP)
Earnings Call Transcript - EMP Q4 2021
Operator, Operator
Good day and thank you for standing by. Welcome to the Entergy Fourth Quarter 2021 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Bill Abler, Vice President of Investor Relations. Mr. Abler, the floor is yours.
William Abler, Vice President of Investor Relations
Good morning, and thank you for joining us. We will begin today with comments from Entergy's Chairman and CEO, Leo Denault; and then Drew Marsh, our CFO, will review results. In an effort to accommodate everyone who asks questions, we request that each person has no more than two 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 Leo.
Leo Denault, Chairman and CEO
Thank you, Bill, and good morning, everyone. Today, we are reporting strong results for another successful year. Our adjusted earnings per share is $6.02, which is in the top half of our guidance range. This is the 6th year in a row that our results have come in above our guidance midpoint. Underlying our steady predictable results is Entergy's dedicated, robust and resilient organization working day in and day out to create sustainable value for all our stakeholders. Because of the solid foundation that we have built and our proven track record, we are confident that we will continue to achieve success into the future by delivering meaningful outcomes. As such, we are initiating 2022 guidance and affirming our longer-term outlooks in line with our discussions at EEI. This continued success is important to all our stakeholders, including our customers. Being able to navigate through headwinds is possible only through financial discipline that allows us to continue to raise the capital needed to serve our customers. Without financial health, we could not have raised the over $4 billion needed to fund the restoration from recent storms, including Ida and Laura, two of the worst storms ever to hit Louisiana. Moreover, we have managed through the revenues lost as a result of these storms and COVID-19. Without financial health, we could not consider accelerating resilience investment to better withstand future storms, nor could we make the investments in clean energy that our customers, large and small, are seeking. In 2021, like in 2020, we were presented with headwinds caused by the pandemic and weather events. And as in 2020, we proved we could navigate those headwinds and continue to deliver strategically, operationally, and financially. Strategically, we stood up our customer organization and appointed our first-ever Chief Customer Officer, David Ellis. David is building a team to work with our customers to find ways to meet their reliability, affordability, and decarbonization goals. They are actively working on unique and significant opportunities to help our customers reduce their carbon emissions. We created a new sustainable planning, development, and operations group, led by Pete Norgeot. This group will drive greater strategic direction and collaboration in addressing stakeholders’ sustainability expectations. We aligned key internal teams to work collectively to implement strategies that will decarbonize our portfolio and respond to our customers' sustainability needs, all while maintaining affordability and reliability for customers. Guided by this holistic planning framework, we updated our long-term supply plan to significantly increase renewable capacity. We now expect 11 gigawatts of renewable capacity by the end of 2030, more than double the estimate in our previous plan. As part of this plan, we issued renewable RFPs over the last year totaling nearly 2,000 megawatts. We completed the tax equity partnership for Searcy Solar in Arkansas. We designed this unique structure to help facilitate the economics of utility ownership while better aligning the interests of the project owner and tax equity partner. This is an important step to make utility renewable ownership an economic option for our customers. We proposed the Orange County Advanced Power Station in Texas. If approved, this will be our first hydrogen-capable plant and will provide efficient power with the flexibility to utilize clean hydrogen. We sold Indian Point and received approval from the NRC to sell Palisades, which is our last remaining EWC nuclear plant. We expect the sale to be completed around midyear. We made great progress in our diversity, inclusion, and belonging initiatives, including creating the diversity and workforce strategies organization. This team, led by Taiwan Brown, is expanding our workforce development efforts and developing new standards for hiring. We concluded 2021 with gains in both female and diverse representation towards our goal of reflecting the rich diversity of the communities in which we serve. Consistent with our progress, we received many awards and recognition for multiple aspects of our business, including environmental leadership and responsibility, storm response, social responsibility, corporate citizenship, economic development, and workplace excellence. Operationally, we improved distribution reliability in 2021. For transmission, years of hard work and strategic capital investment led to system improvements as that team achieved its best reliability performance in more than 20 years. We wrapped up our AMI initiative with more than 3 million meters online. These advanced meters allow our customers to better understand and control energy usage to achieve their affordability goals. Advanced meters also represent a foundational component of other customer and grid technology investments that will further improve service and reliability. Through a continued focus on improved operations, Grand Gulf achieved its highest-ever generation output in 2021. In response to the historic damage caused by Hurricane IDA, we deployed the largest restoration workforce in our history. The storm presented unique challenges, and we came up with innovative solutions to restore power and help our customers and communities recover in a timely manner. We deployed portable generators for key businesses and community services and procured materials and supplies from non-traditional sources. For example, we used pipe from the halted Keystone pipeline to strengthen the foundation of new distribution structures in areas with soft soil conditions. Financially, our adjusted earnings results were in the top half of our guidance range. We maintained solid liquidity throughout the year. By driving business risk improvements and progress on our ATM program, we reduced our remaining equity needs through 2024 to $700 million, roughly one-fourth of what we communicated at our Analyst Day in 2020. We made significant progress on storm cost and balance sheet recovery. We expect to receive more than $3 billion of securitization proceeds in the coming months, which includes a $1 billion down payment toward IDF costs. We filed an uncontested settlement in Louisiana, and that case is on the agenda for today's LPSC meeting. The entire Entergy team proved once again to be highly resilient under challenging circumstances, and I cannot thank them enough. We also know that the key to continuing to achieve outcomes into the future is to ensure we are working for all of our stakeholders: customers, employees, communities, and owners. We are committed to achieving meaningful outcomes for each. This holistic approach will drive a vibrant, sustainable business for years to come. Our three-year, $12 billion capital plan will continue to benefit customers with improved reliability, resilience, customer experience, and economic development. Our plan will also support our commitment to reduce carbon emissions. These customer-centric investments, combined with our growth forecast and regulatory mechanisms, support 5% to 7% growth in adjusted EPS and a strong credit profile. Roughly one-third of the capital will go toward generation. In addition to maintaining our highly efficient gas fleet, this capital will continue to modernize and ensure the longevity of our emission-free nuclear fleet. In the planning period, we will increase our renewable portfolio to more than 2 gigawatts, representing a 300% growth in renewables. That trend will not only continue but accelerate beyond 2024, with plans for 11 gigawatts in service by the end of 2030. With this plan, we expect to achieve our 50% carbon intensity reduction goal several years earlier than our 2030 target. Additionally, our generation capital plan includes the initial portions of the investment in the Orange County Advanced Power Station with planned hydrogen capability, which is expected to come online in 2026. As we've discussed, our region has tremendous advantages in both hydrogen and carbon capture. Our distribution and utility support capital plan totals $5.8 billion. The plan is designed to deliver improved reliability, resilience, and customer experience through projects focused on asset renewals and enhancements in grid development. We will also ensure the grid is ready for new customer connections. Our transmission plan is $2.3 billion and will drive reliability and resilience while also supporting renewables expansion. Projects will focus on asset renewal and enhancements, congestion relief, and new customer interconnections. We have a clear line of sight to the base plan, but our intention is to do even better. Our future investment profile will increasingly be driven by meeting evolving customer needs. The two most significant areas of focus for our customers in the coming years are resilience and decarbonization. We have invested significantly in resilience for years, but with the potential for increasing frequency and intensity of weather events, it's time to review the speed with which we will make those investments. We've preliminarily identified between $5 billion and $15 billion of resilience investments that could be accelerated, which will help mitigate future storm damage and costs. Over the coming months, we'll map out what makes sense for our customers with a goal to share this information with our regulators, initially through technical conferences this spring, and subsequently through filings targeted for late summer so that we can, with their support, proceed to accelerate our resilience investments. Our customers have aggressive decarbonization objectives. We are doing our part today with one of the cleanest large-scale generating fleets in the country. And as I have previously mentioned, the continued operation of our large nuclear fleet and the addition of significant renewable capacity will allow us to further support their decarbonization goals to reduce Scope 2 emissions. We are working to provide our customers with the products they need, such as green tariffs so that they can meet their environmental objectives. By meeting their clean energy needs, we can further accelerate our renewable deployment. However, a reduction in Scope 2 emissions will not be enough for many of our customers. Some are also looking for ways to reduce their Scope 1 emissions. Electrification is an efficient way to lower those emissions. Given the size of our industrial base as well as their emissions levels, helping our customers reduce their carbon footprint presents an exceptional opportunity for Entergy. This is true for new and expansion customers like U.S. Steel and Sempra, who recently announced facility additions with electrified processes that will drive significant new sales. These two customers alone could add 850 megawatts of new load, which represents nearly 2,000 megawatts of renewable capacity if the new sales are supplied with 100% green energy. It is also true for existing customers who need to decarbonize their processes to meet their objectives. As we talked about at EEI, we believe the addressable market could be as much as 30 terawatt hours of additional clean energy by 2030. Understanding the importance of renewables in attracting new jobs, Entergy Mississippi developed a strategy called Edge, economic development with green energy, to give Mississippi an edge in recruiting industry to the state. Entergy Mississippi is making its largest-ever commitment to renewable resources with plans to replace aging national gas plants with 1,000 megawatts of renewable energy over the next five years. The plan has drawn praise and support from the governor and the state's public service commissioners. We continue to work with our customers to determine the size and pace of their needs. We will ensure that our resource plans and financial forecasts reflect the latest customer insights, and we'll keep you updated along the way. This is an exciting opportunity for us and one that is unique to Entergy. 2021 was another successful year for Entergy that benefited from the resilience we’ve built into our business. We delivered on our commitments, including steady predictable growth. We have a solid plan with significant certainty over the next three years. Beyond our base plan, other significant opportunities in renewable generation, clean electrification, and resilience acceleration will serve to extend our runway of growth. This growth will deliver many benefits for all of Entergy's stakeholders, ensuring the sustainability of our business for decades to come. Before I turn it over to Drew, I'm excited to announce that we will host our Analyst Day on June 16 in New York City. We will continue the conversation on the significant opportunities that we see ahead, and we will give you a view of our 5-year outlook. So stay tuned for more details. I'll now turn the call over to Drew, who will review our financial results and our outlooks.
Andrew Marsh, CFO
Thank you, Leo. Good morning, everyone. As Leo said, today we are reporting strong 2021 results in the top half of our guidance range. We executed on key deliverables throughout the year, and our results are a validation of the resilience we've built into our business. We are confident that we will continue to deliver on our commitments, and we are initiating our 2022 guidance and confirming our longer-term 2023 and 2024 outlooks. I'll begin by discussing results for 2021 and then provide an overview of the key business drivers for 2022. Starting on Slide 6. Entergy adjusted EPS for 2021 was $6.02 and $0.36 higher than 2020. Turning to Slide 7. Our earnings growth was driven by investments across our operating companies that benefit customers through improved resilience, reliability, and operational efficiency. Weather-adjusted billed retail sales growth was 2% for the year as sales rebounded from COVID-19 impacts. Industrial sales were strong at around 6% higher than 2020. We saw continued growth from new and expansion customers, which helps keep rates low, as well as higher-than-expected demand from cogeneration customers. Weather effects on billed sales reduced our earnings by $0.03 per share for the year. Our December temperatures were at record highs, and much of those sales were not yet billed before the year-end. When you take into account the negative weather impact for the year, it was more significant at $0.11. Starting with first quarter 2022 results, we will use our AMI infrastructure to update our weather estimates based on the calendar view versus the billing cycle. To help you, the appendix of our webcast presentation has updated 2021 estimated weather effect by quarter, which reflects the new methodology. Coming back to drivers for 2021, our utility O&M returned to more normal levels following last year's significant reductions from our flex spending program used to mitigate the impact of lower revenues from COVID-19. We also saw higher depreciation and interest, which were largely the result of customer-centric investments. Results of EWC are summarized on Slide 8 and reflect the continued wind down of that business. We expect to close on the Palisades sale by the middle of 2022, which will complete our exit of the merchant business. On Slide 9, operating cash flow for the year was $2.3 billion, slightly lower than last year. Non-capital storm costs were a large driver of the $220 million increase, while higher utility revenue provided a partial offset. Moving to Slide 10. We continue to expect to achieve credit metrics that meet or exceed rating agency expectations by the end of 2022. Solid results from business de-risking efforts were reflected in Moody's upgrade of Entergy Texas long-term issuer and bond ratings on January 28. This upgrade recognizes the constructive regulation over the past several years, including riders and responsive storm cost recovery that have allowed Entergy Texas to earn a reasonable return on equity. The improved credit rating allows the company to attract capital at a lower cost, which benefits customers. At the same time, Moody's moved Entergy Arkansas and Entergy Mississippi to a positive outlook while also citing constructive regulatory factors. Take a minute to provide an update on the excellent progress we've made with storm cost recovery. Entergy Texas has received approval from both the storm cost determination and financing order; we expect to receive securitization proceeds in March or April. In Louisiana, we have submitted a unanimous settlement to the 2020 storm proceeding, which includes support for an additional $1 billion as an early prepayment against hurricane Ida cost recovery. The matter is on the agenda for today's Louisiana Commission meeting. Assuming the LPSC decides the matter today, we expect to issue the securitization bonds before storm season. We have also refined our estimates for Hurricane Ida, and now expect the cost to be $2.7 billion, slightly above our original expectations due to additional resilience and hardening investments as well as higher resource costs. We're completing storm invoice processing, and Entergy Louisiana is on track to submit its cost recovery filing in April, followed by Entergy New Orleans around midyear. Our goal remains to receive the balance of Entergy Louisiana's Hurricane Ida securitization proceeds by the end of this year, pending Louisiana commission's procedural schedule for the case. Another area we have successfully reduced business risk is our pension obligation. In 2021, our funded status improved by approximately $900 million or 38% as a result of our increased contributions and actions to accelerate the reduction of the liability over the last several years. In addition, slightly higher interest rates and strong pension asset returns in 2021 contributed to the improvement. We've also made progress against our near-term growth equity needs, as you can see on Slide 11. In 2021, we utilized our at-the-market equity program and sold close to $500 million of common equity. The decrease in our pension deficit further improves our Moody's cash flow metric, and we reduced our remaining equity needs by an additional $300 million. As of today, our remaining growth equity requirement through 2024 stands at $700 million, roughly one-fourth of the original expectation. Looking ahead, Slide 12 shows that the fundamentals of our industrial customers remain robust. The forward commodity spreads remain supportive of continued growth and expansion. The four sectors shown on the slide represent nearly half of our industrial sales. The economic indicators remain at or near multiyear highs, and our industrial base continues to be resilient and competitively advantaged. Our adjusted EPS guidance and outlooks shown on Slide 13 remain unchanged. Our 2022 adjusted EPS guidance range of $6.15 to $6.45, with a midpoint of $6.30. Our plan supports steady, predictable 5% to 7% annual growth. We also expect to continue our dividend growth commensurate with our adjusted EPS growth. The key drivers for 2022 guidance highlighted on Slide 14 are straightforward and in line with what you would expect. Starting with the top line, we will see revenue growth result from the customer-centric investments we've made, as well as increases in depreciation and interest expense associated with the new assets. We also expect an increase in retail sales volume of 1.8% on a weather-adjusted basis. This reflects increases in commercial and industrial sales and a slight decline in residential sales. Consistent with our EEI disclosures, we anticipate an increase in other O&M due to typical drivers, including inflation. We will also have continuous improvement efforts to achieve efficiencies and flex tools that help mitigate changes during the year. The appendix of the webcast presentation contains additional details on the specific drivers, including quarterly considerations and earnings sensitivities. As Leo mentioned, 2021 was another successful year for our company. We delivered results in the top half of the guidance range despite significant storm disruption. We have strong fundamentals that underline our plan, which supports steady, predictable growth, and we are working to do even better. Entergy has a unique and significant opportunity ahead. We are focused on translating that opportunity into a reality for our customers, our employees, our communities, and our owners. We look forward to talking more about these opportunities for you now over the coming months and at our Analyst Day in June. And now the Entergy team is available to answer questions.
Constantine Lednev, Analyst
Hi, good morning, Leo and team. It's actually Constantine here for Shar. Congrats on a great quarter and the closeout to the year. I appreciate the comments on potential upsides from resiliency spending in the prepared remarks. I believe Mississippi has received an independent consultant recommendation on resiliency. Do you have any early indications on what the governing factors are, including some of the spending? Is it bills, regulatory constructs, financing needs? Any color on the early discussions that you may have?
Rod West, Executive
Yes. This is Rod. Good morning. I think the early discussions will focus on the state-by-state cost-benefit analysis. If you think about our desire to accelerate resiliency, Leo alluded to it. You've got four dimensions that we talked about: storm intensity, frequency, duration, and location. We're in the early stages right now of doing the statistical analysis around various scenarios. Each of those scenarios will play out differently in each of our jurisdictions. We think the lion's share of the work, as you might expect, is going to show up in Louisiana. That's the subject of the technical conference when we zero in on the scenarios and the planning assumptions where the regulator, along with the customers, will be in a better position to make a decision on which direction they want to go. But as Leo alluded to, the technical conference is the prelude to the filings later in the year when we start to show the public what we have to believe in order to put a specific acceleration plan in place. The nuances will be a state-by-state play, if that's helpful, but it's early in the process, which is why you're hearing us frame it up in general terms.
Constantine Lednev, Analyst
Okay. That's helpful color. And just with the FEMA applications for resiliency funding of the $450 million, does that kind of play a factor in how those plans get developed? Are those projects included in the CapEx plan? Or would you fund those projects yourself if the FEMA applications don't go through?
Rod West, Executive
As we stated before, anything that comes from the Feds helps to offset what would otherwise be borne by customers. We're going to remain actively involved in ensuring we maximize whatever input the Feds might be able to provide. That said, we still have to go forward with our regulators assuming that the Feds don't contribute, whether it's offsetting existing storm costs or putting forth federal funds toward future resiliency spend. Our plans are assuming from a scenario planning perspective both dynamics, but it's not dependent upon federal funds.
Constantine Lednev, Analyst
Okay. That's great color. Just a quick follow-up on the equity needs, kudos to the whole team for materially mitigating the needs from the Analyst Day. I'm curious about your thoughts on the timing for the remaining $700 million in plan. Is there a threshold or event that could accelerate? Or do you have some cushion to defer given the progress made in '21, maybe a continuation of the ATM at a modest level?
Andrew Marsh, CFO
Yes. This is Drew. We are still mindful that we'd like to get this done. We're continuing to work through with the ATM that we put in place before. I think you'll continue to see us use that, and we could knock this out fairly quickly with that framework. We'll be mindful of any other opportunities that arise if the right market conditions come along that allow us to finish it off through a block. So we're paying close attention to that. The number has gotten much smaller, so the end is sort of in sight for us overall.
Constantine Lednev, Analyst
Thanks. That’s very helpful, and thank you for taking the questions and congrats on the FY21.
Operator, Operator
Thank you. Next up, we have on the line, Jeremy Tonet of JPMorgan. Your line is open.
Jeremy Tonet, Analyst
Hi, good morning.
Leo Denault, Chairman and CEO
Good morning, Jeremy.
Jeremy Tonet, Analyst
Just wanted to start on load growth, if I could. Could you provide a little bit more detail on the significant growth on the industrial side? You provided some commentary there in the slides. But just wondering how you see that trending, I guess, relative to pre-pandemic levels and expectations to kind of exceed that? You talked a bit about green demand. Just wondering if you could update us a little bit more on where does the green tariff demand stand now across this customer base versus where it was 12 months ago? And how you see that kind of evolving over time?
Andrew Marsh, CFO
So this is Drew. I'll take the first piece on the load growth, and I'll let Rod talk about the green tariff. Overall, our load growth for the industrial side continues to be robust. I went through some of the drivers for our main industries in my prepared remarks; those are in really good places. We do have the announcements that we talked about with U.S. Steel and Sempra, and we are continuing to see demand. The nature of it is evolving. Customers are looking for clean, green options at a low cost, and we are well-situated for that. As a result, that's our opportunity from a generation perspective. All of the other fundamentals that we've had all along are still there: proximity to the Gulf Coast, availability of a workforce, supportive communities; it continues to attract investment from our customers and for others from outside the area today. So relative to the pre-pandemic, I would say that's pretty good. Post-pandemic, we're seeing that shift to wanting that clean electrification opportunity. That trend is a little lower for 2022, but looking out to 2024 and beyond, we expect it to ramp up significantly on that clean electrification opportunity.
Rod West, Executive
And I'll simply add, Leo alluded to the 30 terawatt hours of an addressable market through 2030. The efforts that we've taken internally to engage differently with those customers to identify how this demand might play out. What we saw with U.S. Steel and Sempra underscores the thesis that the opportunity for growth is there. We'll share more details about how we see the next five years playing out at Analyst Day. The early indicators are that we're pretty confident that our industrial customers, in particular, are making plans to reduce their carbon emissions. We think we have a unique opportunity to play a role in helping them get there, and that does foreshadow great demand for our green products.
Andrew Marsh, CFO
That's helpful. Thanks for that. Without front-running the Analyst Day, are there any broad strokes that you could provide us as far as themes or other topics that we might expect at the Analyst Day update wise?
Leo Denault, Chairman and CEO
Well, I think as I mentioned, Jeremy, we're going to go a couple of extra years as we always do at Analyst Day. Those opportunities that Rod talked about will start to show up in 2024 and beyond. The acceleration picks up as you get into that timeframe. The major theme will likely revolve around electrification opportunities and growth prospects.
Jeremy Tonet, Analyst
Got it. That's helpful. And just one more, if I could. With regards to Grand Gulf, given stronger operations in 2021, could you provide an update on how things are looking right now operationally in '22 expectations? Has this kind of improved performance come through when needed? Have stakeholder conversations improved?
Leo Denault, Chairman and CEO
Grand Gulf has improved operations, as I mentioned in my prepared remarks, achieving its highest generation output in 2021. We expect to continue that performance into the future, especially as we continue upgrades on equipment associated with our nuclear plants. Our nuclear fleet is very important to the economic development of our jurisdictions. The clean nature of our fleet meets Scope 2 needs that some of our customers have, contributing to the decarbonization objectives that are a priority for many of them. We have a lot of dialogue with customers about the nuclear fleet being an integral part of the decarbonization narrative so we see stakeholder conversations improve in that respect. Certainly, we have folks following the development of all different kinds of technologies in the nuclear space. Should we get to a point where some form of small modular reactors is economically viable, we would certainly make it part of the mix. Our jurisdictions are typically open to developing new assets that create jobs and have high energy intensity to benefit economic development.
Michael Lapides, Analyst
Hey guys, thank you for taking my question. I have a couple, kind of unrelated to each other. First of all, on the Orange County project, seems like it's a long construction time frame, four years, right? If you get approval in May, June time frame, but in service not till May of '26? Is that due to the hydrogen capability being added? Is there some other driver? Normally, combined-cycle is a little bit quicker than that?
Leo Denault, Chairman and CEO
No, there's nothing really. By the time we get the regulatory approval and get into the process, there’s more work to be done at this stage on the hydrogen side, but it's not a significant cost driver at these early stages to get to the 30% blended capability. It's a big plant.
Andrew Marsh, CFO
I would say, Michael, that given our history of construction around CCGTs, we would typically come in beneath the expected timeline in pretty much every instance. So I wouldn't expect that we would end up in June of ‘26 unless there were some weather-related issues or something else going on.
Michael Lapides, Analyst
Got it. And unrelated topic, the FERC put out its policy statement about gas infrastructure projects and GHG emissions. Just curious how you see this process changing the permitting for new gas infrastructure? What does that mean for your Louisiana and Texas service territories longer-term?
Rod West, Executive
Yes, Michael, it's Rod. We're closely aligned with our industrial customer base regarding what this might portend for the future. It fits into our perspective that this might be a catalyst for accelerating decarbonization efforts. It fuels our point of view around our ability to help them achieve their objectives, whether it’s through Scope 2 resources from our electrical supply or any opportunity we have to electrify their processes. It's unclear how it will ultimately play out, but we're giving thought to how that applies to other potential customers, like Sempra, as they're working through their permitting process. We are stakeholders in those proceedings for that very reason.
Jonathan Arnold, Analyst
Hi, good morning, guys. Just a quick one on longer-term financing. Drew, I think you sort of talked about being done once you've completed the '22 to '24 reduced equity raise. How do you think about that sort of post-'24 period? Is something similar to the run rate you've effectively been doing here a sensible assumption? Or could you be out of the capital raise business for a few years like you've been in the past?
Andrew Marsh, CFO
That's a good question, Jonathan. We've talked a lot about the types of financings that are available to us. Financing with equity capital markets is useful because it gives you a clear idea of the capital you can raise. As you look out beyond our horizon, there will be other options available, some from a strategic rather than a capital markets perspective. But that's longer-term, not something we're focused on right now.
Jonathan Arnold, Analyst
Okay. And just to make sure I've got this straight, the $300 million or so that you did under the ATM, that's not yet settled. Those shares are not yet in the share count, correct?
Andrew Marsh, CFO
That's correct.
Rod West, Executive
Yes, this is Rod. The Liberty County project was pulled not because the commission didn't recognize the benefits of the actual project. It had more to do with where the Texas Commission stood in terms of how they viewed the Liberty County project and its implications inside of ERCOT. We didn't want to send a signal that there was anything untoward with the project, but we pulled it because we wanted to come back to the commission when they had a full commission. We expect to come back with more, but it's a short-term timing play for us.
Paul Zimbardo, Analyst
I want to follow up on the potential storm hardening acceleration where you talked about some of those data points leading up to the Analyst Day. Should we think of that as purely incremental capital, or could that mitigate some of the capital already in the plan as you don't need to do some other work around storm hardening?
Leo Denault, Chairman and CEO
It's really an acceleration of things that we've identified could be done. For example, in our current three-year outlook, there's around $2.7 billion of T&D investments you could consider resilience investments. About $1.7 billion of that is in the T space, about $1 billion in the D space. We've been doing resilience spending in a combination of new projects, and then we do storm hardening after the fact when we're repairing the storm damage to build to the new standards. What we will look at with the resilience spend is whether there are things we could do faster than would have otherwise been proposed, so it would be incremental in the time frames proposed.
Andrew Marsh, CFO
Yes, this is Drew. We are not immune from inflation issues, and we're monitoring it closely. On the fuel side, which gets collected through a separate fuel rider in Arkansas, that may influence the 4% cap upwards a bit; however, it won't hinder our investment there. We haven't seen the kind of cost pressures on the O&M side that have been prevalent in other sectors, but we are monitoring and ramping up our continuous improvement efforts to manage against the potential for inflation. While there has been pressure on some projects, the bulk of our projects still have strong NPVs for customers and should receive support from regulators.
Stephen Byrd, Analyst
Hi, good morning. I wanted to follow up on nuclear operations. It looks like there's been good improvement there. Can you speak to the dialogue with the NRC? You're not on Column four and operations are improving. Can you provide any additional color on that?
Leo Denault, Chairman and CEO
We continue to have a lot of dialogue at all levels from the resident inspector to the regions to the headquarters in Washington. Our relationship with the NRC is strong and open. I meet with resident inspectors when I'm on site, and I regularly meet with the region. We had to do a lot of it virtually over the past couple of years, but we still have a very constructive relationship.
William Abler, Vice President of Investor Relations
Thank you, Chris, and thanks to everyone for participating this morning. Our annual report on Form 10-K is due to the SEC on February 25 and provides more details and disclosures about our financial statements. Events that occurred before the date of the 10-K filing, which provide additional evidence of conditions that existed at the date of the balance sheet, will be reflected in our financial statements in accordance with generally accepted accounting principles. Also, as a reminder, we maintain a webpage as part of Entergy's Investor Relations website on 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, you should not rely exclusively on this page for all relevant company information. This concludes our call. Thank you very much.
Operator, Operator
Then this concludes today's conference call. Thank you all for participating. You may now disconnect and have a good day.