Xcel Energy Q2 2021 Earnings Call Transcript

Quartr
Provided by Quartr
July 28, 2021

There are 11 speakers on the call.

Operator

Good day, everyone. Welcome to Xcel Energy's Second Quarter 2021 Earnings Conference Call. Today's conference is being recorded. Questions will only be taken from institutional investors. Reporters can contact media relations with inquiries and individual investors and others reach out to Investor Relations.

Operator

At this time, I would like to turn the conference over to Paul Johnson, Vice President, Treasurer and Investor Relations. Please go ahead, sir.

Speaker 1

Thanks, Nicole. Good morning, and welcome to Xcel Energy's 2021 Second Quarter Earnings Conference Call. Joining me today are Ben Fowke, Chairman and Chief Executive Bob Frenzel, President and Chief Operating Officer Brian Van Abel, Executive Vice President and Chief Financial Officer And Amanda Rome, Executive Vice President and General Counsel. This morning, we will review our 2021 results and share recent business and regulatory developments. Slides that accompany today's call are available on our website.

Speaker 1

As a reminder, some comments made during today's call may contain forward looking information. Significant factors that could cause results to differ from those anticipated are described in our earnings release and our SEC filings. Today, we will discuss certain non GAAP Measures including ongoing earnings, electric and natural gas margins. Information on compatible GAAP measures and reconciliations are included in our earnings release. In addition, please note this is Ben Foulkes' last earnings call.

Speaker 1

He will retire as CEO in August, but will continue as Executive Chair of the Board. Ben has been an outstanding CEO and will be missed. I'll now turn the call over to Bob.

Speaker 2

Thank you, Paul, and good morning, everybody. Before we dive into quarterly results, I just want to take a few minutes to recognize Ben and thank him for his leadership. He's been a leader at Xcel Energy for 2 decades as Treasurer, CFO, President and Chief Operating Officer And then CEO and Chairman of the Board. Since he assumed the CEO role in 2011, We've been a national leader in reliability, customer service and safety, all hallmarks of excellent utility operations, And our operational performance has improved over that period. For example, we transformed our nuclear plants into 1 of the top ranked fleets in the nation, While lowering our cost structure by 20%.

Speaker 2

And under Ben's leadership, we delivered for the environment, I'm a national leader in wind energy and highlighted by our steel for fuel strategy. We've tripled our total wind capacity from 3,400 Megawatts Over 10,000 Megawatts and our owned wind growing from 300 Megawatts to more than 4,000 Megawatts. We've significantly reduced the level of coal in our fuel mix from 50% to 21% and we've reduced our carbon emissions by 51 We are the 1st major U. S. Utility to establish 100% carbon free goal, While remaining a stalwart champion for reliability and affordability.

Speaker 2

We've delivered excellence for our financial stakeholders as well. We've tripled Xcel Energy's market cap from $12,000,000,000 to $37,000,000,000 and our stock price has increased from $24 per share to almost $70 per share, Reflecting a TSR of 300% and outpacing our peer group. We've met or exceeded our earnings guidance every year and increased our dividend in line with our earnings growth. And beyond Xcel Energy, Ben's recently served as Chairman of EEI, leading through pandemic He's had a tremendous run as CEO and will leave a lasting legacy at Xcel Energy For the utility industry, and I would go so far as to say for the country. So thank you, Ben, and congratulations on your upcoming retirement in August.

Speaker 2

Look forward to your continued leadership at the Board level and partnering with you on important federal policy efforts related to infrastructure and clean energy. Looking ahead, and I'm honored with the opportunity to lead this great company, and I recognize the LeBron James size shoes that I'm filling. Since joining Xcel Energy 5 years ago, Ben and I have worked closely on the development and the execution of our strategy and that will not change. We'll continue to lead the clean energy transition, enhance our customers' experience and we constantly work to keep our customers' bill low and deliver an affordable product. We've had a fantastic leadership team and significant bench strength, and I'm confident in our ability to capitalize on the growth opportunities in front of us, While maintaining our commitment to reliability and affordability, I'm excited about our growth opportunities over the next decade, Driven by our generation resource plans, transmission expansion, distribution investments in our electric vehicle vision.

Speaker 2

As we move forward, innovation is more critical than ever as we prepare to move from 80% carbon reduction by 2,030 To 100 percent carbon free electricity. I'll be focused on clean technologies in both our electric and our natural gas businesses, This will continue to drive efficiency and produce strong operational results.

Speaker 3

And safety is another area where

Speaker 2

I plan to help drive innovation. In the coming months, I look forward to continued engagement with our customers, our communities, our regulators, our investors and of course our workforce. We have the best employees in the business and I'm proud of what we've accomplished and I'm excited for the future successes that we'll achieve together. To our investors, we appreciate the trust that you place in us and we'll continue to be good stewards of your investments. Now turning to the quarter, today we reported solid quarterly earnings of $0.58 per share compared to $0.54 per share last year.

Speaker 2

We're off to a good start and we are reaffirming our 2021 guidance. We made significant progress on various regulatory initiatives, including 3 Constructive rate case settlements that Brian will discuss in more detail. In addition, we've advanced our plans for adding incremental renewables. In Wisconsin, the Commission approved our proposal for the 74 Megawatt Mustang Solar Project for $100,000,000 which will be the largest solar facility in Western Wisconsin. In June, the Minnesota Commission approved our proposal to buy out a repowered 120 Megawatt Wind Farm PPA for $210,000,000 from ALLETE.

Speaker 2

This repower project will save our customers money while extending the life of a renewable energy resource. And the Minnesota Commission continues to evaluate Our $575,000,000 proposal to build a 460 Megawatt solar facility takes advantage of existing transmission as we phase out of coal. We are confident the commission will see the customer and economic benefits and expect a decision later this year or early in Q1 of next year. Additionally, as part of our continued commitment to foster a skilled and diverse workforce, we propose a training program in Minnesota to help those in underrepresented communities develop Skills to succeed in energy related construction careers. Program graduates will have the opportunity to be considered for participation In our Sherco Solar Proposal and other future projects.

Speaker 2

In June, we filed an alternative Minnesota resource This proposal addresses the concerns of various parties by removing the Sherco combined cycle from consideration and replacing it with 2 combustion turbines. Key components of the revised plan include an early retirement Both the King and the Sherco III Coal Units in 2028 and 2,030 respectively, a life extension for our Monticello Nuclear Plant, Construction of new transmission lines in order to take advantage of the interconnection rights from the retiring coal units and the addition of 3,100 and 300 Megawatts of repowered Blackstar CTs, 1900 Megawatts of flexible peaking resources and 2 50 Megawatts of new storage. We've provided the commission with an outstanding resource plan that would reduce carbon, while maintaining reliability and customer affordability. We expect a decision on the Minnesota Resource Plan later this year or early next. In addition, we continue to make good progress and are in the discovery phase of the Colorado Resource We expect the commission decision on both proposals in early 2022.

Speaker 2

And between Minnesota and Colorado resource plans, we anticipate adding nearly 10,000 megawatts of new renewables to our system To meet our 80% carbon reduction goal by 2,030. And with that, I'll turn it over to Brian.

Speaker 4

Thanks, Bob, and good morning, everyone. We had a good second quarter recording $0.58 per share compared with $0.54 per share last year. The most significant earnings drivers for the quarter include the following: Higher electric and natural gas margins increased earnings by $0.19 per share, primarily driven by riders and regulatory outcomes to recover our capital investments. In addition, a lower effective tax rate increased earnings by $0.06 per share. As a reminder, production tax credits lower the ETR.

Speaker 4

However, PTCs are flowed back to customers through lower electric margin and are largely earnings neutral. Offsetting these positive drivers were Increased depreciation and interest expense, which reduced earnings by $0.09 per share, reflecting our capital investment programs Increased O and M expenses, which reduced earnings by $0.07 per share and lower APDC decreased earnings by $0.05 per share, largely due to placing several large wind farms into service last year. Turning to sales, Weather normalized electric sales increased by 5.3% in the Q2. This reflects a comparison to last year when the pandemic restrictions in our states were at their highest levels and Sales were most depressed due to COVID impacts. Our year to date weather and leap year adjusted electric sales increased 1.6%.

Speaker 4

We continue to anticipate modest annual weather adjusted sales growth of approximately 1%. Shifting to expenses. O and M increased $50,000,000 for the quarter, which largely reflects the timing of expenses between the two periods. Last year, we had significant O and M reductions in the second and third quarter to offset the impact of lower sales from COVID, while the 4th quarter was at higher levels. So the quarterly O and M comparisons will be chunky this year.

Speaker 4

Turning to regulatory filings, we reached constructive settlements in 3 rate cases. In Wisconsin, we agreed to a rate increase of $66,000,000 over 2022 to 2023 based on ROE of 9.8% in 2022, 10.0 percent in 2023 and an equity ratio of 52.5%. In New Mexico, we agreed to a rate increase of $62,000,000 Reflecting a ROE of 9.35 percent and an equity ratio of 54.7%. We also accelerated the depreciation life of our total coal plant to 2,032 Based on a ROE of 9.5 percent and an equity ratio of 52.5 percent, we anticipate commission decisions in these cases later this year. In July, we filed a Colorado Electric rate case seeking a net rate increase of $343,000,000 Based on ROE of 10% and an equity ratio of 55.6% and the 2022 forecast test year, The rate case is largely driven by capital investment and we anticipate a commission decision in the spring of 2022.

Speaker 4

We We also have a pending Texas electric rate case. We're seeking a net rate increase of $74,000,000 after reflecting fuel savings and PTCs from The request is driven by capital investment and is based on ROE of 10.35 percent and an equity ratio of 54.6%. As far as future filings go, we anticipate filing a Minnesota electric rate case in November with interim rates going into effect in January of 2022. We also plan to file a Minnesota Natural Gas Case later this year. With that, I'll wrap up with a quick summary.

Speaker 4

We received commission approval for the Mustang solar project in the Elite Wind PPA repowering buyout. We provided an alternative to our Minnesota resource plan, will deliver 85 percent carbon reduction by 2,030, provide transparency into our long term opportunities. We reached constructive rate case settlements in Wisconsin, New Mexico and North Dakota. We filed our Colorado electric rate case. We reaffirmed our 2021 guidance range.

Speaker 4

And finally, we remain confident we can deliver long term earnings and dividend growth in our 5% to 7% objective range. Now before we open up for questions, I'll turn it over to Ben for some closing comments.

Speaker 5

Well, thanks, Brian, and good morning, everyone. It's really been an amazing decade as CEO and before that as CFO. I'm very proud of the tremendous accomplishments we made as a company. I'm extremely proud of the incredible efforts and contributions our employees make in serving our customers and our local communities. I've also really enjoyed the interactions I've had with our investors and the financial community.

Speaker 5

I appreciate your interest in the company, your feedback and your suggestions. I'm going to miss that. It's really hard to retire from a role that I truly enjoyed, but I'm leaving the company in great hands. I know that Bob, Brian and the rest of the management team will continue to do an outstanding job leading Xcel Energy well into the future. I also plan on attending EEI this fall, and I look forward to seeing a lot of you there.

Speaker 5

So thank you all. And with that, operator, let's open it up for questions.

Operator

And we'll take our first question from Jeremy Tonet from JPMorgan.

Speaker 6

Hi, good morning. Ben, congratulations and best of luck moving forward.

Speaker 5

Thank you very much. Appreciate it.

Speaker 6

Just want to start off, I guess, with the renewables. And if you could expand, I guess, on how the pipeline looks for incremental renewables after the Sherco and wind repowering? And also, I guess, how local

Speaker 2

Hey, Jeremy, good morning. It's Bob, and thanks for the note this morning. We filed resource plans in both Colorado and in Minnesota. And as we work through those proceedings, I'd say by Q1 next year, we'll have real visibility into the outcomes of both of those and we'll move forward with what we'll call resource acquisition plans, where we propose, We propose projects and we solicit input from others for projects that are coming. I think if your question is around where we are in the R and R recovery plan in Minnesota in particular, The 4 wind repowerings were approved in December.

Speaker 2

The Elite repowering project was just approved In June, and we still have the Sherco Solar project that is proposed that we'd hope for approval by end of this year or maybe early next.

Speaker 6

Got it. That's helpful. Thank you. Maybe just pivoting over to Yuri, If we could just want to see the early stages of your winter storm recovery proceedings, how they're progressing and what changes if any do you expect operationally Going forward.

Speaker 2

Sure. So we have approvals in, I think, 4 of our states at this point and we're still working through proceedings and three others. I think the largest of those is both Minnesota and Colorado we're still working through the proceedings on as well as Texas. Our expectation is we acted in accordance with all of our regulatory regulations, prior policies and And so we do expect a full recovery of our incurred costs on Winter Storm Yuri. I think looking forward, Colorado has opened a docket to explore alternate mechanisms for us and others in the state to look at and they've proposed an alternative.

Speaker 2

We've commented it's a NOPR, so they're looking for inputs and we've commented to the NOPR. And we expect some resolution and some hearings in that process In the 3rd or Q4 of this year.

Speaker 6

Got it. That's helpful. I'll leave it there. Thank you.

Speaker 2

Thank you.

Operator

And we'll take our next question from Julien Dumoulin Smith from Bank of America Securities.

Speaker 2

Hey, Julie. Good morning. Hey, good morning.

Speaker 3

Hey, morning and congrats, Ben. It's been a pleasure. I will see you soon, I'm sure. But, if I can absolutely, I look forward to seeing you at EEI. If I can pivot to the transmission side in brief here, You all talked previously about this Colorado being potentially expanded over time.

Speaker 3

Obviously, you're looking for the Stay here to be approved, as you talked about in the prepared remarks. But can you talk about subsequent co ownership, partners, Just ultimately expansion of what you guys have underway here, if there's been any progress?

Speaker 2

Yes, certainly happened to. Yes. But before I get started, actually, I think that congratulations are in order for you and Bea and look forward to your pending nuptials next year. So congrats.

Speaker 3

Thank you so much. I sincerely appreciate that.

Speaker 2

Hey, on transmission, particularly in Colorado, we put forward What we think is a pretty progressive plan, Julian. Historically, we'd have generation be put forward first and then You follow-up with the transmission that's necessary. I think where we are and certainly in Colorado and where I think a lot of the country is actually is, is we need to build So in Colorado, we've put forth what we call the power pathway. That's largely, I'll call it, a superhighway of transmission lines through the Eastern Plains Colorado to connect the good solar and wind resources of the eastern half of Colorado with the load centers Predominantly in Denver and in the I-twenty five corridor. So that path along with the Colorado Resource Plan Progressing in parallel, 2 separate dockets, but in parallel, we expect resolution on both of them by late this year, probably early next year.

Speaker 2

And your comments on we've got a base plan and I call that sort of we're going to build the freeway, but we also have to build the on and off ramps And things like that. So while the base plan for the freeway itself, I think is about, and Brian, correct me if I'm wrong, somewhere in the 1 point $7 ish billion range. But we need to build voltage and VAR stability. We need to build once we find out Exactly where the generation resources are going to exist, then we need to build support along that freeway for how those Transmissions will integrate with the broader bulk electric system. And that's sort of where that incremental and variation in sort of the base plan Versus the other things that we'll need to do once we identify exactly where the resources are.

Speaker 2

So like I just mentioned to Jeremy, We'll conclude the Phase 1 of the resource plan in Q1 of next year and that point will go into resource acquisition. And that's where we've picked the resource in exact locations and then we can have a better, more granular answer to your question on what's the total pathway cost Above and beyond sort of the base system. Does that make sense?

Speaker 3

Yes, totally. I get it. Excellent. And if I can pivot to a slightly related question, if you don't mind. What are you seeing in terms of the impacts across your portfolio here visavis inflation, cost structure, Just as you guys look at the renewable build here, and perhaps just some of the timing on, for instance, Sherco here, Perhaps not necessarily related, but just as you think about some of those decision making trends?

Speaker 4

Yes. Hey, Julien, it's Brian. Good to hear from you. Yes. Certainly, we're seeing inflation.

Speaker 4

If you're just looking at the headlines, right, we're not immune to some of the headlines that everyone is seeing. For us, it's Inflationary pressures of commodities such as steel, copper in labor, but really we think it's transitory in nature. And I think really it's I think we found that it was pretty easy to shut down the economy and it's a lot more challenging to restart the economy from the supply chain and the Supply chain and the demand that has followed the shutdown of the economy. Something that we are focused on and practically managing from a supply chain perspective. So I don't Any significant impacts as we sit here today.

Speaker 4

Now specifically, if I want to touch on a couple of the major projects we have in flight, Now the 4 wind repowerings that we have, we feel really good about those in Minnesota. Now those are partial repowering. So I think blades in the inside of the nacelles are not Placing the steel towers, so we're not facing steel price risk there. And so we don't really face any significant inflationary pressures on those. So feel good about that.

Speaker 4

The large scale solar farm that we have in front of the Minnesota Commission, I'm sure everyone's aware of the solar panel pricing that has been increasing this year. But we look at that, we have a lot of flexibility in terms of construction and when we place that in services in terms of what year. So we feel really good about that project too. So overall, something we're certainly focused on and watching, but don't see any real impacts as we sit here today.

Speaker 3

Awesome. And just to clarify from your guide here, the shift in O and M is offset by the gas sales, just super nuanced there For Tony

Speaker 4

White. The shift to no, I would say gas sales, certainly good to see an uptick in gas sales from 0% to 1%. But Remember, gas is a pretty small piece of our business, so a 1% change in gas margins about $4,000,000 So I wouldn't say it necessarily fully offsets it.

Speaker 3

Okay. Fair enough. Hey, thanks again, guys. We'll see you soon. Thank you.

Speaker 3

Appreciate the question.

Operator

And we'll take our final question from Ryan Levine from Citi.

Speaker 2

Thank you. A couple of

Speaker 7

questions, one on transmission to follow-up on some of those points. It looks like in your Presentation, you highlight $300,000,000 of CPCN for that project. It looks like previously there was a $250,000,000 Number that was out there for the May Valley Longhorn expansion, are you seeing cost inflation On that particular project or is there another dynamic that may cause the change in number?

Speaker 2

No, look, I think we're still in very early innings on sort of exact routings and pathways. I wouldn't read too much into that, Ryan.

Speaker 7

Okay. I mean, are there a lot of different pathways that you're no pun intended around the way that that project can get built out? Or is it fairly visible from your mind in terms of how the project will be constructed?

Speaker 2

Well, look, I think we haven't gone through local permitting. We've got a lot of just local land processes we'll have to go through. So And we're early stages in engineering of that project. I think we felt it was really important to make sure that the Transmission and the generation proceeded in parallel. And so I think that as we go through time, as we get better engineering, as we get better insight into the land processes, Those routes will be very specific.

Speaker 2

There's still a pretty big range of capital expenditures for that. A lot of it's based on final routing and Final land approval costs. So like I said, I wouldn't read too much into that particular lag extension.

Speaker 7

Okay. And then lastly, in terms of some of the recent legislation in Colorado pertaining to gas, Are you anticipating any material impact to your business around some of the recent SB-two thousand one hundred and forty six and twelve thirty eight and twelve eighty six

Speaker 1

Can you repeat those again, Ryan?

Speaker 2

That's quite a litany of bill numbers. Let me just I'll talk a little bit about the clean heat plan in Colorado and maybe even to a parallel path, the Innovative Gas Act That was also approved here in Minnesota. Look, I think both of those bills recognize that we're in early innings Of lowering our customers' emissions from the gas LDC businesses and not dissimilar to what we went through in the mid-90s with renewables. I mean, the technology is nascent and the solutions are relatively expensive, but we also recognize we need to start somewhere. And so I think that the legislation in both places recognize those facts.

Speaker 2

And look, we are we will do pilots, we'll introduce Technology, we'll look at beneficial electrification and energy efficiency programs, all tools that maybe aren't Readily available under the current regulation schemes today, but these pieces of legislation allow for some of that innovation to happen on the gas LDC side. I think the legislation also recognizes it's really important to respect the reliability and affordability, and I think each state Addressed it slightly differently, but there's a cap in Colorado and regulatory approval for plans. And in Minnesota, similarly, their Regulatory approval for the pilots that make sure that they're cost justified and beneficial for our customers as well as we think about Lowering their emissions profile from the gas LDC business. So we were very active In both of those pieces of legislation and we are working with the regulatory agencies to look at How we write the regulations for those pieces of legislation and then we'll be active as we put proposals forward to help our customers reduce their footprint Emissions profile in each state. So yes, I think there's opportunity here, and we're going to continue to work with

Operator

And it looks like we have a question from David Peters from Wolfe Research.

Speaker 8

Yes. Hey, good morning. And I'd echo the congrats to Ben. Just one question for me. As you guys Make progress working through your IRPs in Colorado and Minnesota and then the transmission opportunities as well.

Speaker 8

It just seems like there's a lot of incremental CapEx opportunities above some of the more basic blocking and tackling, just how would you kind of characterize that within the context of the kind of 5% to 7

Speaker 2

This is Bob. I guess similar to Julian, I might have to start with congratulations to you for your recent nuptials yourself. So We have 2 of those on the call today.

Speaker 3

Thank you.

Speaker 2

In terms of incremental capital,

Speaker 3

yes, I

Speaker 2

think there's some projects Still out there that we're working through regulatory processes on, the largest of which is the SureCo Solar, which we talked about. I think longer term, we've got base proposals on our resource plans and for our transmission planning. Stuff that's not included in the near term is obviously MISO and SPP transmission expansion And those are generally outside of our 5 year forecast, but definitely in sort of a 10 year vision forecast. And then we expect our base rate based growth plan to be right around 7%. And so any incremental, I think there's a couple of incremental projects that could take us above that.

Speaker 2

I think We'd expect to keep our 5% to 7% earnings growth rates and we can reevaluate that regularly and we do. But I think right now we're just comfortable with being at the high end of our guidance range.

Speaker 4

Yes. And Dave, I'd just add to that. I think what you hear from us, what we're really focused on doing is Providing our investors with that long term transparency as we work through our resource plans in Minnesota and Colorado this year, looking at That's almost 10 gigawatts renewables by 2,030 between those two, plus the associated transmission that comes in Colorado and what we No, could expect to see out of MISO here is giving investors that transparency into extending and really feeling good about the long term growth rate, not This 5, but through talk about it through the decade. So something we're focused on.

Speaker 8

Great. Thank you for the color.

Operator

And we have a question from Paul Patterson from Glenrock Associates.

Speaker 9

Hey, good morning, Paul. Hey, good morning. Congratulations, Ben.

Speaker 3

Hey, thanks. Absolutely.

Speaker 9

So just there have been some comments out of Colorado from some of the commissioners Regarding rates and sort of the cumulative impact, etcetera. And you mentioned on the call, I think that you don't see any significant You think that the inflation issues that we have currently are sort of transitory. But I'm wondering in terms of your goals, and I think there's pretty much to be somewhat below the rate of inflation. Are we still on track with that with respect to your outlook in the various jurisdictions? Has there been any change in that because of The transitory impact or anything else that we should think about?

Speaker 2

Hey, Paul, it's Bob and I'll let Brian chime in if I miss anything. But In particular with respect to Colorado, I think that our customers bills in Colorado are about 35% less than the national average and have been basically flat for the past 5 years. And although we filed A rate case out there, we expect even after the rate case, it's still going to be 25% below the national average.

Speaker 1

If you have everything we ask You've got everything

Speaker 2

in the case that we asked for, it will be 25% below the national average. But your longer term question is, do we think we continue this Transition to a cleaner energy economy cost affordably, the answer to that is yes. And The impacts that we're seeing for inflation, we would say are still relatively transitory. I think some of the macro economists would sort of agree with that comment. We think that we can transition our states at less than the rate of inflation over the next 10 years to an 80% carbon reduction.

Speaker 2

Colorado in particular will be 85 percent carbon reduction less than the cost of inflation. So I think our Strategic thesis holds and we don't see this current spad of restarting the economy as derailing our longer term plans.

Speaker 4

Yes. And I would say, you see that in our resource plans, right, where we kind of show the bill impacts over the next decade in both Colorado And we do those we run those resource plans in the cases we've put forward to the commission with current tax policy. And there's a lot of Discussion in DC about a long term extension of federal tax credits around clean energy and we certainly support, Fully support center widened's Clean Energy for America Act. And when we run that analysis, that's really good for our customers in terms of those Extension of credits only brings down the cost as we make this transition.

Speaker 9

Okay. And just your long term just for obviously, it could change, but your Long term inflation expectations are around 2% still, is that right?

Speaker 4

Yes, longer term.

Operator

And we have a question from Ashar Khan with Berenbergen.

Speaker 10

Ben, I just wanted to dial in to congratulate you. We've known you for a long time and The company did wonderfully well and hope Bob can continue in that space. So congrats again. If I can ask one industry question, I know you've been heading the EEI and trying to get the nuclear PTCs Across the board in the legislative front, could you give us any update where we stand on that endeavor?

Speaker 5

Well, it will likely be part of the $3,500,000,000,000 budget reconciliation process. And there's a lot of moving parts with that. And the first part of that will be just giving the budget resolutions to the various committees, And that will establish how much funding those committees have to pursue broad topics, which we believe will ultimately include the nuclear PTC. We'd like to see that in August. And then, of course, the actual legislation would take place in the fall.

Speaker 5

Again, there's a lot of moving parts. As you know, it's a fifty-fifty Senate and a very narrow margin in the House. So It's a balancing act, but we are definitely advocating for that. We're advocating for, as Brian mentioned, Senator Wyden's bill, we think direct pay, PTC for solar, These are things that are going to really help the clean energy transition be affordable for our customers and the industry in general. And I look forward to seeing you perhaps at EEI.

Speaker 10

Certainly. Certainly. Thank you so much.

Speaker 5

Got

Operator

it. And it appears we have no further questions at this I will turn the conference back over to Brian Van Ael, CFO.

Speaker 4

Yes. Thanks all for participating in our earnings call this morning. Please contact our Investor Relations team with any follow-up questions. Thanks, everyone.

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