Entergy Corp (ETR) — Q3 2021 Earnings Call Transcript

Good morning. And thank you for joining us. We will begin today with comments from Entergy's Chairman and CEO, William Renault, and then Drew Marsh, our CFO, will review results. In an effort to accommodate everyone who has questions, we request that each person ask no more than two questions. In today's call, management will make certain forward-looking statements. Actual results could differ materially from those 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 Denault.

Thank you, Bill. And good morning, everyone. Today, we're reporting quarterly results that keep us firmly on track to meet our financial commitments. Third-quarter adjusted earnings were $2.45 per share. With good visibility into the rest of the year, we are narrowing our 2021 guidance range to $5.90 through $6.10 per share and expect to achieve 2022 and 2023 results in line with our outlooks. Further, we are extending our outlooks to include 2024 and see our steady predictable growth of 5% to 7% continuing through this period. Additionally, we achieved the milestone of raising our dividend by 6% and aligning with our earnings growth. This happened on the schedule we previously communicated and represents another commitment met. We have developed a more resilient business and despite $65 million of non-fuel revenue losses in the third quarter due to Hurricane Ida, we are maintaining our financial commitments. Our resiliency provides stability that is valuable to all of our stakeholders, particularly customers and owners. The quarter was heavily impacted by Hurricane Ida, which made landfall as a strong category 4 hurricane bringing powerful destructive winds across New Orleans, Baton Rouge, and beyond. Our coastal communities were particularly hard hit by both strong winds and storm surge. Hurricane Ida disrupted the lives and businesses of many of our customers and communities, and Entergy was there to help when they needed us. We gathered a restoration force of 27,000, our largest ever. Representing Entergy employees, contractors, and mutual assistance crews from 41 states across the country. I would like to take a moment to personally thank our employees and the crews who answered the call to come help restore power to our impacted customers. Further gratitude goes to our employees who worked restoration despite their own homes being damaged by Ida. They epitomize what it means to put our customers first. I never cease to be amazed by the dedication and effectiveness of the many restoration workers who step away from their lives for weeks at a time to help our customers and communities get their lives and livelihoods back up and running again. Despite Ida's winds creating significant damage and destruction across our power grid, with close to a million peak outages, our team restored customers at a rapid pace. In just over a week, we had roughly half of all customers restored. Metro areas like New Orleans and Baton Rouge saw restoration essentially completed by day 10. Within three weeks, more than 98% of all affected customers were restored. And it's easy to lose sight of the fact that this restoration was successfully accomplished while dealing with the effects of the pandemic. Entergy also helped our customers and communities throughout the recovery process by deploying 165 commercial scale generators to power critical community infrastructure like medical facilities, gas stations, grocery stores, municipal water systems, and community cooling centers in advance of power being restored. In addition to restoration work, Entergy's employees contributed countless hours to their communities, and Entergy shareholders committed $1.25 million to help affected communities rebuild and recover. While power has been restored to customers who can safely take it, our job is not finished. We are committed to minimizing the effects of Ida on our customers' bills. We will work with our regulators to seek securitization of Ida storm costs, which is a proven and low-cost means of recovery. Further, we are coordinating with key officials and stakeholders, including Louisiana Governor Edwards, the City Council of New Orleans, Louisiana Public Service Commission, Louisiana congressional delegation, and the Biden administration to seek federal support that could offset the cost of our customers for Ida and the 2020 storms. There's widespread alignment amongst state and local leaders on the compelling case that Louisiana has to obtain federal support. We are fully aligned with this perspective. To be clear, any federal funding that Entergy utilities obtain will reduce the customer obligation dollar for dollar. We're also committed to mitigating the impacts of future storms. Entergy has made significant transmission and distribution investments—nearly $10 billion over the last five years—which made our system more resilient. We've seen those new investments perform well under the most challenging conditions. Wind damage to our transmission structures, for example, has occurred almost exclusively to older structures built to prior standards. It has become clear that major weather events of all types are occurring more frequently and with greater intensity. Hurricane Laura made landfall as the strongest storm to hit the Louisiana Coast since 1856. Then exactly 12 months later, Hurricane Ida hit with almost equal force. Our resilient standards and asset programs have never been static, and we've continued to evolve them. And as I mentioned, our investments are working as designed. However, the uptick in severity and frequency of storms is compelling us to take a fresh look at how we can make our system more resilient, including the pace at which we can achieve it. Even prior to Ida, we're actively deploying multiple options along our resiliency scale, particularly for our service area south of I10 and I12, which has the greatest exposure to hurricane-strength winds and flooding. Evaluating these resiliency options needs to be done under future climate scenarios. And we're taking into account important considerations, such as customer affordability and sufficiency of materials and skilled labor. This customer-driven investment will be significant, and we will work collaboratively with our regulators and other stakeholders to determine the optimal path forward. Coming back to the quarter, I would like to highlight that despite dealing with a major storm, the business continued to run well without missing a beat. We've made great progress in several open proceedings. First, Entergy Arkansas filed a unanimous settlement for its formula rate plan, and the Arkansas Commission has agreed to cancel the hearing and take up the settlement based on the filed testimony, which is positive. New rates in Arkansas will be implemented in January. In New Orleans, we recently implemented rates at the level that reflected all adjustments proposed by the council's advisors. So there are no further proceedings there. We are also pleased to note that Entergy Arkansas reached a settlement with key customers of its green promise tariff filing. If approved, this tariff will enable us to offer green solutions to meet the growing sustainability demands of our customers. And we're making progress on other open proceedings. In Entergy Louisiana, its FRP rates went into effect. Entergy Arkansas received approval for the West Memphis solar project. Entergy Texas reached an unopposed settlement on its 2020 storm costs filing. And Entergy Texas also filed for approval of the Orange County advanced power station. The Louisiana 2020 storm recovery and securitization process remains on track. We continue to make progress on decarbonizing our fleet. We've announced 5 gigawatts of solar in our supply plan through 2030, with a goal of doing more. An update to our supply plan in renewable growth will be provided next week at EEI. In addition to helping meet decarbonization goals, the cost of renewable resources relative to conventional resources continues to trend favorably. Renewable resources provide an important edge against rising and volatile natural gas prices. We'll provide more details around our latest resource plans at EEI. Last quarter I discussed ways in which Entergy can help our industrial customers meet their sustainability goals. While many have expressed long-term goals like net zero by 2050, even more have developed shorter-term interim goals that will require action by the end of the decade. Clean electrification is one of several important tools that our industrial customers have as means to achieve their objectives. Clean electrification provides a great opportunity for load growth and we will require significant capital investment in renewable generation, transmission, and distribution. The load growth that comes with electrification will help pay for incremental customer-centric investments. We'll have more to discuss regarding the opportunity we have to help our customers meet their sustainability objectives next week at EEI. While it is important to discuss these longer-term growth opportunities, I want to ensure we don't lose sight of the very solid base investment plan that we have in front of us. Over the next three years, we have a $12 billion capital plan designed to deliver reliability, resilience, improved customer experience, and environmental and cost efficiency benefits to our customers. When paired with our well-defined regulatory constructs, this plan will deliver 5% to 7% adjusted EPS growth for our owners over the next three years. That's a very solid base plan. Beyond this strong foundation, these other opportunities in renewable generation, clean electrification, and resilience acceleration will serve to extend our runway of growth throughout the rest of the decade. We look forward to continuing the conversation with you at the EEI Financial Conference. Now, Drew will review the quarterly results.

Thank you, Leo. Good morning, everyone. Today we're reporting solid results even with the challenges from Hurricane Ida. Summarized on slide five, our adjusted earnings per share was $2.45, slightly higher than a year ago. We continue to execute our strategy and we are firmly on track to meet our commitments. In fact, with three quarters of the year behind us, we are narrowing our guidance range to $5.90 to $6.10. We're also affirming our outlooks and extending the outlook period through 2024. We recently raised our dividend to align with our adjusted EPS growth rates. Turning to slide six, our investments to improve customer outcomes continue to drive growth. That includes rate changes to recover those investments, as well as associated new operating expenses. Industrial sales were 10% stronger than a year ago. We saw increases across most segments with the largest increases in primary metals, petrochemicals, transportation, industrial gases, and chlor-alkali. This reaffirms the strength of our industrial customer base. In a world with supply chain constraints and higher energy prices, our industrial customers remained strong and competitive. These industrial sales were strong despite Hurricane Ida. Overall, across all classes, we estimate that third-quarter revenues were approximately $65 million lower as a result of Ida. The impact of Hurricane Laura on third-quarter 2020 was approximately half of that. Other O&M costs were higher this quarter as planned. This is partly due to higher costs for distribution operations, including reliability costs, higher expenses in our power generation function, and higher health and benefit costs. Moving to EWC on Slide seven, you'll see results were slightly lower than a year ago. The key driver was the shutdown and sale of Indian Point. Operating cash flow for the quarter, as shown on Slide eight, was about $300 million higher than last year. The increase is due largely to improved collections from customers, including collections associated with investments to benefit customers and Winter Storm Uri. This was partially offset by expenditures related to higher natural gas prices. Slide nine summarizes our credit and liquidity. We expect to maintain our current credit ratings and we continue to expect to achieve targeted rating agency credit metrics as storm restoration spending is securitized and we retire storm-related debt. We'll take a minute to discuss our balance sheet, beginning with a quick update on Hurricane Ida on Slide 10. Over the past several weeks, we've refined our cost estimates and shaved $100 million off the upper end of the range. The total cost is now expected to be $2.1 to $2.5 billion. We've also updated our estimate of the non-fuel revenue loss to $75 to $80 million, the lower half of our previous range. While our net liquidity, including storm reserves, remains strong at $4 billion, we are also working to ensure timely storm cost recovery. That starts with the successful restoration effort and will proceed through two avenues. First, Entergy Louisiana amended its 2020 storm filing to request an additional $1 billion to provide early liquidity for Hurricane Ida costs. In Texas, we reached a settlement on the 2020 storm costs filing, and that is now before the PUCT. Second, we have improved the efficiency of our storm invoice processing to accelerate our filings and ultimately cost recovery. We plan to complete financing for the 2020 storms by early next year and Ida by the end of next year. Our work isn't over; we will continue to identify ways to further reduce business risk. As Leo highlighted, we look forward to a conversation with our customers, retail regulators, and other stakeholders about how we best accelerate and implement a strong resilience plan. We have already hardened more than half of our critical transmission and distribution structures along the Gulf Coast to standards implemented after Katrina and Ida. We continue to move the bar higher by reevaluating current standards using the latest weather data. In addition, a comprehensive resilience plan needs to include the strategic placement of assets to allow higher-risk communities to recover more quickly. For example, microgrids, distributed energy resources, and the deployment of generators Leo highlighted to certain critical customers. The aftermath of storms could be very helpful in supporting communities as they recover. We'll go into more depth on this in our conversations at EEI. In addition to physical resilience, our regulators know the importance of a healthy credit at the operating companies to support customers. They have put in place time-tested cost recovery mechanisms such as securitization as storm reserves to support that need. We are fortunate that for recovering the 2020 and 2021 storm costs, we're starting with some of the lowest rates in the country. We have significant electrification growth potential that could help pay for incremental customer-centric investments and future storm costs. All of these will support our credit as regulators and key stakeholders align with us around a strong resilience acceleration plan. In addition, we continue to execute on the exit of EWC and we are less than a year away from completing our plan. The resulting improvements were recognized by S&P last fall through our improved business risk profile and by Moody's just this past quarter through changes to our rating thresholds. Those changes remain in place and our ratings reflect future storm risk. As a result, we were able to reduce our 2021 to 2024 equity needs. Combined with our ATM transactions, our future equity needs are more than 50% lower than the $2.5 billion communicated on Analyst Day last year. Moving to slide 11, we have a clear line of sight on the remainder of the year. For the third year in a row, we are narrowing our adjusted EPS guidance, in this case for 2021 to $5.90 to $6.10. We're also affirming our longer-term outlooks of 5% to 7% adjusted EPS growth and extending to 2024. Our confidence in our solid base plan continues to grow. That key expression, that confidence is the dividend. For the last several years, we've discussed our goal to align our dividend growth with our adjusted EPS growth. Our Board of Directors recently declared a $0.06 increase in our quarterly common dividend, which is now $1.01 per share. That's a 6% increase as planned. We expect to continue this growth trend going forward, obviously subject to board approval. That's good news for our owners who provide the capital needed to meet our customers' evolving needs. Today, we're executing on key deliverables and we have a solid base plan to meet or exceed our strategic and financial objectives. In less than a week, Rod and I will be able to meet with many of you in person for the first time in almost two years. We'll provide our typical updates on considerations for next year's earnings expectations and will provide our preliminary three-year capital plan, including a positive update on our expectation for renewables. We will also talk about the significant long-term customer-centric investments beyond our current outlooks from renewables, clean electrification, and acceleration of our system resilience. We're excited about these opportunities ahead and look forward to talking to you about all of it at EEI. And now the Entergy team is available to answer questions.

Hey! Good morning guys. How are you doing?

Good morning, Shar.

I have a quick question to start. Leo, if it's alright, could you provide some insight into the regulatory complaints from New Orleans? Do you have an understanding of how the council plans to move forward at this stage? They are seeking input on everything from operational responses to the eventual ownership of the assets. Do you foresee a situation where you wouldn't own the assets, or could there be a negotiated solution where the city allows for incremental funding, like more transmission interconnections, financed by E&O customers, to address their concerns?

Thanks, Shar. I would say, first of all, obviously, what we've been doing recently with the Council is we've got through the formula rate plan, got those rates in effect. Both the council as well as the LPSC and others, as I had mentioned, are aligned on approaching the federal government for offsets to customer costs through potential CDBG funds and even in the future in terms of storm hardening as it relates to infrastructure. That's really been where we are in terms of what's been going on recently; all focus has been really on how do we get the next steps done in what's logical progression to support the credit. As it relates to those other items, they are still out there, and we plan to cooperate with the Council as they go forward. In most of those instances, we are still wanting to hear from them in terms of what their objectives are related to whether it's the ownership structure or what have you. So those are processes that they began, and to the extent that they have objectives, we will work collaboratively with them to meet those needs. And we think that however it works out, it will work out fine for us and for them.

Just lastly, for me, and then I know you sort of touched on that a little bit around your prepared comments, and it's been obviously an immediate question with investors around the storms and maybe the expenses that were incurred. Could we just maybe get an update on some of the other mitigating factors for customer bill headroom? We obviously talked about volumetric growth and the macro backdrop, but there is obviously, and also there's work you're doing with the LPSC in New Orleans to get federal support. But how are you, I guess, thinking about other charges rolling off, and potentially having the bill headroom to continue investing in capex, especially as we're seeing your 2024 numbers in line with the 6% midpoint growth in 2024? So, could we assume this run rate remains healthy despite some of the near-term concerns around bill pressure and escalating storm issues?

This is Drew. I'll start by addressing the first point, and then Rod and Leo can add their insights. We're focusing on the securitization process in Texas and Louisiana due to the recent storms. Additionally, we have some existing securitizations that will be rolling off, including costs related to the ICC and Hex's that should be resolved next year. Similarly, in Louisiana, costs from Hurricane Ike and those from Isaac are expected to roll off around 2024, which can alleviate some pressure on the securitization costs. Regarding natural gas prices, there has been extensive discussion on the topic. Many are facing rising natural gas prices, which emphasizes the benefits of our investments in high-efficiency combined cycle gas turbines (CCGTs). The diversification of our fleet for nuclear also strengthens the case for solar energy. The forward curve for natural gas is somewhat backwardated, indicating lower prices ahead. Our internal forecasts predict prices will be higher than the NYMEX curve by 2024. We don’t see this as a long-term issue. It is a challenge for our customers currently, particularly following Winter Storm Uri and the subsequent price spikes, but we have recouped those costs and are progressing. Lastly, regarding growth capital, we see significant investment potential in three main areas: enhancing resilience, which could help avoid future securitization costs; increasing our focus on renewables; and managing fuel costs and operational maintenance. Our capital plan has seen considerable adjustments, shifting from future CCGTs to renewable sources, which is filling the financial space we need. Also, the clean electrification initiative that Leo referred to will help generate incremental sales and create opportunities for further investments. We believe these factors can all coexist and even accelerate in the coming years.

Got it. I think that was helpful. Thank you for that. I appreciate it, guys. So I'll leave it at that.

Thanks, Shar.

Hi, this is actually Brandon Travis on for Jeremy. Thanks for having me. First question, I'll follow up with the second one. Can you just comment on the Build Back Better framework and the implications that may have on Entergy in its current form? And then just particularly as it relates to nuclear, hydrogen, renewables ahead of your plan refresh at EEI.

Sure, sure. There's a lot in there. They certainly, as we look for support for things like hydrogen and support for existing nuclear, we view all of that as positive towards our ability to keep a low-cost profile of the future benefits associated with our capital plan. I'm cautiously optimistic that there will be infrastructure bills that will be passed. Every day, there's new news one way or the other in terms of how that's going. But as you know, we are pretty well-positioned in the hydrogen space. We have a significant fleet of existing nuclear plants, and we're deploying a lot of new renewables. So all of that focus on tax credits, particularly production tax credits, is really supportive of what we're already planning on looking forward. I know there's a lot of devil in the details, but we're excited about the hydrogen space. As I mentioned in my remarks, we made the filing associated with getting the Orange County advanced power station, which will be hydrogen capable, approved in Texas with all the hydrogen infrastructure around us. That will be very important for not only us but for the industry as we look to utilize long-duration storage; it's a critical factor in anyone's ability to get to net zero by 2050. I'd also say that this is all well supported by industrial gas customers in our service territory, as they're all exploring green, blue, and pink hydrogen as well. And so I think specifically, we will have to see exactly where everything ends up if it gets done, but we see it as nearly a way for us to accelerate what we're already trying to do.

That's helpful. Thank you. And then we are curious about what drove the delay on the Sunflower solar project. If you could say that it was maybe supply chain-related, or if there's anything else specific that you can point to there. Thanks.

Yeah. It wasn't really supply chain-related; it was just some onsite challenges that our partner ran into. But we expect it to be constructed early next year, and then we'll proceed on with it.

Thank you.

Good morning team. Thanks for the time. So just first off, I'll leave some of the bigger details for EEI, but just following up here on the opportunities around renewables and the reconciliation ability. To the extent in which direct pay happens here, just how meaningful could this be? Especially given the prospective acceleration that you all are talking about coming with ya here?

You're talking about refundable PTC?

Yeah. The refundability and how that improves your credit metrics?

Yeah. That would certainly help and also potentially change some of the investment profile that we have. Because right now we're assuming tax equity partners for all of our own transactions to facilitate the investment tax credit today. To the extent that there are refundable PTCs that are available and it's more economic for our customers, then I think that we would be moving more towards 100% ownership. So something that looks like 70%, 75% ownership of each facility.

Got it. Right. So it's both a capital opportunity and credit metric enhancing, or you're saying it's not decisively credit-hitting because of the higher capital and you haven't updated the equity component yet either?

Yes. It probably helped a little bit, but I don't know if it's going to—it's more neutral. I would think for us right now.

Got it. Okay. That's good color. Thank you. And then separately, a little bit further afield here. Any progress on transmission here in Siri? I know that's been out there for a bit. Obviously, we've got some others in the sector resolving or settling their issues here. Any thoughts?

This is Rod. Good morning. Regarding the regulatory situation, the answer is no. The ongoing litigation matters, as we have mentioned before, do not have a specific timeline. We are hopeful that by the end of this year or the beginning of next year, we will start to see some resolution, likely beginning with the ROE cap structure issue. However, there are no significant changes at this time since it's all under FERC's jurisdiction.

All right, excellent. I'll look forward to EEI to fall further, guys. Customer OCC.

Thank you.

I will cede it back to someone else. My questions have been already asked and answered. Thank you.

Thank you.

Good morning.

Morning, Steve.

By the way, Rod, my team is putting in a good word for the forest. We've got two graduates. So just first on the support from the federal government. Could you talk a little bit more about the path to this? Are there certain bills? Is this just going to be an executive action? Can you elaborate on how we'll learn more about this?

Sure. So I'll start and let Rod jump in because Rod has actually been down this path before post-Katrina as it relates to the CDBG funds we require for New Orleans. As you know, Governor Edwards has made an appeal to the government for funds to support recovery for a variety of reasons, as it relates to the 2020 storms and Hurricane Ida. In those requests of the administration, he's put in about $1.2 billion for utility restoration offsets for our customers. The process has been for us to work with our congressional delegations, the LPSC, the state council, and the governor to convince effectively the federal government to appropriate dollars that would go through HUD to the state in the form of community development block grants. We're also positioning for HUD to provide a vital opportunity for a waiver so that the governor can allocate those dollars to investor-owned utilities in addition to munis and co-ops and housing and other things that obviously are very, very important. We're working through that process right now. A lot of us have spent time with our delegations. We've spent time at the White House. We're spending time with agency secretaries. All of that is in place to try and work toward offsetting costs associated with not only Hurricane Ida, but this would also go back to 2020 storms, which was also part of the Governor's request.

Yeah. And I guess the only thing that remains uncertain is the timing. Just like I made reference to FERC and some of the series things before, there's no specific timetable for the administration, Congress, or HUD to act on the Governor's request; it's now in their hands. I think the most significant development from our vantage point is that we have clear alignment amongst the delegation and expressed support from the White House. The objective of offsetting on a dollar-for-dollar basis the regulatory compact impact of storms on customer bills is something we highly desire. There's no lack of alignment around the desire to achieve that, so that part we've been able to close the gap on quicker than in prior storm disaster events. Now comes the ultimate decision-making process of allocating those funds to the states so that the governor can act. The timeline is uncertain, Steve.

Okay. You mentioned the focus on improving resiliency. I believe you noted that your newer poles have performed well during these two storms, but there may be a significant amount of replacement needed to achieve that. As we consider this, will it likely be addressed through a rate base mechanism or another method?

If we were to accelerate the capital program, the short answer is yes. Obviously, we are mindful of affordability in this conversation. But if we were accelerating a resiliency buildout, you would expect that we would seek some type of alignment from the regulators with some type of recovery rider that might operate outside of an existing FRP, or some adjustment to the FRP to accommodate this specific risk, assets kind of renewal and resiliency plans. It will play out on a jurisdiction-by-jurisdiction basis, as you know. But yeah, I think the answer to your question is yes—it would be a rate base play, but on an accelerated basis outside of normal ratemaking.

Okay. And then—that's helpful. And then just on—the as you mentioned, you lowered the equity financing need by more than half when you did the update a month or two ago. Just any better sense on timing and are you still looking at options other than just straight equity issuance to facilitate that?

Yeah, Steve, this is Drew. We haven't updated anything except what we've said before—that's through 2024. We also stated that we could accomplish all of this through the ATM program. That doesn't mean that we aren't looking at blocks or preferreds. Those are still out there. But we would look to do those opportunistically, depending on market conditions. We've been executing successfully with the ATM over the last several months. We will continue to do that unless, like I said, an opportunistic transaction comes along and we can execute with the block. But otherwise, we'll just continue to proceed with our ATM and we should get it done fairly quickly, would be my guess.

Okay, great. Thank you very much.

Thanks, Steve.

Good morning, guys.

Good morning, Jonathan.

Just a couple—from your comment, Leo, at the beginning, there's no outstanding issue with the New Orleans City Council; it was good to hear. I recall at one point they were prevented you from implementing the formula rate decision effectively last week, just to really move you beyond that, is that, or what were you saying?

Yes, Rod. Yes. The decision to implement the FRP basically obviates the conversation around any pushback on the proper operation of the Formula Rate Plan as we had settled with the Council. So that is a net positive in the continuing discussions with the Council.

Great. Thank you, Rob. Just more broadly, that started to be, I feel, some noise around the cost-benefit of Entergy's membership in MISO in some of your jurisdictions. I'm curious whether you have any perspective as to whether we might see any changes and what kind of—you know, what venue sort of four?

Jonathan, obviously, our participation in MISO today has been very valuable to our customers. We've saved about $1.75 billion normally over the period of time since 2014 when we joined in 2013. So certainly, there has been a benefit to MISO. Where we see our regulators taking issue, and we're supportive of them, is just making sure that we get the allocation of costs of major transmission projects done correctly. We want to ensure that the people benefiting from major transmission upgrades are the ones who actually bear those costs, rather than those who don't see any benefits. We're aligned with our regulators in that concept and theory. We're certainly not in a position where we're looking to exit MISO at any point in time. We entered MISO because of the benefits; we've obviously seen those benefits. As the world evolves, and as capital plans evolve, and the transition to renewables evolves, differently North versus South, we just need to make sure that we continue to evolve the cost allocation process in a thoughtful way, that's all.

Great. Thank you there.

Thank you.

Thank you, Kevin. And thanks to everyone for participating this morning. Our quarterly report on Form 10-Q is due to the SEC on November 5th 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 webpage as part of Entergy's Investor Relations website called Regulatory and Other Information, which provides key updates on 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.