Southern Company (SO) — Q1 2024 Earnings Call Transcript

Thank you, Rob. Good afternoon, and welcome to Southern Company's First Quarter 2024 Earnings Call. Joining me today are Chris Womack, Chairman, President and Chief Executive Officer of Southern Company; and Dan Tucker, Chief Financial Officer. Let me remind you we'll be making forward-looking statements today in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements, including those discussed in our Form 10-K, Form 10-Q and subsequent filings. In addition, we'll present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information we released this morning as well as the slides for this conference call, which are both available on our Investor Relations website at investor.southerncompany.com. At this time, I'll turn the call over to Chris Womack.

Good afternoon, and thank you for joining us for what is such an exciting time for our company. Monday, we announced that Plant Vogtle Unit 4 successfully achieved commercial operation. Units 3 and 4 now deliver more than 2,200 megawatts of reliable 24/7 carbon-free energy and are designed to do so for decades to come. With all 4 units operational, the Vogtle site is now the largest generator of clean energy in the country. I cannot be prouder of our team's perseverance and commitment to getting Vogtle Units 3 and 4 completed with the standard of quality clearly demonstrated by Unit 3's performance since it reached service last July. Along with our own team, success on this historic project required the hard work and dedication of tens of thousands of American craft workers and engineers, a committed group of co-owners and regulators who had the courage to support new nuclear when others did not. While it was not our mission when we embarked on this project and while it was at times an arduous journey, we have proven that new nuclear is achievable in the United States. With ever-increasing demands for carbon-free energy and the burgeoning demand for reliable 24/7 energy to support our digital economy and society, we believe our country will need more nuclear energy. So the importance of this project for Georgia and our nation cannot be understated. This is what making history looks like. These are the first new nuclear units built from the ground up in the United States in over 30 years. And we are proud to be the company that saw it through. Dan, I'll now turn the call over to you for a financial update.

Thanks, Chris, and good afternoon, everyone. For the first quarter of 2024, our adjusted EPS was $1.03 per share, $0.24 higher than the first quarter of 2023 and $0.13 above our estimate. The primary drivers of our performance for the quarter compared to last year were investments in our state-regulated utilities and weather that was less mild for our electric utilities than in the first quarter of 2023. This is somewhat offset by higher interest expense and depreciation. A complete reconciliation of our year-over-year earnings is included in the materials we released this morning. All our businesses experienced a strong start for 2024, driving our results meaningfully higher than our estimate of $0.90 per share. While there were several factors for this performance versus our estimate, one worth highlighting is the higher than expected weather-adjusted electricity sales in our commercial customer class. This was driven by a combination of our strong local economies as well as increased usage by many of our existing data center customers. Sales to data centers were up over 12% for the quarter compared to last year. Overall, weather-normal retail electric sales to all classes were 1.7% higher than the first quarter of 2023. Industrial sales are beginning to show signs of recovery following a soft 2023 with year-to-date increases led by the lumber and paper industries. The Southeast regional labor supply remains above pre-pandemic levels. Employment growth is strong and unemployment is low, averaging approximately 3% across our regulated electric jurisdictions. A favorable business climate and increased expansion of manufacturing is attracting new households to the Southeast, driving continued net in-migration and customer growth. Before turning the call back over to Chris, I'd like to highlight our most recent dividend increase. Last week, the Southern Company Board of Directors approved a $0.08 per share increase in our annual common dividend raising the annualized rate to $2.88 per share. This action marks the 23rd consecutive increase, and this will now be 77 consecutive years dating all the way back to 1948 that Southern Company has paid a dividend that is equal to or greater than the previous year. This remarkable track record remains an important part of Southern Company's value proposition. In one quick note, our adjusted EPS estimate for the second quarter is $0.90 per share. Chris, I'll turn the call back over to you.

Thank you, Dan. Our system performed extremely well, and that's a testament to our team's collective commitment to serving customers reliably across our business, especially as we meet the demands of the extraordinary growth that we're seeing. Particularly within our Southeast footprint, we continue to see strong economic development activity with first quarter investment announcements representing the second highest first quarter on record as our teams continue to work closely with our states and local development authorities to attract new businesses. This growth continues to reflect a diverse mix of sectors with recent announcements, including automotive suppliers, flooring and glass manufacturers, data centers and mixed-use developments. During our year-end earnings call in February, we updated our forecast to reflect projected retail electric sales growth that is accelerating to a projected growth rate of approximately 6% from 2025 to 2028. The underlying Georgia Power projected sales growth rate is approximately 9% over the same period. As we look ahead, we're encouraged to see the signs of incremental growth also materializing in Alabama and Mississippi. A little more than two weeks ago, the Georgia Public Service Commission approved a stipulated agreement among Georgia Power, the Public Service Commission staff and multiple interveners in the 2023 Integrated Resource Plan update docket. This approval affirms the need to quickly procure and deploy several thousand megawatts of resources to serve customers' rapidly growing electricity demands by the winter of 2026 and 2027. Georgia Power was also authorized to build and own a balanced collection of resources, including new natural gas combustion turbines and battery energy storage systems while also providing for an accelerated request for proposals process for incremental battery energy storage systems. The constructiveness and timeliness of decisions like this are a testament to the quality of our Southeastern states' regulatory environment and our ability to meet the projected rapid demand growth garnering headlines across the country. Coinciding with Georgia Power's 2023 IRP update filing last fall, and the release of our sales forecast in February, external attention, including from the investment community has focused on several key questions. How do you know the load in your forecast is real? How do you know you're pricing this new load appropriately? And what protections are in place if the forecasted load does not materialize? Those are all very important questions, and the answers are all fundamentals of how Southern Company has run our electric utilities for a very long time.

Chris. So, how do we know the load in our forecast is real? The short answer is that we've already incorporated risk adjustments to the forecast. One could argue it's a conservative view. We would say our forecasts are informed by our experience and by our continuous engagement with prospective new and existing customers. We've included a visual representation of our process in the slide deck. Typically, our forecast appropriately represents only a portion of the full potential load we might ultimately serve. If a customer has not formally communicated state-specific project details with our company, they're not included in the forecast. If they have a choice of utility provider within the state that they have chosen, which is the case in each of our states, they are either not included or only included at a reduced probability-weighted level. Importantly, even once a customer has committed to one of our utilities, we further risk-adjust the forecast based on the likelihood of delays on the customer side, whether those are construction delays or delays in ramping up production. And lastly, we further risk-adjust the forecast based on the history of announced loads being higher than actual customer loads. Lower actual customer loads often result from technology improvements, economic conditions or other factors. All of that to say, we believe our forecast is the best representation of expected future demand. And with the potential for additional new customers to choose our states and utilities, there is potential for our forecast to be higher down the road. Next, I'll discuss pricing. When it comes to knowing that we're pricing this load appropriately with a view towards protecting existing customers, several of the factors Chris mentioned a moment ago are key. We use our experience and robust tools to ascertain the expected marginal cost to serve each new customer and incorporate that into our flexible pricing mechanisms. We price the load in a manner that helps ensure the marginal cost will be borne by the new customer. Sometimes, as is the case with Georgia Power's recent growth, we're able to provide new large load customers with competitive market pricing that also provides meaningful benefits back to existing customers. These benefits are not only driven by carefully constructed market pricing. They're also a function of a robust, long-term integrated resource planning process and Georgia Power's ability to use existing resources to serve a large portion of the new demand while only needing to incrementally invest to meet higher peak demands. The stipulation the Georgia PSC recently approved includes a commitment by Georgia Power for these customer benefits to be incorporated into the 2025 rate case. Our approach to pricing has never been more important given the current macroeconomic backdrop. Affordability is a key tenet of our customer-centric business model, and we work hard to ensure new customer demands don't place additional burdens on those less able to afford it. Lastly, the risk question, what protections are in place if our forecasted load does not materialize? I've already described how we've risk-adjusted the forecast itself, and the other major risk mitigations pertain to local infrastructure improvements and our portfolio of supply resources. These new large load customers often require significant local distribution system improvements, and these improvements often provide limited incremental benefit to other customers. As a result, we require most new large load customers to pay for these improvements upfront, helping ensure other customers are protected.

Before taking your questions this afternoon, I'd like to first take a moment to reinforce that as we serve these growing energy needs, we also remain focused on achieving our long-term greenhouse gas reduction goals, including net 0 greenhouse gas emissions by 2050. Working closely with each of our states, and with an unrelenting focus on safely and reliably serving our customers' needs, we continue to make responsible economic resource decisions over the long term. For example, over 80% of the resources additions planned across our system, totaling nearly 10,000 megawatts from 2023 to 2030, are 0 carbon emitting resources. We have accomplished some wonderful things in recent weeks, and we are even more excited about our future. We have seven quality state-regulated utilities with long track records of outstanding operational and financial performance that deliver over 90% of our earnings. Along with a few quality complementary businesses, we believe we have the ideal portfolio to support our long-term objectives. Southern Company's value proposition has never been more attractive. Our team has never been stronger, and we are positioned as well as we ever have been. As I said earlier, we have the people, the experience and the scale for sustained long-term success. Thank you, as always, for your interest in Southern Company. Robert, we're now ready to take questions.

Good to see the strong sales growth coming in during the quarter. I guess just as we think about the impact on earnings from some of these volumes, are there any sensitivities that you can provide around the commercial load or the data center load specifically there?

Yes, absolutely. So it's roughly $40 million for a 1% change in our overall sales. For the majority of what's reflected here, whether it's data centers or large industrial customers, it may skew slightly below that. So really, it's somewhere in the range of $20 million to $40 million for a 1% change in sales.

Got it. That's super helpful. And then, just as a follow-up, as you think about the recent commission approvals on the 23 Georgia IRP filing, do you see any incremental capital needed relative to what you previously laid out on the fourth-quarter call?

There will be some additions based on the approval, Carly, and this mainly involves the additional storage resources, specifically the battery energy storage system. If you remember, we had included two particular projects in our outlook, but the commission approved 500 megawatts of owned storage, which is more than double our initial assumption. In terms of total dollars, I’m going to provide a broad range. Additionally, we announced an expansion of one of our solar projects in Southern Power, which wasn't included in our forecast from February. Overall, you're looking at somewhere above $500 million, but slightly below $1 billion, probably. What we want to do is not get ahead of the regulatory processes as there are specific certification steps to follow. We will let that unfold and then update our forecast more formally later.

Congratulations on getting Vogtle operational. That's fantastic. In the last call, you mentioned improved sales growth and an increase in CapEx, indicating more potential ahead, while reaffirming your guidance in the 5% to 7% range. I recognize that as a large company, achieving a 5% to 7% change is significant. Can we conclude that as you invest this capital, you will at least maintain benefits within the 5% to 7% range, even considering financing costs?

Yes. Look, I think it's fair to characterize that everything that is occurring and particularly if the momentum continues and what we're seeing, I would characterize that as adding an upward bias to where we are from an earnings perspective. And you kind of said it, Steve, and we certainly saw your commentary and your note yesterday. We are a big company. We are issuing equity. But even with all of that, these incremental investments should have an accretive effect. But I think it's just too soon to say exactly what that means, but an upward bias absolutely exists, particularly if this momentum continues. Now does that mean change in growth rate? Probably not. Does it mean maybe that growth rate is off of some higher number later down the road? Probably so.

And Steve, the only thing I'd add is we talked to you before about not just about raising growth rates, but it's about the durability and the length, how we extend the runway is something that we are keenly focused on as we've talked to you many times about. And I think that's clearly an opportunity that we are afforded by this added growth.

And then the only thing I'd add is also the thing that we are really gratified to see as part of this whole dynamic is a derisking of our outlook. Because of these customer benefits, the affordability equation is greatly improved, and that's a good thing for the long-term sustainability of our business.

Steve, the only thing I'd add, I mean, one of the things that we talked about in our prepared remarks, we've talked to you more about how do we use this opportunity to make sure we put downward pressure on rates across our customer classes and making sure that we price this new load in the right way. And I think we've demonstrated our ability to do that and having the resources and tools to do that going forward. So it provides us additional excitement for us as we go forward.

That's all helpful. Just changing the subject, I wanted to ask for an update on a few things. Since the last call, we've had the bill regarding the commissioner status, but I'm not sure if there have been any updates on the election court cases, and there was also the bill about reinstating a consumer council. Could you provide an update on all these developments?

Yes, the consumer advocacy group within the commission did not see their bill passed by the legislature. However, the legislature did approve a bill that provides some clarity regarding the election cycle moving forward for the commissioners. There was a bit of confusion and disruption, and the timeline was tight due to court cases. Consequently, the legislature did not pass a bill that would have outlined the order and schedule of elections for commissioners from 2025 to 2028. It's important to note that the current commission in Georgia will be the one to review Georgia Power's 2025 Integrated Resource Plan as well as the 2025 rate case. Therefore, there is an established order and schedule for the commission for the next two to three years, extending to 2028.

And then just last question going back to the data center update, which was very helpful. Just we're hearing from a lot of other utilities about data center growth that they're seeing. And obviously, you're kind of somewhat at the forefront of that. But just you mentioned in some cases, taking deposits or taking money to kind of lock that in, that the customers can pay upfront. But just how are you trying to assess the risk of some of the customers putting themselves in line in 6 different regions and then in the end only picking 2 of them and just making sure that you're not on the losing end of that? Or just trying to kind of put that into your assessment of risk.

Yes, Steve. I think we tried to express some of this in Slide 11 of our presentation. We're not relying on those who may still be attempting to engage multiple states or utilities until we have a clear understanding and a mutual commitment between them and our utilities. It's not firmly established yet. There might be some risk adjustment or a probability-weighted consideration due to the high level of activity, but we feel relatively confident about our forecast, which I prefer to describe as quite conservative in this context.

Can you provide more details about the timing for any updates regarding the upside bias you mentioned? What would trigger a higher guidance, such as moving to the top end of a rebased figure and achieving growth of 5% to 7% from that point? I'm trying to understand what factors would influence that change.

Yes. The way I see it, if we maintain this momentum, it's not just about the current cards we have. These cards have significantly enhanced our overall profile, adding durability and reducing risk regarding our outlook. However, sustaining this momentum will require ongoing investment and sales growth in the long run. As for updates, we won't be making any changes mid-year. If there is an update, it will be shared during our fourth-quarter call, and it will need to be a substantial event for a company of our size to impact the profile significantly.

That's perfect. And then, Chris, maybe just a quick one for you. There's been obviously kind of a debate in the industry around the behind-the-meter and in front of the meter, and language from some of the hyperscalers seem to show a little bit of a preference around self-generation and self-supply with some backup capacity, which can obviously impact some of the demand numbers as we're thinking about things more prospectively, right? Chris what conversations are you having around this as you kind of engage with new customers?

We are currently having many discussions that address various options and considerations. When speaking with hyperscaler data centers, they prioritize power, resilience, and reliability, with some also looking for clean energy solutions. They are aware of the demand they place on certain locations and are contemplating whether to self-generate or seek support from behind the meter. These conversations reflect a range of options as we aim to understand their needs while also educating them about our business, services, and operations. We strive to serve them as customers, but we also recognize that this is a time of significant instruction and education in the market. Our company’s portfolio, with its complementary subsidiaries, allows us to support them in various ways, making this dynamic and the demand in the marketplace quite exciting as we have the resources and capabilities to assist them in multiple areas.

Congrats on Vogtle, really exciting stuff. So on the sales growth, you talked about things bubbling up in other jurisdictions just outside of Georgia. And can you just kind of remind us what you're assuming there, what's embedded in the plan versus where the upside of those figures could go?

I don't believe there's anything included in the plan. It's mainly about the announcements we anticipate in the near future. For instance, I think there was a recent announcement in Alabama regarding a 200-megawatt facility that Meta unveiled. Additionally, there has been some legislation in Mississippi offering incentives for data centers and other large-scale providers to establish operations there. We recognize these developments, but those projects have not been factored into our current forecast.

That's very clear. And then, Dan, I'm just wrapping in that $500 million to $1 billion figure that you were kind of discussing on the CapEx side. I understand this is outside the plan now and probably not coming to your yearly update. But just how do we think about the credit implications? And I know last quarter, I think you said you were 14% to 15% FFO to debt in '24 with a 60 basis point improvement every year thereafter. Is that still the way to kind of think about the uplift here over the next few years? Maybe you could comment on that. Yes, absolutely, Nick. That profile we described in the fourth quarter that kind of ramps from that 14% last year up to 17% in the back half of the plan, it's absolutely still the profile to watch as this incremental capital opportunity emerges. What we'll do is issue sufficient equity probably through something like an ATM and through our plans to kind of restore the metrics to where they would have otherwise been without that incremental CapEx. And again, kind of going back to Steve's question, yes, even doing that, this incremental CapEx will have an accretive effect.

So, Dan, I was curious about your comment on the 12% growth in data center sales. Could you explain how much of that growth comes from new data centers and how much is from existing data centers utilizing newer technology?

So it's about 3/4 existing data centers and then a little bit the other quarter kind of coming from new data centers year-over-year. So we're seeing both. We're seeing a continued ramp-up of new facilities, existing facilities ramping up their usage.

Cool. And then just one quick follow-up on the legislative front. I'm not sure if the House Bill 1192 was actually passed and signed into law, and that talks to kind of suspending the, I believe, the sales tax exemption on data centers. Maybe can you just address that? Where does that sit? And what implications, if any, do you see on the data center growth in Georgia?

Yes. I mean I think that it passed and now sitting on the governor's desk and so waiting to see what happens there. I think one of the things the government wants to do is let economic development activities know that Georgia is still open for business. And so I think that's one of the key factors in consideration that he will pay attention to as he makes a decision on that bill. But right now, I don't know what will happen, but it's there for him to take action on. And so we're waiting just like everybody else to see what happens.

Congratulations on Vogtle Unit 4. I wanted to follow up on the topic of your notably higher than expected load growth in earnings and ongoing data center investment in your service territory. How do you think this affects the future generation mix, particularly regarding coal plant retirement dates? Are there potential deferrals or any thoughts on this?

I believe there's a lot to anticipate. Additionally, I want to mention the new EPA regulations, which we are currently reviewing after the recent announcements. Many of these rules seem impractical when considering the anticipated demand and the technological expectations they are proposing, which may not match reality. There are numerous outstanding issues. As we assess how to meet the demand and this need at the state level, all factors regarding new and existing generation must be considered. The future of current generation plays a significant role in this evaluation. We also need to take into account the potential new regulations from the Environmental Protection Agency. Therefore, all of these aspects are very much subject to consideration as we progress through the relevant processes.

That makes sense. And how do you think about the feasibility of carbon capture in your territories?

Geologically, there are locations along the coast, including the mobile area and certain parts of Mississippi, where we have the conditions suitable for sequestration. However, when considering the expectations and requirements presented, it raises questions about the availability of technology at a commercial scale to meet those demands. I believe there are many uncertainties in that area. Therefore, I find these rules to be unrealistic at this moment. There is still much work to be accomplished and discussions to be had regarding the best way to progress. We are continuing our analysis, which is extensive and requires significant effort. Additionally, we will need to determine our course of action moving forward concerning litigation, whether it involves the state or various associations. Overall, there remains considerable work ahead and more discussions to engage in.

That's very helpful. And one last one, if I could. Just given nuclear ability to offer base load that is very suitable for data center and other demand as such. Just wondering any updated thoughts on the viability of that technology down the road? And how Southern thinks about that?

I mean I can give you my speech if you'd like to hear it. I mean the country is going to need more nuclear. I mean there's clearly no technology better suited to support the demands of this increasingly digital economy and society. And so I think the federal government has got to step in and provide great leadership to incentivize companies to move in that direction. I'd also say we're going to celebrate what we've done at Vogtle for a very long time before we give any consideration to any more. But we think others, they have the opportunity and should really look at this country has to look at new nuclear to go forward to meet this growing demand.

Yes. I think that last question was asking you about Vogtle 5 and 6, but I'm not sure. But I guess just a quick one. Last month, there was approval overwhelmingly approved by the Georgia Public Service Commission, the IRP. But just curious, any commentary on some of the language related to rate increases. And you guys have laid out, especially on the slides, great information on how you're navigating the challenges of adding all this infrastructure, but focus on the customer bill. And just if you could tie that to the language on one of the approvals during the approval with maybe no more bill increases.

Yes, Anthony, this is Dan. Look, I think largely, any commentary you heard was simply focused on affordability and ensuring that the benefits that Georgia Power said we're there, end up reflected in customer rates. And that's exactly what the stipulation does is provide that commitment so that when we file the 2025 rate case, one of those moving parts is going to include incorporating those economic benefits for all customers into that calculation.

So first, regarding the Southeast Energy exchange market, initially, I interpreted its establishment as an indication of excess power in your region that could be shared with other areas in the Southeast. However, I now have a different perspective. I wonder if there is a method to transfer some power into Georgia to help meet the growing demand. I am just exploring any potential benefits related to this newly established power market.

Angie, I think it is what it is. I mean it was intended to move around the partners and participants of excess capacity. And so that's what it has been doing, I think, has been very successful, but I don't think it signals anything more than that. I mean that simply is it's doing what we intended to do with all the participants. And so we'll continue to utilize that. Now how does it factor into the additional growth? I mean we'll step back and look at it. But it doesn't signal anything more than what we intended to be when we made all the filings and got all the approval.

Yes. And really just to create a more nimble market for those intermittent resources to make sure that customers, wherever it's needed, benefit from that very, very low-cost energy.

Congrats on Vogtle, great seeing both units in commercial operations. So great job there. I guess my first question is on HB1192, if the governor were to sign the bill, would that essentially slow down the addition of data centers in the state of Georgia or put you in a relative disadvantage to other states?

I think it's difficult to provide a clear answer to that question. While I would lean towards saying no, it's important to consider the competitive nature of economic development among states and how that affects Georgia. This scenario raises significant questions regarding resilience and our capacity to meet customer demands effectively, not just consistently but also in terms of the resilience they expect. So, to put it simply, my initial thought is that it probably wouldn’t slow things down, but the competitive dynamics of economic development across states need careful consideration.

And then my other question has to do with sort of the tougher EPA rules. If those ultimately were to be adopted, do you need to accelerate the time frame for coal plant retirements?

And Paul, that's like we're evaluating those rules as we speak today. And I mean I think there's a lot we've kind of gotten to very quickly on the gas side in terms of capacity factors and the expectations for carbon capture. I mean I think there's more work for us to do in terms of the coal implications. But at first blush, like I said, I think they're impractical and probably yet would make it more difficult to run coal units any longer.

What time frame or cadence do you expect some of these data center companies that are shopping multiple jurisdictions to make a decision? And then in terms of in-development projects, it looks like there were 3 pending construction at the time of the stipulated agreement testimony. Have those pending construction data centers started construction? Or any update you could provide on that?

I don't have specific construction updates, but generally speaking, it operates like a continuous waterfall. There are always data centers coming in, exploring, and then making commitments. It’s an ongoing process. Currently, we have 12 centers under construction, totaling about 2,400 megawatts.

So that includes 1 or 2 that are still pending, okay. And then given that the continuous nature to the extent that the momentum were to continue to build, is there a time frame that you may seek to reengage the updated IRP process? Or any kind of framework you might apply to assess when additional resources may need to be approved?

I think we said before, Georgia has an RFP in 2025. And so they'll factor in new requests, new demands, new load during that proceeding. Alabama and Mississippi will make similar decisions in their processes based on the demands and requests that they receive as well.

As a result of the recent process, Ryan, part of the agreement is that Georgia will keep the staff and commission informed periodically, not in real-time but on a quarterly basis, leading up to the next formal process so that everyone is aware of what developments are occurring.

Because it goes back to some of the points we laid out in the prepared remarks. Is this load real? And so I think that quarterly update helps give the commission and the staff the information they need to give confirmation of the reality of this load.

And that next regular filing is scheduled for January '25.

And then last question for me. In terms of the customer preference for carbon resources, any stipulations or requirements that they're speaking to specifically as they're looking to decide what locations to locate their data centers?

I mean early on, we saw a lot of requests for 24/7 carbon-free of late. We see the request for do you have power. And like I said, we continue to build additional carbon-free resources. And so we'll continue to work with them. But right now, I think there is just a simple desire and request for resources for energy.

And we're very transparent about our own transition plans. And I think that is an opportunity for them to kind of latch on to transitioning along with us.

Also congrats on Vogtle and I thought it was a very good choice of words, arduous, in your prepared remarks. I appreciate that.

We chose that word very carefully.

I figured. On the load forecast and specifically even the Georgia IRP, what does that mean for T&D investment? Is there upside there in addition to the generation upside you talked about?

Yes. And so if you remember, Travis, part of our year-end update on the capital plan, I mean, it totaled $5 billion of increased capital. There was a big piece of that, that was also transmission, and that will continue to be part of the long-term planning discussions we have with our states. Absolutely, as we add new resources, transmission considerations have to take place absolutely as our fleet transitions from its current state to its future state, transmission considerations are part of that. So there will clearly be transmission opportunities along the way here.

And I'll also add, there's got to be some additional build-out of gas infrastructure as well. I mean, so there's a lot more infrastructure that's got to be built to support the generation resources to meet this demand.

We don't want to get too far ahead of exactly what it will look like in terms of if there's suddenly this accelerated load. But so the next scheduled processes. We got Mississippi, we'll launch a process in April rather they're going through that now and Alabama will have one next spring 2025.

Let me conclude by saying this. Understandably, the journey with Vogtle 3 and 4 has taken a lot of attention from our stakeholders and resulted in fewer conversations focused on our underlying business and its success. The fact is, all along, we have continued to execute at a very high level across our portfolio and have delivered strong results. Our reliability and customer service were outstanding. We made key investments in financial structures across every jurisdiction. We successfully navigated our regulatory processes and achieved constructive outcomes. As we look ahead, our focus remains on the fundamentals, with customers at the center of everything we do. Serving the growing load we are experiencing is what we were built for, and our model is intended to turn that growth into value for all stakeholders, including customers and investors. That is what the employees of Southern companies do. It may sound boring to some, but it's exciting for us. Thank you for spending time with us today. And operator, that concludes this call. Thank you very much.