Fortis Inc.

Welcome to Fortis Q1 2024 earnings conference call and webcast. During the call, all participants will be in a listen only mode. There will be a question and answer session following the presentation. At that time, those with questions should press star followed by the number one on their telephone. If at any time during the conference, you need to reach an operator, please press star zero. At this time, I would like to turn the conference over to Stephanie Amimo. Please go ahead, Ms. Amimo.

Thank you, Ludie, and good morning, everyone. Welcome to Fortis's first quarter 2024 results conference call. I'm joined by David Hutchins, president and CEO, Jocelyn Perry, executive VP and CFO, other members of the senior management team, as well as CEOs from certain subsidiaries. Before we begin today's call, I want to remind you that the discussion will include forward-looking information, which is subject to the cautionary statement contained in the supporting slideshow. Actual results can differ materially from the forecast projections included in the forward-looking information presented today. All non-GAAP financial measures referenced in our prepared remarks are reconciled to the related U.S. GAAP financial measures in our first quarter 2024 MD&A. Also, unless otherwise specified, all financial information referenced is in Canadian dollars. With that, I will turn the call over to David.

Thank you, and good morning, everyone. Before getting started, I'd like to introduce Stephanie Raymond to her first earnings call since being appointed president of Central Hudson in April. Stephanie will serve as president until Chris Capone's retirement in October, at which time she will assume full responsibilities as president and CEO. Welcome, Stephanie. We look forward to working with you on the Central Hudson team. For the first quarter, we delivered strong and consistent operational and financial results as our regulated utilities continue to effectively execute their business plans. And with 1.1 billion of capital investments made in the first quarter, our 4.8 billion dollar capital plan for 2024 is on track. Our low risk growth outlook remains intact and opportunities to expand and extend our plan continue to progress. On the regulatory front, ITC has been focused on the right of first refusal statute in Iowa. While new ropher legislation did not advance last month, we remain confident that ITC Midwest has the legal right and obligation to construct the Trunche 1 projects in Iowa assigned through the MISO's long range transmission plan and associated tariffs. MISO also released its draft Trunche 2 portfolio, including a preliminary project map. While we expect further refinements, we view this as a promising step forward. With climate risks at the forefront of the utility sector, the recent release of our 2024 climate report was timely, highlighting how Fortis is preparing for and mitigating climate related impacts across the group of companies. We continue our long track record of executing our capital plan. These investments in our energy systems support the delivery of cleaner energy and the reliability our customers expect. Our five year capital plan of $25 billion remains on track, comprising of virtually all regulated investments and a diverse mix of highly executable low risk projects. With $7 billion earmarked for cleaner energy investments, we expect to interconnect renewables to the grid, invest in renewable generation and energy storage in Arizona, and deliver cleaner fuel solutions in British Columbia. Rate base is expected to increase by $12 billion to over $49 billion in 2028, supporting average annual rate base growth of 6.3%. Beyond the plan, our utilities continue to advance additional growth opportunities with a couple of key developments during the quarter. As mentioned, MISO released a preliminary map of its LRTP Tronch II projects, with total transmission investments estimated in the range of $17 to $23 billion US. While it is too early to estimate the investment opportunities within ITC's footprint, MISO board approval is anticipated in the second half of 2024. The preliminary map of projects includes 765 KB transmission lines. If approved, these investments would bolster MISO's ability to facilitate the ongoing generation fleet transition, accommodate load growth, and address increasingly frequent and severe weather events. We believe this is exactly the forward-looking, innovative planning required to deliver a reliable, resilient grid of the future. In Arizona, the team is working to advance the 2023 integrated resource plans filed by Tucson Electric Power and UNS Electric, which requires incremental investments estimated at $2.5 to $5 billion US through 2038. In late 2023, TEP and UNS Electric released a joint all-source RFP, calling for up to 1,500 megawatts of new resources aligned with their respective IRPs. Proposals were received in March, and projects are expected to be announced later this year. In March, the BCUC approved key elements of FortisBC's Renewable Natural Gas, or RNG, application, requiring that natural gas deliveries to all customers include a portion of RNG. In addition, the BCUC accepted FortisBC's Long-Term Gas Resource Plan, which outlines FortisBC's plan to serve customers' energy needs, transition to a low-carbon energy future, and support meeting provincial greenhouse gas targets. Overall, we are pleased with this decision as it recognizes the key role that the gas system will play in meeting British Columbia's energy future. Also in March, the Province of British Columbia issued an Environmental Assessment Certificate for the Tilbury Marine Jetty project. The construction of the jetty supports the expansion of the Tilbury LNG facility, which is uniquely positioned to meet customer demand for natural gas. The site is scalable and can accommodate additional storage and liquefaction equipment, and is close to international shipping lanes. Once constructed, the jetty would make use of FortisBC's assets at the Tilbury site to service marine bunkering. In the U.S., we are seeing momentum build around load growth opportunities. In ITC Midwest Footprint, Google recently announced plans for a data center to be built in Cedar Rapids, Iowa, with a goal of coming online in 2026. The data center will support initial load growth of 300 megawatts and is expected to increase to 600 megawatts over time. In Michigan and Arizona, we are seeing increasing inquiries related to manufacturing facilities and data centers. Also in Arizona, South 32 continues construction of the Zinc and Manganese Hermosa Mine, which is expected to become one of .N.S.'s largest customers. These developments can provide strong economic growth for our communities and favorably impact customer rates. During the quarter, we released the 2024 Climate Report, which assesses the impact of climate on our priority assets over multiple scenarios. The report identifies key risks related to climate change, Fortis' mitigation activities to address those risks, and future opportunities to advance the resilience of our utilities. With a strong track record of increasing dividends for the past 50 consecutive years, coupled with our low-risk growth strategy, we remain confident in our -6% annual dividend growth guidance through 2028. Now I will turn the call over to Jocelyn for an update on our first quarter financial results.

Thank you, David, and good morning, everyone. Reported and adjusted earnings per common share for the first quarter of 2024 were 93 cents. Adjusted EPS was 2 cents higher than the first quarter of 2023, and key drivers of EPS growth related to rate-based growth across our group of companies, and the timing of earnings associated with the new -of-capital parameters at FortisBC. Regulated utility growth was tempered by higher corporate costs and weighted average shares outstanding. The disposition of Aiken Creek, which occurred in November 2023, also impacted EPS in the quarter by 3 cents. While negative for the quarter, on an annual basis, the disposition of Aiken Creek will be neutral to EPS. The chart on slide 10 highlights the EPS drivers for the quarter by segment. Our Western Canadian utilities contributed a 6-cent EPS increase, 4 cents related to the timing of the new -of-capital parameters at FortisBC, approved by the BCUC in September 2023, and retroactive to January 2023. Growth also reflected rate-based growth, and a higher allowed ROE at Fortis Alberta effective January 1st. At our largest utility, ITC, the 2-cent EPS increase was mainly driven by rate-based growth. Lower stock-based compensation for ITC was offset by higher holding company finance costs. EPS was 1-cent higher -over-quarter for our U.S. electric and gas utilities, largely driven by rate-based growth and the timing of operating costs at Central Hudson. In Arizona, earnings were largely consistent with the first quarter of 2023. The favorable impacts of new customer rates and higher margins on wholesale sales were offset by higher depreciation and operating costs and lower retail revenue associated with milder weather. Due to the seasonality of sales, the favorable impact of new customer rates at TEP is expected to be higher in the second and third quarters. At our other electric segment, rate-based growth and higher sales contributed a 1-cent increase in EPS. And for our corporate and other segments, the decrease mainly reflects the disposition of A Concrete, which I mentioned earlier. The remaining decrease reflects higher holding company finance costs and unrealized losses on derivative contracts. And lastly, higher weighted average shares reflect shares issued under our dividend reinvestment plan. To date, we have not used the ATM program as participation under the DRIP remains strong. Through April, we have raised approximately $400 million of debt to repay short-term borrowings and fund our capital program. As shown on the slide, we have limited non-regulated debt maturing in 2024, and our $600 million series M preference shares are scheduled to reset at the end of this year. Overall, we remain in a strong liquidity position as we execute our five-year capital plan. Our investment grade credit ratings with Moody's, S&P, and DBRS Morningstar remain unchanged. We are on track to achieve an average cash flow to debt metrics of 12% over the next five years, and we continue to engage with S&P on our physical risk around climate change. In March, the Iowa District Court issued an order denying all motions for reconsideration of its decision in relation to the Iowa Role Firm. This includes ITC's request for reconsideration with respect to the scope of the injunction for Tronch 1 projects in Iowa that were previously awarded to ITC Midwest by MISO. ITC has appealed the District Court's decision to the Iowa Supreme Court. As discussed last quarter, under the MISO tariff, approximately 70% of the Iowa Tronch 1 projects are upgrades to ITC's facilities allowing existing rights of way, which under MISO's tariff grants ITC the option to construct the upgrades regardless of the outcome of the appeal. For any portion of the Tronch 1 projects in Iowa to be competitively bid, we believe a federal decision that significantly departs from existing rules under the MISO tariff is required. Until there is more certainty around the resolution of this matter, we cannot predict the impact on the timing of the capital expenditures related to Tronch 1 projects located in Iowa. In New York, Central Hudson's one-year general rate application is progressing. Hearings concluded in the first quarter and we anticipate a decision from the New York Public Service Commission in July. Last month, FortisBC filed its 2025 through 2027 rate framework proposal with the BCUC. The rate framework builds upon the current multi-year rate plan and includes a prescribed approach for operating expenses and capital, an innovation fund for cleaner energy, and continued earning sharing mechanisms. The regulatory process will continue throughout 2024. And with that, I'll now turn the call back to David.

To conclude, Fortis is off to a solid start in 2024. We continue to advance our low-risk, sustainable growth strategy underpinned by our diverse, regulated energy delivery businesses across North America. Initiatives like our 2024 climate report, as well as our integrated resource plans in Arizona, show our proactive approach on behalf of our customers in identifying and mitigating climate risks and pursuing opportunities to ensure reliable and resilient service. With preliminary visibility on Tronch 2 of the MISO Long Range Transmission Plan, ITC is well positioned to advance investments in its footprint. And with load growth opportunities on the horizon, we are focused on investments that keep energy affordable for our customers. We remain confident in our five-year capital plan, which supports average annual rate-based growth of approximately 6% and our -6% annual dividend growth guidance through 2028. That concludes my remarks. I will now turn the call back over to Stephanie.

Thank you, David. This concludes the presentation. At this time, we'd like to open the call to address questions from the investment community.

Thank you. We will now conduct the question and answer period. If you would like to register a question, please press the star, followed by the number one on your telephone. If your question has been answered and you would like to withdraw your registration, please press the star, followed by the number two. If you're using a speakerphone, please keep your hands up before entering your request. And we kindly request you speak loudly and slowly to ensure all participants can hear your questions. One moment, please, for your first question. And your first question comes from the line up, Maurice Choi from RBC Capital Markets. Your line is open.

Good morning, everyone. I think I'll kick off with a comment you made earlier, Justin, about how you've engaged the S&P credit rating agency on physical asset risk. As we head into, I guess, the later part of this year with potential for higher wildfire risk, can you just compare and contrast the regulatory and legislative setup across your 10 utilities or even just areas where you feel that there could be higher versus slower risk?

So Maurice, I'll start off. So yes, we have engaged with S&P and we continue to do so. And I would characterize up to this stage, we've been sharing information around that in terms of what we're doing from a mitigation point of view, you know, engagements we're having with, you know, regulators, how we're working with EEI. So right now, we're just continuing to information share with S&P. As you can appreciate, a lot of our jurisdictions are different with respect to how things are treated from a regulatory perspective. We don't have specific regulatory mechanisms that specifically address wildfires, but we've had wildfires in the past. Like in Alberta last year, we had around $10 million of cost in one particular fire. And that will be accommodated through the current rate structure that they have. I will say that given, I say, the attention on wildfires, that our subsidiaries are having more conversations and more interactions with regulators so that they fully understand our plans and that, you know, that we're just having more engagement generally with the regulator. So I don't know if I see any one particular area as having more risk than the others. One of the benefits afforded is that we're substantially regulated. We are in good regulatory jurisdictions. We've historically done well in front of the regulator with respect to how we've managed our utilities and recovered our costs. So I'm not expecting any issue there, but it is evolving as time progresses.

Yeah, just to add a little color there, Maurice. Obviously, the fire risk does vary by jurisdiction and the focus areas have historically been, well, I'll say currently even, have been on the western North America side of the continent here. And that primarily puts our focus on Alberta, B.C. and Arizona in that order. But I think one of the things that folks have to understand too is the very different legal and liability and regulatory structures between say B.C. and Alberta and their structures, which are much more favorable, much more regulated, much more defined on how things are handled from a liability to a liability. Perspective different legal construct. All of those things are a very different risk profile than say in the U.S. And in the U.S., our exposure is at Arizona, which is has very limited exposure just because of the nature of the assets that we that we own. We own the majority of our assets are in the Tucson metro area, which don't have a huge wildfire risk because of other frankly, there are not a lot of trees and into the Tucson metro area or things that necessarily burn. So it is a very different, I'll say risk outlook. And we have been spending a lot of time with our teams across all of our subsidiaries, not just those three to make sure we're taking the best practices that we see, not just across our own utilities, but across the entire industry and finding ways of mitigating that risk. And then getting out there and explaining the great job that we're already doing, but also making sure that we're explaining that to folks like our rating agencies.

Thanks for that. And then to make sense and moving quickly over to B.C. with our lot trees. I gather that there were a number of items that forest B.C. proposed to keep and continue as part of the rate framework. And I wonder if you could share if there's anything in there that's materially different from the current framework. It's clearly a three year plan, not a five year one. And if there's more of a holding pattern request until we get clarity on how the province will roll out that's in B.C.

rules. Yeah, so Maurice, the framework that they've filed, as I understand it, I'll kick it over here to Roger, but it seemed like almost the exact same mechanisms that we had in the prior, maybe with just a little fine tuning, other than as you mentioned, it's not a five year plan, it's a three year plan. But Roger, anything to describe this sort of a little bit more out of the ordinary or slightly different from the last .R.P.?

Thanks, David. Thanks, Maurice, for the question. I think David has characterized it correctly. It is a multi-year rate plan, three years versus five. We continue to pursue what we call a performance based structure where our delivery rate, our controllable O&M, increases by an inflation minus the productivity improvement factors. So that's structurally the same. We've focused again on controllable O&M and have proposed all the flow through items for the non controllable O&M. I think one area of difference, whereas we had escalated base capital or sustaining capital by formula, we instead here for the utilities did a three year sustaining capital forecast. However, we've maintained a similar structure on the growth capital that underpins, as far as we see, Energy Inc's customer additions. So overall, the last plan we had, the PBR plan, the .R.P. plan was quite successful. We've focused no reason to vary significantly. I think the one area that we are putting a bit more focus is on things like energy transition. How do we undertake innovative investments, things like that, but more in relation to the policy drivers, not really much different on the underlying rate setting for the basic rates.

And then the other piece, Roger, too, is the fact that we can still file for CPCNs for large projects, which is obviously important for us to do things above and beyond what the underlying .R.P. structure would allow for.

Perfect. Makes sense. Thank you very much. Thanks, Maurice.

Thank you. And your next question comes from the line of Rob Hope from Scotiabank. Your line is open.

Good morning, everyone. Maybe first off on transmission. It does seem like various levels of government are very supportive of incremental transmission investments. However, we continue to see challenges on the permitting as well as the legal side there. So when you take a look at Tronch 1 and Tronch 2 and the challenges that we've had there, what is the path forward such that we could see an acceleration of transmission investment at ITC and some of the other kind of Fortis subsidiaries?

Well, I think for sure we're seeing some good positive results from one from the Fiscal Responsibility Act, as you'll recall, that they did some NEPA reforms as part of that, which will simplify and expedite the expedite, I should say, the ability to permit transmission. I think some of the focus on timelines and coordination were really brought home last week when the Department of Energy announced its CITAP program, which stands for Coordinated Interagency Transmission Authorization and Permitting. And the whole focus there is to cut the timeline for permitting on federal projects in half to two years. So those are good positive signals. I should say that in ITC's footprint, it's not typically a lot of federal land that they have to get permits on. So it won't necessarily have a huge impact, at least as we look backwards on a forward going basis. It's a good signal and hopefully can expedite those types of permits. But also there needs to be additional legislation, too, because probably the biggest issue we get in delays is the fact that we get all these legal challenges. And the legal challenges can be brought up for very insignificant reasons. And those types of delays and hopefully some level of legislative solution for that will be what's going to be key for us and everybody else who's developing transmission in the US to be able to get that done faster.

Thanks for that. And then just maybe moving over, like a number of your utility peers so far in Q1 have really been talking of kind of increasing load growth in their jurisdictions. When you take a look at your asset base, where are you seeing the greatest uptick in terms of load?

Yeah, so it's mostly in the US and mostly in ITC and UNS service territories. If you look at the hot spot map of where data centers are looking to locate, you'll see Arizona is one of those spots. You'll see a couple spots in the Midwest. I mentioned in the prepared remarks, the data centers that are going in in Iowa. If you've listened into other utilities calls like DT and CMS and how they're getting a lot of data center interest in Michigan, well, that's our transmission that needs to be built to serve that type of load. So all of those, that data center load has different, I mean, we respond to it differently. Like in Arizona, we would be looking to supply any data center that came in one of our utilities there since we're vertically integrated utilities, we'd be looking at generation transmission and distribution, all three functions to serve them. In ITC, it's obviously only transmission, but there's still a lot of growth opportunity out there, not just in data centers, but I think we're starting to see a lot of conversations around manufacturing and siting. Again, good areas for that are at the Midwest that ITC serves and Arizona, both big, good, strong growth economic development outlooks on a going forward basis.

Thank you.

And your next question comes from the line of Ben Tam from BMO. Your line is open.

Hi, thanks. Good morning. Maybe they can continue on the last question around load growth increasing on AI and data centers. Do you expect that to have a meaningful impact on rate based growth going forward? When you think about that, that setup and then he also comments. I know you mentioned it's more US. But any comment on the Canadian opportunity for AI as well? Thank you.

I'll answer this in reverse on the Canadian side. We're not really seeing that same kind of conversation from a data center, AI perspective. We're not hearing a lot of additional load growth or announcements in our service territories, at least in Canada. Also, probably much less chatter around manufacturing, although there are in some areas quite a bit in Ontario. We're not that we serve this load, but we're seeing some of that economic development around electric vehicle plants and things like that. There's just a lot more incentives to do it in the US because of the Inflation Reduction Act and the incentives it has for local content. So there's some additional drivers in the US that are pushing us. So what the impact will be is still this is still early days. There's obviously a lot of conversation. There's a lot of different data centers, these hyperscalers who are going around looking for places to cite their data centers, which they have siting requirements. They want to be by fiber. They need power, right? So that's I think the biggest conversation right now is finding the power or the areas that have power to be able to supply them. It is early days. I think that they look at multiple sites before they decide on it. So it's too early for us to really have a good feel for that load growth opportunities and the capital that will come with it. And actually, it might, you know, frankly be a bit more time, you know, through the end of this year, even just to figure out where some of this stuff will land. So it'll be a while before we see that making its way through our resource planning process within our utilities and through other processes like LRTPs, etc. that MISO goes through.

Okay, thank you for that. And secondly, maybe on the tranche to the product capex opportunity, anything you can provide directionally in terms of magnitude of that pie and when you think you can be put in the capex and potential service states?

Yeah, no, it's too early days. I mean, we're still working with draft portfolios. You know, the portfolios have to be finalized. They have to be approved. There's still things moving around. There's still studies to be done. So it's far too early for us to be put numbers out there yet.

Okay, thank you.

Thank you. And once again, if you would like to ask a question, please press the star followed by the number one on your telephone. Your next question comes from the line of Linda Ezra Guy Lins from TD Cowan. Your line is open.

Sure. Just wondering about your PBR three appeal in Alberta. Can you comment on any sort of ability to defer capital expenditures until there's more certainty, whether a more prospective approach to capital programs can be taken or how to kind of mitigate some of the uncertainty there and maybe just talk more generally about some of the inflationary pressures in your capital. Capital program and whether they're dissipating.

Yeah, so it was it was a bit disappointing in that in that latest PBR that we were using that historical look back of the prior years capital to set the forward rate, which is what we what we're appealing and what we got to lead to appeal. So I think that was a that was a, you know, a good result because it is important for us to make sure that we have that that baseline capital set at that is set at the right level on a going forward basis. I'll kick it to Janine to add some conversation around inflationary impacts and some other things. But, you know, the team there understands what what that what their current situation is, the capital plan that they have submitted. Obviously, that doesn't mean we don't look at additional opportunities and invest in additional infrastructure. It just means that they may have to trade off different capital within their plan. They might have to prioritize it a little bit different. And, you know, worst case, this is this is the world I lived in in Arizona was, you know, every once in a while you get a little regulatory lag because you don't get immediate recovery for it. But if they're that if they are investments that need to be done and need to be made on behalf of our customers to provide reliable power to do whatever we might need to do from a resiliency perspective, we make those investments and then we'll we'll we'll get it. And then we'll get it done the next round. But Janine, do you want to add a little color on the impact of interest and how you guys would be managing that?

Actually, thanks, Dave. You've covered it quite nicely. We are planning to execute our 2024 capital plan as we come to understand the various components of the PBR3 plan as they were determined last year. So, you know, there's a lot to digest with respect to where we have levers where we can manage costs in certain areas to address the shortfall potentially in capital funding. We do plan on bringing or utilizing some elements of the plan with respect to type one capital where we go forward with very specific requests to the AUC. While this reconsideration of the methodology that they use to establish capital funding is also ongoing. So certainly, all the steam ahead just continuing to deploy capital as we can and managing our costs as we do so until we see some of these other mechanisms start to apply.

Thanks,

Janine. Thank you. And your next question comes from the line of Michael Sullivan from Wolk Research. Your line is open.

Hey, good morning. Hey, Michael. Hey, Dave. I'll just try another one on the MISO Trunch 2 map. I know it's a little early, but maybe just relative to how you were feeling when you saw the draft map for Trunch 1. Does this feel like, you know, better opportunity set or worse?

Oh, yeah, I can provide some directional color there. There's a lot more lines on the map and they're different color lines, right? So the 765 KV is exciting. Those are obviously big projects. You know, the size of the overall portfolio, the estimates are in essence twice the size of Trunch 1. So directionally, it's looking pretty good. Obviously, we don't know where those lines will fall down exactly. We're not sure what the final package will look like. But I think we're all very comfortable and confident in saying it's a lot bigger. How that allocates to ITC, that'll come out in the wash as we go through the process the rest of this year.

Okay, I appreciate that. That's really helpful. Any chance you could also just give a little color on, more color on just how the legislative session in Iowa ended up playing out? Was it just a matter of time or not enough support? Can you give this another shot next year? Yeah, just more color on that would be helpful.

Yeah, I think the short answer is, you know, politics are always a little hard to call exactly how the process is going to work. I think the team did a fantastic job getting up there in front of the legislators, getting the support that's needed. But periodically, you just can't get the things to be brought up and debated. And when that happens, you just say, okay, well, we'll give it a go next time. And I think that's one of our others. Obviously, as Jocelyn mentioned in her prepared comments, what we think about our existing Tranchuan and why those are and should still be allocated to us. And the 70 percent that's in our rights of way. And I mean, we've still got layers and layers of arguments and appeal to boot on those Tranchuan projects. So it's really so what do we do next? And I think the conversation around looking again next year from an Iowa perspective, recalling also as we talk about Tranchu, we still have our rovers in Minnesota and Michigan. Also, you never know where those lines will land in relation to our existing rights of way. And as we sit here today, we're just around the corner from putting out their planning and cost allocation rule that will which could address some at least on a limited basis, some of the federal rovers that they at least tossed out there in the NOPA. So we'll see where that goes and we'll take that. Whatever I think I listed about seven different things that that team's working on related to this and we'll just, you know, stack them up and go through them.

OK, thanks. And last one for me, if you could just update us on the Arizona process and the workshops there that I think have kicked off on trying to improve regulatory lag. How you see that going so far?

Yeah, positive. I mean, very positive. It's got two different options that they're looking at there, whether it's a formula rate or a forward test. Here each comes with a different sort of batch of questions and issues within Arizona regulatory and legislative construct. But at the end of the day, it's all positive. It's either one of those is better than a regulatory lag basis that we're working on now. You know, obviously we got the SRP, the system reliability benefit mechanism that allows us basically a capital tracker that we got at UNS Electric. We expect that next time we file a rate case, the TP will file for one as well. That that's a that's a great sort of second place for something like a formula rate. But so again, we've got a couple of different options there and we're just we're just glad to see that it was getting traction that after the first workshops that they are looking at continuing them. So that's that's all that's all positive.

Thanks so much. Appreciate it.

Thank you. Your next question comes from the line of Mark Charby from CIDC Capital Markets. Your line is open.

Yeah, thanks, everyone. Just with not full clarity on the role for issue legislative process, the court process, haven't played out in your favor yet. What does that mean in terms of keeping certain projects in the five year plan? What would you need to see or what would happen for you to withdraw that? And then, you know, once the lines are drawn and you see the allocation on the charge to projects in light of the rope for issues not being settled, do you hold back in adding those to the fire plan? I appreciate a lot about comes maybe beyond the fire plan, but anything that is within the fire plan, is that could you from adding in your term?

Yeah, so as far as timing on Trunche one, you might recall that we only have about one point two billion out of the one four to one eight. And this is US dollars of the total capital expenditure in the current five year plan. So most of these are probably finishing up on the tail end of that five year capital plan already and then into the next two years. So really what's happened so far is just kind of delaying or, you know, moving some of those in service states around a little bit. I don't think that's going to be substantial. It's not going to be, you know, right now we're not changing our capital plan based on it because we still fully expect that those will be our projects to build. And then when we get into the Trunche two conversation, like you mentioned, yeah, those are probably at best in the, you know, year five of the next five year capital plan. And then we'll go on from there. That's more of a conversation about looking at the length that we have in our in our capital runway. And so it's not necessarily even something that will make it into the next this next five year capital plan, because we don't expect those projects to be approved and assigned or allocated until late this year. And of course, we like to update our capital plan in the fall. So it's well, we'd love to have, you know, quicker and sooner clarity on that. It's going to it's going to take some time. And and you know us, we don't put it in the capital plan until we really know it's coming. And so we are, you know, a bit conservative from that standpoint. But if we can give any color around the expectations when we put out our capital plan and as we get towards the end of of this year, we'll do that. But as as always, we want to make sure that we maintain the strong credibility that we have with you all that what we put out those capital plans, we're going to go out and do. So we'll we'll make sure that we still live by those those principles.

And any updated using just in terms of the mix again, the right away assets in terms of the amounts that you've card there at the one point to to see in the budget now just any refined numbers around how you think that would shake out if the roofer was not reinstated.

So in the one point to or the, you know, or the one four one eight total package there, you know, we talk about that 70 percent. I think I think that would be, you know, if if everything went against us, I think that's the that's the minimum that we would have. That would be the floor. So I I that that's that's what we would be thinking right now. But as it stands, we don't think that will be the case. We think we'll have all those projects.

Got it. OK, thanks for the time this one.

You bet.

Thank you. Is there no further questions? I would like to turn the call back to Miss M.I. Mel.

Thank you, Ludi. We have nothing further at this time. Thank you, everyone, for participating in our first quarter. Twenty twenty four was conference call. Please contact Investor Relations should you need anything further. Thank you for your time and have a great day.

Thank you, presenters and ladies and gentlemen, this concludes today's conference call. Thank you for participating. You mean now disconnect.