Julia Sloat: Yes. So I’ll let my CFO jump in here. But first things first, we want to have a healthy balance sheet, okay? So dollars come in the door. We’re going to make sure that our metrics work. We talked a little bit or a lot about 14% to 15% FFO to debt. We also pay attention to our debt-to-cap ratios, but 14% to 15% is our gating item for us in metric. So we will look to that metric to see where we’re shaking out. Dollars will be placed accordingly as we bring those in the dollar associated with sales. As far as equity needs go, as Chuck mentioned, I guess, again, the free study issue goes on average, we’re around $700 million, plus or minus any given year to see that in cash flow that we have out here on Page #29. We are going to continue on with a healthy CapEx program.
You’ll see that extended into 2028 when we talk to you at EEI. But there may be fluctuations like sequentially year-to-year. But I wouldn’t anticipate any material shift or change, again, getting item dollars in the door, take care of the balance sheet, and then we’ll fund the rest of the regulated business that way. And, Chuck, there anything as you add to that?
Charles Zebula: No. Julie, I think your answer is — I really can’t add anything. I would just say, embrace the capital opportunity and sensibly and smartly finance.
Andrew Weisel: Okay. Great. That’s helpful. And if you can just remind us what are the downgrade thresholds for Moody’s and Fitch?
Julia Sloat: 13% FFO to debt.
Operator: Your next question comes from the line of Durgesh Chopra with Evercore ISI.
Durgesh Chopra: Chuck will come the forward work with you. Just real quick on the FFO to debt metric. I just want to clarify the 13% to 14% target for end of this year. Are you assuming that Virginia fuel recovery that’s resolved?
Julia Sloat: No. As a matter of fact, what is assumed in that forecast that walk as today is everything that we already have in hand. So West Virginia fuel outcome does not disrupt that path at all. That’s prospective for us.
Durgesh Chopra: Got it. So okay. So any sort of — any incremental sort of cash flow bump from that would be accretive to what you show on this slide, right, even for 2014?
Julia Sloat: That would be helpful, yes.
Durgesh Chopra: Okay. Perfect. And then maybe just one quick — one real quick — what’s the balance the total deferred fuel cost balance that hasn’t been covered as of the Q3, I know the $1.4 billion as of Q2? .
Julia Sloat: Yes. $1.2 billion as of the end of the third quarter, and that’s in aggregate across the AEP footprint of fleet of utility companies. .
Durgesh Chopra: West Virginia roughly like $500 million, correct? .
Julia Sloat: West Virginia. Yes, West Virginia is what can be specific, $574.8 million. So call it $575 million. We’re paying attention to this. So that’s why a little bit of detail here. That’s important.
Operator: Your next question comes from the line of Julien Dumoulin-Smith with Bank of America.
Julien Dumoulin-Smith: So just coming back to that O&M piece, obviously, you put some comments in the script here. 100 million. Look, I think that’s a solid number. I’m just curious, how do you think about that annualizing here and the ability to annualize in those sectors? I get that some of them are kind of discrete in nature here, certain elections. But in an effort to kind of preview a little bit more on that ’24 trajectory. I know you made a couple of allusions to it here. Can you perhaps lean in a bit further and describing how you think about what that could do for next year on the cost side?
Charles Zebula: So we’re going to lead into that PEI in about 7 or 8 days or 9 days, whatever it is. But the folks right at the management team, as I said earlier, is really on prioritizing the spend and spending dollars where it matters most to our customers. That’s the most important thing we can do in our O&M budget will reflect that.
Julien Dumoulin-Smith: Yes. No, I respect that, hence the interest. Okay. One while I’ll leave it there. And you mind just on the low side just to clarify it a little bit further here. I mean, obviously, you have an updated load in the near year that is sensitively more robust and you have a backward dated load growth profile here for ’24,’25. How do you think about the time line for revisions and the extent of those revisions as you see it today, again, I know this is probably more in the EEI 4Q conversation. But I mean, clearly, we see this kind of revisions across the PJM footprint. How do you think about that? And also maybe how does that tee up with PJM itself here and potential further transmission-oriented opportunities?
Charles Zebula: Yes. So as you can see, right, the low growth in particular in commercial is pretty robust. Those numbers will be updated when we on the EEI. And as I said earlier, it’s embraced the opportunity. This is a good opportunity for us. I think you have to be smart about it and kind of vet out what is real and what is a real load is going to come on. and plan your capital investment profile around that. So lots of activity, lots of discussions. Our economic development team is very busy talking and dealing with the opportunity.
Operator: Your next question comes from the line of Sophie Karp with KeyBanc.
Sophie Karp: Can you please clarify, you mentioned that you could implement or that it’s possible to implement interim rates in Kentucky in January? Do you actually intend to do that? Or how does it take sort of politically it would work out for you there?
Julia Sloat: Yes. Generally, we try to take advantage of that. So that would be the plan. And of course, we’ll stay in close contact with all the stakeholders store case and the commission. And so other than that, just as we have done in say, for example, the PSO that is typical for us if there’s an opportunity to implement rates. We go ahead and do that and kind of risk-adjusted in terms of our forecast and understand when cash has been coming the door alters items that are so important as we put the forecast out to you guys and have confidence around that. But short answer is, yes, generally speaking, that, we would expect to put those in place or implement the rates.
Sophie Karp: Got it. And then just a broad question, I guess. Is there any interest to approach state regulators in stake mechanisms to reduce weather volatility impact on your earnings. I know you’re not decoupled in most of our jurisdictions. So kind of curious if you like that type of rate mechanisms or would you drive transition time to situation whether doesn’t impact you earn that much.
