Ben Fowke : I’m going to turn it over to Peggy and Chuck in a minute, Sophie. But I mean, we’re always going to look to put capital where we can get the best returns. There’s baseline capital that you need to do to make sure that you never compromise resiliency, reliability or safety. So we — but apart from that, I think it gets back to what I said. It’s listening to what those local jurisdictions really want and need. And that can also shape your capital needs because, quite frankly, it can shape your regulatory outcomes. So I’ll turn it over to the team if they have anything to add to that.
Peggy Simmons : I would just say, yeah, I echo Ben’s comments there on — there’s a certain amount of capital we need to continue to be resilient and meet the reliability needs of our customers. And as well as from a safety perspective. Those where we have really constructive outcomes, clearly, we know in I&M, we have the forward-looking test years. We’re able to continue to have that capital to allocate there to meet what those needs are. And we just continue to look at what our outcomes are by jurisdiction.
Sophie Karp : Okay. And then maybe going back to data centers, right? Do you see more attractive opportunities around incremental generation to support those customers or the T&D investment?
Chuck Zebula : Yeah, in Ohio and Texas, right? We’re — those are deregulated states. In our Indiana, Michigan territory, clearly, there would be opportunities for generation there to serve those customers.
Sophie Karp : Okay, thank you.
Ben Fowke : Thank you.
Operator: Our next question comes from the line of Paul Fremont with Ladenburg. Please go ahead.
Paul Fremont : Thank you very much. I guess first question would be on the ’24 guidance. Does that continue to include contribution from the retail and the distributed resources as was sort of outlined at EEI?
Chuck Zebula : Yeah. Our EEI guidance, right, we kind of change the waterfall based on the actual, right? But what’s in or out hasn’t changed, Paul. As Ben mentioned, we’re in the process that we plan to conclude here in the next several months on retail and distributed businesses. He also mentioned that we’re closing NMRD today, which there’ll be a benefit from that sale coming through. But everything is underpinned. Remember, too, when you look at the waterfall, we took the Generation and Marketing segment down to what we would call much more normal contributions. I’m not concerned that about the ability to take the proceeds, use them as appropriate to get that accretion as we go forward. But no, it’s still the same plan, if you will, as we put out at EEI.
Paul Fremont : And then Chuck mentioned that the FERC decision is expected to have a $0.03 negative impact on ’24. Is that going to be treated as operating EPS? Or is that going to be excluded as non-recurring?
Chuck Zebula: No, it’s operating.
Paul Fremont : And then I guess the last question I have is, currently, there’s a proceeding in Kentucky where, I guess, there’s recommendations for potential disallowance of fuel and purchased power costs. I think there’s also a fuel review that could take place or may be taking place in Louisiana. Can you give us, I guess, an update on what your expectations are and what’s happening in those proceedings?
Peggy Simmons : Yeah. In Kentucky, we do have a 2-year fuel review that has been underway, and we are waiting, the outcome as it relates to that. We had a hearing earlier this month actually. And then from — what was your other question with it related to SWEPCO?
Paul Fremont : Yeah. I think as part of that settlement on the renewables, there was, I guess, the ability of staff to do a review of the fuel?
Peggy Simmons : Yeah, that was part — excuse me, sorry, go ahead, finish your question.
Paul Fremont : No, that’s it.
Peggy Simmons : Yeah. That was part of the review, and that is ongoing as well. So — but Darcy can definitely give you some more information on that, if that wasn’t clear enough.
Paul Fremont : And last question for me. In terms of the 9.1% that you’re targeting for this year, I think what type of an improvement do you see as being necessary in order to hit the 6% to 8%? I think in the past, you’ve talked about needing to improve the earned ROE as part of hitting your targeted growth rate?
Peggy Simmons : Yeah. So over our 5-year plan, we look to be typically to be in the 9.5% range. So what we’re looking to do is increase by 10 basis points each year. And we think that that achieve ongoing. We continue to work through our regulatory outcomes to be able to close that gap.
Operator: [Operator Instructions] Your next question will come from the line of Paul Patterson with Glenrock. Please go ahead.
Paul Patterson : Hey, good morning. How are you? So just — it doesn’t sound to me like there really is much of a change in strategy with the new chapter and the managerial change that you’re looking at. Am I thinking about this correctly?
Ben Fowke : Yeah, I think so. It’s — the strategy is great. We just have to execute, and that’s what we’re keenly focused on, Paul.
Paul Patterson : Okay. I just want to make sure I’m hearing — and then the second thing that I guess — and I think this was asked before, but is there any timing that we should be thinking about in terms of when a new CEO would be in place?
Ben Fowke : Well, let me just say I’m committed to stay as long as it takes. So no shortcuts. But I can’t see it being shorter than six months, and hopefully, it doesn’t take more than a year. But again, it’s going to — the process will take the time it needs to take to get the absolute right candidate in place.
Paul Patterson : Okay. And then finally, when we’re talking about regulatory desires and goals, having watched the various jurisdictions, there are a number of jurisdictions that I get the sense — and this isn’t going to surprise you, Ben — they want lower prices. And I’m just wondering, is there any sort of new or innovative way you’re looking at the regulatory approach in terms of addressing maybe those concerns, increasing investment, but — but addressing those two concerns other than obviously, the general concern that I’m sure you guys have. But do you follow what I’m saying in terms of making investments? And perhaps not seeing the resistance that I think if you look at a number of the AEP jurisdictions that they just ease to new investment leading to higher rates. Do you follow what I’m saying?
Ben Fowke : Yeah. I mean I think — I mean I’m going to turn it over to the team, Paul, but the amount of load growth that we see in our jurisdictions, I mean that’s a great opportunity, economic development that we can be a big part of, either helping to drive it or certainly providing the infrastructure to allow it. Those are great opportunities. And that’s — everybody wants that in all jurisdictions. But again, we’re going to be — very carefully listen to what our jurisdictions want and need and respond accordingly. Peggy or Chuck?
Peggy Simmons : And I’ll just briefly add to that. In 2023, we landed 92 new customer load additions totaling about 5-gig and adding additional jobs to our service territory. So I think that that’s certainly 1 area and aspect of how we’re going to help with affordability as well.
Chuck Zebula : Yeah. And Paul, clearly, the data center load that we’re experiencing is going to create an opportunity, right, to spread fixed costs, right, along a bigger base and improve the headroom opportunity there as well.
Paul Patterson : Okay. Great. And I appreciate it. And good to see you back, then hopeful as well.
Ben Fowke : Thank you. Thank you, Paul. I appreciate that.
Darcy Reese: Thank you for joining us on today’s call. As always, the Investor Relations team will be available to answer any additional questions you may have. Regina, would you please give the replay information?
Operator: Today’s conference will be available for replay beginning approximately two hours after the conclusion of this call and will run through 11:59 p.m. Eastern Time on March 5, 2024. The number to dial to access the replay is 800-770-2030 and for international callers, 647-362-9199. The conference ID number for the replay is 9066570. This concludes today’s conference call. Thank you all for joining. You may now disconnect.
