Julien Dumoulin-Smith: Excellent. And the gain just for this year, you’re still expecting that here through the balance of the year. It’s not in ’24, right? I know we talked about it a little bit. I just wanted to clarify your earlier comment.
Pedro Blazquez: No. Yeah. In ’24, we don’t need a gain. I think, remember, ’23, it was the year that we call it transition year because, again, I’m very pleased, and I will make some comments on the end about the things we have done. But I think we could be here now with two or three of these items not being obtained. And we will be in a material different way from an earnings point of view, not only for ’23, but going forward. I think we have been able to achieve things that, in my opinion, were not credible a year ago. And from that point of view, remember ’23 was the transition to a full ’24 and ’25 based on ordinary cost of business. I think many of you said last year, what did you put an extraordinary gain. And we said, well, you can do the numbers with and without because it’s a onetime up. And if it happens, fine, and if not, we moved into — so that’s why for us. We continue to work on that. And if it happens fine. And if not, we will not need that for ’24..
Operator: And we’ll go next now to Angie Storozynski at Seaport Research.
Agnieszka Storozynski: Thank you. Thanks for squeezing me in. So I have a question about transferability. You mentioned the $100 million from existing assets that you are monetizing using the IRA transferability. I was just wondering if you’re changing the way you plan to finance renewable power projects going forward? I mean, do you expect to use tax equity versus transferability? And also how about levering projects basically at the project level instead of using [indiscernible]?
Patricia Cosgel: Yeah. Sure. Well, definitely, Angie, we definitely see a huge backdrop from transferability that was enabled by the IRA. This initial transaction was our first foray into being able to early adopt some of those provisions of the IRA, because we do have a number of assets that are generating PTCs that we were there just retaining and holding on our books. These are assets that are not in tax equity structures, because we haven’t always used tax equity. So now with IRA, we’re able to monetize [indiscernible] and benefit from the cash, which actually has a material impact for our credit metrics. So that was kind of the first step to do that. As they’re generated, we can continue to sell those assets. But we have looked across the business, and we’ll continue to do that to see where we can use transferability.
We definitely think that there are — in projects where we are doing PTC, it makes a lot of sense. Certainly, we have talked a lot about this large repowering plans that we have ahead of us. Those are assets where that could make a lot of sense, because those are assets where the CapEx is a lot lower than a new build where you already have depreciated assets that — because they’re existing assets. So you’re not generating a lot more of tax losses. So PTCs and transferability makes a lot of sense. Again, the transferability proceeds are cash from operations, so they actually have a big benefit to our credit metrics. We do think we’ll still look at tax equity. I think it’s important that we continue to monitor. There isn’t sort of a one-and-done review, because we have to take a look at our tax capacity, and we do have a lot of NOLs on our balance sheet.
So for large projects, particularly for ITC projects where we have a larger CapEx where ITC makes sense, tax equity can make more sense. So we’re not just continuing to add to those NOLs. So I do think, in summary, it’s a very valuable tool that we have, and we will look at it more, not only for these ad-generated PTCs, but for new projects and repowering.
Agnieszka Storozynski: Okay. And in those cases where you use transferability, the portion of CapEx that would usually be financed with tax equity would be financed with what additional debt? Again, just — okay.
Patricia Cosgel: Yeah, it really depends on the asset, but we — that’s right. The other part of your question, we are looking at just future financing options. It depends on how much we — and we grow the business. I think it has been historically cost effective for us to do green [indiscernible] at the parent company to support that business, but we are looking at options to fund with project debt as well.
Agnieszka Storozynski: Okay. And then changing topics to PNM. So we’re obviously waiting for the decisions from the Mexico Supreme Court. And I’m just — again, we don’t know when exactly it happens or what it will be. But I’m just wondering, one, given how long this has been taken and that we are in a dramatically different PE multiples for utilities. So I’m asking, one, about potential renegotiation of the price? And number two, if you had to — if the Supreme Court does not side with you what kind of route should we expect? Would you refile? And then again, would that give you a chance to potentially reprice this transaction?
Pedro Blazquez: I think two comments. The first one is we’re just waiting for the Supreme Court decision, and we prefer not to comment either in the outcome or potential things after that. Let’s wait for that. The second one, I think when you do M&A transactions, you don’t renegotiate the price in one year, things go up or down. So from that point of view, I think we always look at valuations on a present value basis and that’s the approach to do it, okay? So — but I think we just need to wait for the Supreme Court. And there is a history of somebody makes a comment and then people say that we said it was going to be four months, three months, two months, I think we prefer to be silent. Let’s respect the court decision, and let’s wait for that decision and we go from there.
Operator: Ladies and gentlemen, that is all the time we have for questions this morning. I’d like to turn things back over to you Mr. Azagra for any closing comments.
Pedro Blazquez: Okay. Thank you very much to everybody for being here today. I think in my case, the first thing I’d like to do is, as I said, to say thank you to the employees, to the union suppliers. Many of them have been supporting us not stopping some difficult matters we have on the table, some rate case decisions, government control power and I think it’s a pleasure to see how committed they are being at the [indiscernible] Avangrid in a group. And from that point of view, I would say first, thank you. The second comment I want to make is — and again, we’ll go back to this at the end of the year. But if a year ago, I was to be asked if I was comfortable we were going to have a rate case in New York as we have got a rate case in Maine, NECEC being built, Park City terminated and Commonwealth terminated, I think probably the answer from everybody, from me, would have been no, okay?
So I think right now, to see that additional $3 billion in CLCPA, $6 billion approved in New York, $0.5 billion in Maine. I think this is beautiful, okay? I think this is basically the future being achieved this year and the foundation for the next five years. So from that point of view, earnings, CapEx, rate base, projects in renewables, we said 300, we are right now in 500 megawatts, good returns, renegotiations everywhere. I think the dynamic is different. So the only comment I would make right now is that the success, I think, in the last 12 months is as simple as saying that’s work. And let’s make sure we need everybody nonstop. I think the teams right now are meeting legislatures, executive brands, public advocates, Attorney Generals, investors, rating agencies, public commissions, nonstop.
