Todd Jacobs: Julien, this is Todd. We haven’t categorized it. We define it as small but growing part of our overall earnings. We see opportunity in the space. The way that I like to characterize this is that it’s really a confluence of opportunity with our geography. We live and operate in very much agriculture-rich areas. We have expertise in this space with — and the fact that we understand pipelines and gas quality. And so we’ve seen a lot of interest. And so what we’ve done is, we’ve talked in the past about our interconnect projects, we’re growing to 10 in 2024. But what we’ve seen is further opportunities that we wanted to get a small but dedicated team, really with a really good background on engineering and commercial expertise to go after a more interesting and potentially more lucrative projects.
And so what we announced just a couple of weeks ago was an acquisition of our production facility in Dubuque, Iowa. That’s our first foray, really into the nonregulated space. We plan to keep it relatively small to start if we get into more material space, we’ll certainly talk about that more publicly. But we do see opportunity. We see a lot of interest in our service territory. We’re excited about the business. We think it’s a good overall story for removing methane that would have otherwise been released into the atmosphere and putting that into the natural gas system. There’s a lot of interest from other utilities and other producers within our service territory for these type of assets. So, we see upside in the future, but we do see it small to start, but increasing in the future.
Kimberly Nooney: And Julien, the only thing I would add is think about it as utility-like or better returns, even though it’s immaterial, just think about it from that perspective.
Todd Jacobs: Yes. And the only other thing I’d add to that is that we want to maintain a very solid investment thesis, Julien, where we’re looking at long-term offtakes reliable revenues and really staying away from commodity risk. So, it’s utility-like, but we do want greater upside.
Julien Dumoulin-Smith: Right. So, it’s fairly contracted. R&D assets that you’re looking at?
Todd Jacobs: Correct. That’s correct.
Julien Dumoulin-Smith: Excellent. Wonderful. Excellent. And then just clarifying the data center commentary and the tariff commentary. Just — so basically going from 5% to 10% EPS contribution through the forecast period implies about 1% of the growth here. The per annum is driven by this tariff and associated load. How do you think about the mix between Bitcoin and data centers? And specifically within that, how do you think about the sort of the reliability characteristics that are being offered? Is there some potential to effectively upsell these customers over time in a more firm products, considering, I suppose, historically, you’ve talked more about coin customers with you guys, if you will, versus more of the data set a types?
Todd Jacobs: Yes, what I can say is that we have been very selective about the customers that we’ve chosen. We actually — just given the demand from blockchain customers, a couple of years ago, we actually did a reverse RFP. And so we were very selective about who we chose, somebody with a good operational background, somebody who is financially sound. We’ve had a lot of success with that customer, and they would say the same about us. They have access to market energy. We have quite a few protections for our customers, in the sense we talk about the concept of capital light, meaning that the customer makes those investments in infrastructure and to serve that load, and then we offer access to the market. So, it’s really that idea of access to the market for those customers.
So, we see particularly the customers that we’ve chosen as being solid customers with long-term agreements. And again, they found a beneficial the way we set up these contracts as well. I hope that answers your question, Julien.
Julien Dumoulin-Smith: Yes, fair enough. Great guys. Thank you so much. Appreciate it. Best of luck.
Linden Evans: Thank you, Julien.
Kimberly Nooney: Thank you, Julien.
Operator: Thank you. [Operator Instructions] Our next question comes from Andrew Weisel with Scotiabank. You may proceed.
Andrew Weisel: Hi, good morning everybody.
Linden Evans: Good morning Andrew.
Andrew Weisel: First question, just to clarify, does the 2024 EPS guidance reflect the freezing cold January weather?
Kimberly Nooney: We, in our earnings guidance, assume normal weather and so note that upside, downside that will be part of our 2024 numbers.
Andrew Weisel: Okay, great. Good start here then. Next, you mentioned the potential for EPS to — if you have growth to accelerate over the years. Did you mean that as sort of a gradually accelerating outlook? Or will it be lumpy? Specifically, I’m looking at the CapEx spike in 2026. I imagine that would drive strong growth in 2027. Am I right there?
Kimberly Nooney: Actually, it will drive strong growth in 2026 and forward when you think about the overall capital plan. So, what we’ve said is our growth will be 4% in the front of the plan, accelerating over time, and you can see that as a result of the capital investments that we’ve outlined.
Andrew Weisel: Okay, great. And then the third one, if I may. FFO to debt, I know you’ve been pretty clear about the targeted 14% to 15%. What was the actual for 2023? And do you — is that target a good range for 2024?
Kimberly Nooney: Absolutely, Andrew. So, we’re still targeting the 14% to 15% as we noted. With Moody’s, we have — we’re in excess of that. For S&P, we’re closer to the 13% and we’ll be marching to the 14%. And then with Fitch, when you include the Storm Uri, cash flows were around 5 times to 5.2 times for their FFO adjusted leverage.
