Nick Campanella: That’s really helpful. Thank you.
Jason Wells: Thank you.
Operator: One moment for the next question. The next question comes from Jeremy Tonet with JPMorgan Securities. Your line is open.
Jeremy Tonet: Hi. Good morning.
Jason Wells: Good morning, Jeremy.
Jeremy Tonet: I’m just wondering, going back to the SRP here, if you could frame overall wildfire mitigation needs relative to the $140 million in the SRP filing. And looking more broadly, how might SRP capital composition evolve over time from this first application and what does the SRP investment runway look like at this point?
Jason Wells: Yeah. No. Thanks for the comprehensive question. Look, from a wildfire standpoint, as you highlighted, $140 million isn’t a significant driver of the overall $2.2 billion to $2.7 billion plan. I think it’s important to understand why, 60% of our system is currently underground. Jeremy, as I know you know, we have high relative humidity here. So all things being equal, we have significantly lower wildfire risk than our peers. That being said, obviously, we haven’t sat on our hands. We’ve been addressing this risk with changes in operations, shutting off automatic reclosers, enhanced inspections during periods of higher wildfire risk. But this plan basically addresses about 1% of overhead miles that are in higher fire risk areas and so this is, probably, under the current set of conditions, sufficient to mitigate our wildfire risk.
Now, obviously, we’re going to continue to look at weather patterns, drought patterns and see how that evolves over time. But I don’t really see the wildfire mitigation being a significant long-term driver of CapEx. Where I do see further opportunity beyond this plan is really on the distribution side. As I said in my prepared remarks, we have been really focused on hardening the backbone of our system, the electric transmission and the substation flood control efforts. We will largely be through those programs by the end of its first cycle. And so the real opportunity, as I mentioned, is on the distribution side going forward and really creating a more resilient, reliable overhead electric system for our customers. So more to come on that front.
We’re happy to make this first filing. And I see the opportunity for continued CapEx growth as we make subsequent filings in the future.
Jeremy Tonet: Got it. Makes sense. If there’s one thing we know, it’s that Houston is humid. I’ll leave it there. Thank you.
Jackie Richert: Operator, I think, we have time for one more question, please.
Operator: Okay. One moment. And the last question will come from Durgesh Chopra with Evercore. Your line is open.
Durgesh Chopra: Hey. Thanks for giving me time. I appreciate it. I’ll ask two very quick questions and I’ll ask them together. Just first, can you help us sort of pen out a timeline for the Resiliency Plan approval, what to look for there? And then second, Jason, in your comments, you mentioned regulatory lag as a tailwind opportunity. Can you just quickly remind us what your earned or regulated ROEs are as of the end of the first quarter? Thank you.
Jason Wells: Yeah. Thanks, Durgesh, for the questions. On the first side, the timeline for approval of the Resiliency Plan, I think, the legislation called for about a six-month approval period. What I will say, this is first-of-its-kind legislation, so we’ll have to kind of get in the middle of it. I’m sure there’ll be a number of parties sort of intervening, but I would look towards that tail end of this year, calendar year, to get a final decision on the Resiliency Plan file. On the question on regulatory lag, we’ve historically seen, particularly here in the Texas business, about 150 basis points on average regulatory lag. And what I would say is, we’ve sort of meaningfully reduced that amount, but it’s an odd time to really be calculating kind of what regulatory lag is at the end of the first quarter, just because we’re in the middle of our rate case filing, and as a result, we don’t have access to the full complement of capital recovery mechanisms that we will have sort of on the other side of this rate case.
And so just know that we’ve taken steps to begin to reduce that historical regulatory lag, and I think, we’ll be in a place to give sort of a more normalized view of that on the other side of the rate case.
Durgesh Chopra: That’s very helpful. Thank you so much again. Appreciate the time.
Jason Wells: Yeah. Thanks, Durgesh.
Jackie Richert: Okay. Operator, with that, that concludes our call for the quarter. Thanks everyone for joining.
Operator: This concludes CenterPoint Energy first quarter 2024 earnings conference call. Thank you for your participation. Have a great day.
