Shar Pourreza: Fantastic, guys. Thank you so much. Appreciate it.
Joe Dominguez: Thanks, Shar.
Operator: One moment for our next question. Our next question is from Julien Dumoulin-Smith with Bank of America. Your line is open.
Joe Dominguez: Good morning, Julien.
Julien Dumoulin-Smith: Hey, good morning to you. Thank you guys very much for the time. Appreciate it. Maybe I can go back to where some of the last questions were going and speaks to timing and holding back on hedge commitments, et cetera. I mean, to the extent to which you get a thumbs up, thumbs down or what have you on hydrogen, could we see kind of an outsized pace of commitments in the start of next year? And whether that’s tied to data centers or whether that’s tied to capital allocation in terms of buybacks, considering maybe the hubs do or don’t move forward, et cetera? Just want to try to like piece together the different pieces here both on timing. And then also, are you effectively waiting for clarity on hydrogen in order to pursue more of these firm commitments, if you will, on [indiscernible]?
Joe Dominguez: Yeah, sure, Julien. Look, I think hydrogen will occur for us in two different ways. One will be what we’ve called the behind the fence line, clean energy center opportunities where we’ll make the guess. And what we’re looking for in those circumstances when we make the gas behind the fence line of the plant, is people that will take 100% of the offtake of that gas so that we don’t become somehow merchant hydrogen gas players. So certainly continuing those conversations and there are opportunities beyond LaSalle. But we’ll probably focus on optimizing LaSalle and adding more megawatts there first, if we can. But I think that opportunity exists for a number of plants. The other way hydrogen will evolve is through what we’ve called the hydrogen — clean hydrogen by wire, right, where we’re providing a contract, very much like the Microsoft and ComEd-type contract through a customer who will then use that contract to justify their getting the tax credit for hydrogen production.
And those are a lot of players kind of around the country, including many that exist in our customer base. I would say that we’ve added a great deal of focus in talking to those customers and seeing what the opportunities can be. I don’t know yet how fast they will be able to buy electrolyzers and integrate those electrolyzers into those facilities. So I can’t tell you this is a ’25 or ’26 type of thing in terms of actually producing the energy and producing the gas in those systems, and it could be ’27. I think if the rules end up the way that we are hopeful they will end up, you’ll see a flurry of contracting opportunity for us. And you’ll see us begin to scale LaSalle and look at the opportunity to do behind the fence line hydrogen production at a lot of other places.
We haven’t stopped the discussions or the work. And in a certain sense, I would say this and data centers probably are enormous inbounds into the company right now. But both require, in the case of hydrogen, clarification from Treasury as to whether those projects will move forward. In the case of data centers, those just tend to be enormous things that require a great deal of discussion and we’ll update them. I think if the rules work out the right way, I expect we’ll have an exciting ’24 and ’25 around that. And I’m hopeful data centers will play out the same way. But it’s just — it’s too early for me to describe pacing, number of megawatts, impact on the financial outcomes of the company. I’d just say that in 25 years of being in this business, these are the most exciting opportunities we have and I think they’ll have great traction.
But we’ve got to get the work done and then we’ll announce it to all of you, and you’ll see for yourself.
Julien Dumoulin-Smith: Right. But it’s not as if you’re waiting for one or the other here on, let’s say, 4Q, right? Patience is a virtue as they say. And ’27 is out there. And more to the point, it’s not as if you’re holding back on data centers or capital allocation ahead of a decision on hydrogen, just to set expectations?
Joe Dominguez: No. No, that’s right. I think you’ve described it well. And I said it in response to Steve’s question. It’s not like we’re yet confronted with the scarcity of the clean megawatt hours that we produce. We’ve got 180 million of these things. So that gives us the luxury of exploring multiple channels at once. There will be a point in time where we’ll be looking at kind of the financial value of one channel versus another. But I think in the early going year, we’re going to be wide open and we’re certainly working every angle and none are mutually exclusive at this point.
Julien Dumoulin-Smith: Got it. Excellent guys. Best of luck. See you soon.
Joe Dominguez: Thank you.
Operator: One moment for our next question. Our next question comes from Durgesh Chopra with Evercore ISI. Your line is open.
Joe Dominguez: Good morning.
Durgesh Chopra: Hey, good morning. Thank you for taking my question. I just have one question on the asset generation. Year-to-date, it’s kind of been around that 80%, 83% range that hasn’t moved. Last year, I was just looking at the Q3 2022 deck for the next year that would be 2023 back in Q3 2022, you were like 90-ish percent. So this is just nuclear PTCs and sort of your willingness to stay more open next year? Maybe you can just comment on that and how should we think about hedging practice going forward into like ’25 and beyond?
