FirstEnergy Corp. (NYSE:FE) Q1 2024 Earnings Call Transcript

FirstEnergy Corp. (NYSE:FE) Q1 2024 Earnings Call Transcript April 26, 2024

FirstEnergy Corp. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Hello, and welcome to the FirstEnergy Corp. First Quarter 2024 Earnings Conference Call [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Irene Prezelj, Vice President, Investor Relations and Communications. Please go ahead, Irene.

Irene Prezelj: Thank you. Good morning, everyone. And welcome to FirstEnergy’s first quarter 2024 earnings review. Our President and Chief Executive Officer, Brian Tierney, will lead our call today and he will be joined by Jon Taylor, our Senior Vice President and Chief Financial Officer. Our earnings release, presentation slides and related financial information are available on our Web site at firstenergycorp.com. Today’s session will include the use of non-GAAP financial measures and forward-looking statements. Factors that could cause our results to differ materially from those statements can be found in our SEC filings. The appendix of today’s presentation includes supplemental information, along with the reconciliation of non-GAAP financial measures. Now, it’s my pleasure to turn the call over to Brian.

Brian Tierney: Thank you, Irene. Good morning, everyone. Thank you for joining us today and for your interest in FirstEnergy. This morning, I will review financial performance and highlights for the first quarter, provide some updates on key regulatory developments and review FirstEnergy’s shareholder value proposition. For the first quarter, FirstEnergy delivered GAAP earnings of $0.44 per share compared to $0.51 per share in 2023. Operating earnings were $0.55 per share, $0.02 higher than the midpoint of guidance for the quarter versus $0.60 per share last year. It is important to note that higher revenues from investments to better serve our customers and more favorable weather compared to last year were offset by higher planned O&M expenses and the expected decrease in Signal Peak earnings resulted in higher quality utility earnings for the quarter.

Jon will provide additional details later in the call. During the last earnings call, we announced our five year $26 billion investment program to better serve our customers, branded as Energize 365. That plan, combined with our ongoing regulatory updates and our continuous improvement program, give us the confidence to affirm our 6% to 8% long term operating growth rate. We are also affirming our operating earnings guidance range of $2.61 to $2.81 per share for 2024. We are providing guidance of $0.50 to $0.60 per share for the second quarter of this year. Our confidence in the future gave us the opportunity to increase our dividend again to $0.425 per share payable in June. On an annual basis, this would represent an increase of 6.25% versus dividends declared in 2023.

We are continuing to make progress on recruiting and hiring executives to run our five primary businesses. We expect to make announcements in the near term. Earlier this month, we announced the hiring of John Combs as our Senior Vice President of Shared Services. John was most recently an SVP and Chief Technology Officer at JPMorgan Chase. John’s deep background in technology and leadership, as well as his financial acumen make him the perfect person to lead our IT, supply chain, flight operations and corporate and cybersecurity organizations. We are thrilled to welcome John to the team. On March 25th, FirstEnergy closed on the final phase of our multiyear $7 billion equity raise to improve our balance sheet and fuel our growth. We received $2.3 billion of the $3.5 billion proceeds with the balance in interest bearing notes that are expected to be repaid this year.

We are excited to have Brookfield as our partner in the fast growing transmission segment of our business. The impact of this transaction on FirstEnergy as the final phase of the $7 billion equity raise cannot be overstated. The total equity on the balance sheet increased 25% in the three months ended March 31st, that’s truly remarkable for a company of FirstEnergy size. For the first time in this company’s history, we are fully regulated, mostly wires with a strong balance sheet that enables organic investment in our utility companies to improve reliability and our customers’ experience. Following the closing of the transaction, Moody’s recognized the impact of the company by upgrading FirstEnergy Corp. senior unsecured rating to investment grade.

On Tuesday, S&P upgraded FirstEnergy’s corporate credit rating to BBB and our senior unsecured rating to investment grade with a positive outlook. The balance sheet strength and clean business model represented on this slide capture a lot about what excited me to come to FirstEnergy. Let me provide some updates on key regulatory initiatives. People have asked us how they will know when we are making progress on our regulatory plan. I tell them to look for milestones where we are getting fair and reasonable regulatory outcomes. During the quarter, we proved that we can obtain constructive regulatory outcomes across our jurisdictions. We received approval of our rate case settlement in New Jersey authorizing a 9.6% ROE and a 52% equity capitalization ratio.

Even with this increase, JCP&L’s rates remain 26% below our in state peers. The West Virginia Public Service Commission approved constructive depreciation and base rate case settlements. In addition, they approved an expanded net energy fuel charge settlement for recovery of about $0.25 billion through 2026 with no disallowances. For investors looking for milestones that FirstEnergy can obtain fair and reasonable regulatory outcomes, we provided several examples during the quarter. Jon will provide additional detail on the results in his remarks. For the balance of the year, we have an active regulatory schedule. In Ohio, we filed a settlement in our GRID Mod II case asking for the opportunity to complete our advanced meter infrastructure rollout over four years.

A hearing is scheduled for June 5th. Approval of this noncontroversial settlement will bring us to parity with our in state peers. We are expecting approval of our ESP V filing this quarter and we will file a base rate case next month. That case will seek a modest increase in base rates but will reset a number of riders since the last base rate case. Earlier this month, in Pennsylvania, we filed a base rate case requesting an 11.3% ROE and a 53.8% equity ratio. We expect the decision in December with rates effective in January of next year. Before I turn the call over to Jon, I would like to highlight the value proposition that FirstEnergy offers to shareholders. We have completed the multiyear overhaul of our balance sheet and have achieved investment grade status at both Moody’s and S&P.

Our strong balance sheet differentiates FirstEnergy from many of our industry peers and that we do not anticipate incremental equity needs to fund our $26 billion investment plan. Our long term annual operating earnings growth rate combined with our dividend yield represent a total shareholder return potential of 10% to 12%. Our earnings quality is vastly improved driven by growth in our core regulated businesses, and our customers’ affordability remains strong throughout the investment period. At the end of a significant business transition led by our Board of Directors and management team, FirstEnergy represents a high quality and attractive risk value proposition to our shareholders. With that, I will turn the call over to Jon.

Jon Taylor: Thank you, Brian. And good morning, everyone. Despite another mild winter, we are off to a good start this year with strong execution and financial discipline from our team that resulted in operating earnings above the midpoint of our guidance. And we are reaffirming our full year operating earnings guidance range of $2.61 to $2.81 a share, which represents a 7% increase versus the midpoint of our 2023 guidance. Today, I’ll review financial performance for the quarter, our progress on key strategic regulatory initiatives and close with some details around the balance sheet. Looking at our financial performance for the quarter. Operating earnings were $0.55 a share, which is above the midpoint of our guidance despite the mild temperatures this winter that impacted retail sales and includes a planned increase in operating expenses as discussed on the fourth quarter call.

This compares to 2023 first quarter operating earnings of $0.60 a share. As we also mentioned on the fourth quarter call, earnings growth this year will be back end loaded, given the effective dates of rate cases in West Virginia and New Jersey and planned increases in operating expenses in the first half of this year associated with the timing of maintenance work. Our first quarter results are detailed in the strategic and financial highlights document we posted to our IR Web site last night. At a consolidated level, first quarter earnings of $0.55 per share were impacted by higher planned operating expenses and improved earnings quality from an expected decrease in earnings from Signal Peak, partially offset by increases from new base rates and rate base growth in formula rate programs.

And although customer demand was not a significant driver year-over-year given the mild winter in the first quarter of 2023, retail sales were down 6% versus planned, primarily associated with heating degree days that were 14% below normal, impacting results by $0.07 a share versus our plan. Let’s also take a few minutes to review our segment results, which you will notice in our filings and presentation the segment reporting change consistent with how we’re managing the business. We are now organized into easy-to-follow segments of distribution, integrated standalone transmission and corporate. This streamlined and transparent reporting places entire companies and individual segments, simplifying reporting and eliminating reconciliations. In our distribution business, operating earnings were $0.30 a share versus $0.33 per share in the first quarter of last year, impacted largely by the planned increase in operating expenses I mentioned earlier, specifically around vegetation management work, partially offset by an increase in rates from capital investment programs and lower rate credits in Ohio.

In our integrated segment, operating earnings were $0.15 a share compared to $0.14 per share in the first quarter of last year. Results increased largely due to the implementation of base rates in all three jurisdictions in this business and rate based growth in formula rate programs, including integrated transmission investments, partially offset by planned increases in operating expenses. In our standalone transmission segment, operating earnings were $0.18 a share versus $0.17 per share in the first quarter of 2023, resulting from a 9% year-over-year rate base growth from our formula rate transmission capital investment program. And finally, in our corporate segment, losses were $0.08 per share versus $0.04 per share in the first quarter of 2023, primarily reflecting the lower planned earnings contribution from our one third ownership interest in the Signal Peak mining operation, decreasing from $0.08 per share in the first quarter of last year to $0.03 per share in the first quarter of this year.

Turning briefly to capital investments. First quarter CapEx totaled just under $900 million, an increase of nearly 22% versus 2023 levels and slightly ahead of our plan across each of our businesses, focusing on grid modernization, transmission and infrastructure renewal investments. As a reminder, CapEx for this year is planned at $4.3 billion versus $3.7 billion in 2023. Turning to regulatory activity. We are very pleased with the outcomes in the recent base rate case orders, consistent with our plan that allows for solid regulated returns for our investors while keeping rates affordable for customers. And we’re committed to our customers and our communities to enhance reliability performance and support the energy transition through our Energize 365 capital investment program.

As Brian mentioned, in mid-February, the New Jersey BPU issued a final order on JCP&L’s base rate case. The new rates, which customers will see effective June 1st and continue to be well below our in-state peer average, represent an $85 million rate adjustment on rate base totaling $3 billion, an ROE of 9.6% and a 52% equity capitalization ratio. And we are currently working through our Energize New Jersey infrastructure improvement proposal initially filed in November, including over $900 million in capital investments over five years aimed to enhance reliability and modernize the distribution system. In West Virginia, on March 26th, we received a final order from the Public Service Commission on our base rate case with rates effective March 27th.

The case resulted in a $105 million rate adjustment on rate base of $3.2 billion, an allowed ROE of 9.8% and a 49.6% equity ratio. Rates for our West Virginia customers remain about 22% below our in-state peers. Additionally, as Brian mentioned, in West Virginia, we received an order on our ENEC case for an increase of $55 million. We have been successful in reducing the $255 million deferral down to $168 million with full recovery expected by 2026. Now let’s move on to current activity with Pennsylvania. Earlier this month, we filed a base rate case requesting a $502 million rate adjustment on rate base of $7.2 billion, an 11.3% proposed return on equity and a 53.8% equity capitalization ratio. The case builds on our service reliability enhancements in the state with additional investments in a smart, modern energy grid and customer focused programs while keeping rates comparable to other Pennsylvania utilities.

Key components of the case include implementing a 10 year enhanced vegetation management program to reduce tree caused outages, reduce outage restoration time and reduce future maintenance costs, recovery of costs associated with major storms, COVID-19 and LED streetlight conversions and changing pension and OPEB recovery to the delayed recognition method, which is based on traditional pension expense with amortization of previously recognized cumulative actuarial losses. The case also includes a blended federal state statutory tax rate of approximately 27% but also continues to provide customer savings from previous changes to federal and state tax rates. Additionally, the application proposes a pension OPEB normalization mechanism to track and defer differences between actual and test year expense using the delayed recognition method.

In addition to the base rate case, we plan to file a third phase of our long term infrastructure improvement program this summer, which will include capital investment programs to improve reliability for the customers of Pennsylvania. And finally, turning to Ohio. Earlier this month, we filed a settlement for the second phase of our distribution grid modernization plan, Grid Mod II. The settlement includes a $421 million four year capital investment program to continue modernizing the distribution electric system by completing the deployment of 1.4 million smart meters to our customers in Ohio. Finally, next week, we plan to file a prefiling notice of our Ohio base rate case with a full application and supporting schedules by the end of May.

Key highlights of the case will include a 2024 test year with over $4.3 billion in rate base and an equity capitalization ratio reflecting the actual capital structure of the companies, a plan to recover investments in riders’ DCR and AMI, which includes the Grid Mod capital investments in base rates and reset those riders to zero, and some of the same other features that we included in other rate case applications, including pension recovery and pension tracking mechanisms. The current expectation is a proposal of a modest net increase to customers of less than $100 million compared to current revenues and an overall average impact of less than 5% of total revenues across all customers, which will be refined over the coming months. And finally, just to touch on the balance sheet and the closing of the FET transaction.

Obviously, a lot of hard work goes into any transaction like this but this was a great team effort, and we couldn’t be more pleased with the results. Of the $3.5 billion in total proceeds, $2.3 billion was received at the end of March and was deployed immediately consistent with our plan to pay off short term debt and to redeem long term debt totaling close to $1.4 billion, of which $460 million was at FE Corp. We expect to receive the remaining $1.2 billion later this year, which will be used to fund our capital programs and additional liability management depending on market conditions. This transaction completes a series of transactions over the last two and half years that resulted in over $3 billion in high cost debt redemptions at FE Corp., close to $2 billion in utility long term debt redemptions and $2 billion to pay off short term debt that would have otherwise been financed with long term debt at our utilities.

And we are pleased to be back with an investment grade credit rating with all three rating agencies and understand and appreciate and respect the importance of this to all of our stakeholders. Thank you for your time today. And we’re off to a solid start this year with strong execution and a significantly stronger balance sheet to fuel our growth going forward. Now let’s open the call to Q&A.

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Q&A Session

Operator: [Operator Instructions] Our first question is coming from Shar Pourreza from Guggenheim Partners.

Shar Pourreza: So Brian, I know obviously — Jon and Brian thanks for the color on the Ohio case, I think it touched on some of the questions I had on that. But look, the state is likely going to become sort of this epicenter for hyperscalers. So I guess I’m curious if there’s going to be any sort of kind of data center focused rate design or tariff filings in this case to maybe account kind of for these opportunities, especially to trying to balance the impact to other customers while trying to track this business? And then maybe just as a follow-up there, Brian, how is the dialog going with data centers in general?

Brian Tierney: So let me start with the second one. The dialog with data centers is really positive. We’ve been out to see Josh Snowhorn, and his team out of Quantum Loophole right outside of Frederick, Maryland, it’s amazing what they have going on there. It’s kind of fascinating to see. We have two 230 kV lines that end in an open field where there used to be an aluminum smelter and now Josh and his team are building that huge data center complex. So we’re in direct dialog with them, they will be one of our biggest customers over time and look forward to continuing that dialog. We’re also seeing as things like expand out from data center hubs from Northern Virginia. Now you’re seeing in the Panhandle of Maryland, the Quantum Loophole folks, we’re seeing the same thing in Ohio.

And as things expand out from Central Ohio, the place where I used to work and it’s coming up into our service territory as well, and we’re also seeing interest in Pennsylvania. Given what’s happened with a number of power plant retirements over the years, our service territory has ample brownfield sites that have land available and connectivity to the high voltage transmission system. So we think we’re well positioned for some of that growth. We’re continuing to invest as we go forward. The PJM open data center three that we’re able to fund about $800 million to help enable that growth, we’re excited about the opportunity going forward. John, I don’t know, are we doing anything tariff wise to attract these, or are we well set up given the tariffs that we have?

Jon Taylor: I think it’s something that we will take a look at over time. Our tariffs are set up were such that some of these customers would be transmission related customers. So the revenue uplift to the distribution companies wouldn’t be as significant as you would see maybe in a residential customer, and that’s by design. So it is something that I think over time we’ll take a look at as well as I’m sure other utilities will take a look at. But at this point in time, we don’t have anything that we’re planning for.

Shar Pourreza: And then, Brian, lastly for me and sorry, I got to ask this, but it’s causing a little bit of angst this morning with investors. There’s some new language in the queue kind of mentioning on potential fines coming from the OOCIC, I guess how do you book in the range of outcomes there? I know, obviously, the language is not going to be super material. But is there any kind of sort of read throughs or knock-on effects on the ongoing PUCO investigations or any other investigations there?

Brian Tierney: I don’t think so, Shar. There are two new things that we raised in that OOCIC disclosure. One was at the beginning of the disclosure, we talked about — we have traditionally talked about there being nothing that we were aware of that was outside of the DPA. Well, during the quarter, the OOCIC brought indictments against householder for things that had nothing to do with the DPA and we were unaware of that activity, which they found and obtained indictments on. And the other component is in regards to that investigation, as well as the Attorney General has a civil suit against the company. We’d like to put both those past us and we may have to put a little bit of money on the table to do that. So we don’t think it will be material but we’d like to put a period on both those issues as it relates to the company and move on.

I think some of you saw the language that the Attorney General used in the prior indictments when he complemented the company on its cooperation with his office and viewed us as a victim of the offenses that took place. So we think it’s a constructive relationship and we just like to put a period on it and move on from there.

Operator: Your next question today is coming from Michael Sullivan from Wolfe Research.

Michael Sullivan: Maybe just — I know you’re about to file this year and I appreciate all the kind of upfront detail in Ohio. But maybe if you could just give a little more on how you are able to keep the rate hike request so low in Ohio after being out for so long?

Brian Tierney: So a lot of the activity that we’re doing is taking things that have been handled in riders during that interim period and putting it in base rates. So things that customers were always paying for but they weren’t in base rates. So there’s no customer increase associated with that. And then we’re looking at refreshing the ROE, some cost structures. And we anticipate that those things will be $100 million or less in terms of gross increase and we expect the net impact on customer rates to be less than 5%.

Jon Taylor: Michael, I’ll expand just a little bit. If you think about rider DCR, that’s been in place for over 10 years now and we’ve been able to earn on pretty much all of our investments in the distribution system over those 10 years. And to give you a sense of magnitude that rider alone is close to $400 million annually. And then if you look at the Grid Mod rider that probably got kicked off a few years ago with our Grid Mod I implementation, it’s close to $100 million. So over the years, even though base rates haven’t changed in over 10 plus years, we’ve been able to increase the returns on our investments through those riders, and a lot of this case is just moving those riders into base rates.

Michael Sullivan: Just a quick follow-up on that. With respect to the riders, does the outcome here in the next month in ESP V and how riders are treated there have any impact on how you approach the base rate case filing?

Brian Tierney: No, I don’t think so, Michael. I mean, this is capital that has been prudently spent. It’s been on distribution reliability. I think it’s been subject to audits in the past. So I think that is simply going to be moved from those riders into base rates. And if you look at the path in other jurisdictions, you really don’t have an issue with moving capital that you’ve deployed in riders in the base rates, that’s typically fairly straightforward in any type of rate proceeding.

Michael Sullivan: And last one for me, Jon. Just the — congrats on getting back to IG. And just what are we thinking for timing and prospects for maybe even mid-BBB? Sounds like you have the metrics to support it. Is it doable at both agencies and potential timing there?

Jon Taylor: I’m not going to speak for the agencies. But S&P left us on a positive outlook and I think they’re looking for the expiration of the deferred prosecution agreement, which will be in July of this year. I think we also need to build a track record of hitting our forecast and I think that’s going to take some time to do that. And so that’s what I think they’re looking for and that’s what our plan is.

Operator: Next question is coming from Jeremy Tonet from JPMorgan.

Jeremy Tonet: Just wanted to kind of touch base, I guess, on how things are progressing against strategic initiatives to kind of realign the organization, bring in new hires, decentralized decision making and assign KPIs further down the structure. How is that being received? How do you see, I guess, the culture changing? Just wondering any thoughts on how that’s progressing?

Brian Tierney: It’s progressing really well. So we’ve added Toby Thomas as the Chief Operating Officer. Wade Smith, as the head of FE Utilities. And we just announced John Combs coming in. And these folks are hitting the ground running, making an impact right away. If you look at how we’re managing the company, we’re managing it the way we’re reporting it in segments now by those five major operating companies that we have. And things like Energize 365, that is organized and planned according to those major business units. So the plans that summarize up to that $26 billion spend over five years are all coming from those major business units and they have the plans to put that capital to work for the benefit of our customers by business unit.

And so it’s working the way we thought it would. We’ve transitioned from a CapEx that’s kind of break fix, repair in kind to one that gets our customers ahead in terms of reliability and gives us the opportunity to improve the customer experience rather than just treading water. And the transaction that both Jon and I talked about in our remarks enables that, right? You can’t make the type of investments that we’re talking about making without the strong balance sheet that we’ve had through the capital raises over time. So everything is coming together and working as it should. The moneys come in the door, the balance sheet is strong and we have the plans by business unit to put the dollars to work. And you’re seeing it from ’23 to ’24 and we have plans going out for four additional years as well to make this happen.

So it’s working the way it should, the way we envision it, and we’re off and running.

Jeremy Tonet: And maybe following up on — putting the dollars to work, with regards to the Energize 365 CapEx plan. Could you walk through the clean energy part a little bit more within the overall plan? And just wondering how that breaks down between solar energy efficiency, EV infrastructure, energy storage, different initiatives and how you see the time line for that unfolding? And where could that go over time, I guess?

Brian Tierney: So a lot of it, Jeremy, is some things that we’re doing on the wire side to enable the energy transition. So you’ve seen two major pieces of that. One was the PJM Open Window 3 where we’re able to put $800 million to work and the other is the New Jersey offshore wind transmission component where we’re putting over $700 million to work. So significant components well over $1 billion in those initiatives, in addition to what we’re doing with solar generation in the state of West Virginia on our way to rounding out a 50-megawatt commitment that we have there and would like to see two more of those 50-megawatt commitments as we get further subscriptions. But a lot of it rather than being on the generation side is really on the wires component of the business, and that’s where the bulk of that $26 billion spend is going to be.

Jon Taylor: Jeremy, I’d just would add on a little bit. If you just look at the clean energy component of the $26 billion, it’s a little less than 10% of the total portfolio. And like Brian said, a lot of that is in the state of West Virginia with the expected build out of additional solar, as well as the energy efficiency investments that we need to make in New Jersey to hit the state required goals on consumption usage. So we’re working through that program right now as we speak. And we should have clarity, I think, later this year on the energy efficiency CapEx in New Jersey sometime later this year.

Brian Tierney: One final piece that we’ve gotten questions on also, Jeremy, is that the DOE GRIP program and whether or not we’ve made applications for that, we proposed five projects and four of them we were asked by the DOE to proceed. And they include everything like distributed energy management, AMI, grid resilience, smart grid and storage. And so about $500 million worth of projects we’re moving forward with in the GRIP program and hope to get some positive results on that later this summer.

Jeremy Tonet: And just one last one, if I could, regarding Signal Peak and recognize it’s a shrinking part of the plan over time here. But I think there’s just been some reports out there about BLM delays and how that impacts operations down the line there, whether it has to shut at a certain time. Just wondering any thoughts you could share with us there?

Jon Taylor: No disruptions in the mine that we’re aware of. In fact, we have in the plan about $0.12 of earnings contribution for the year. They contributed $0.03 in the first quarter. So they’re on track with their plan.

Operator: Your next question today is coming from Carly Davenport from Goldman Sachs.

Carly Davenport: Maybe just on the pension volatility relative to what you’ve done so far. How good things like the proposals you’ve got in the Pennsylvania rate case around pension and OPEB recovery and the normalization mechanism impact the volatility levels that you see going forward?

Jon Taylor: Well, if we’re able to successfully get the pension tracking mechanism, that goes a long way in deferring the volatility on to the balance sheet, because essentially, you would be tracking to your test year expense and any changes from that point forward, both positive or negative to that would be deferred on the balance sheet. So the volatility would be significantly reduced if you’re able to achieve some of those pension tracking mechanisms. Now we’ve applied for that in West Virginia, Maryland and New Jersey. Last year, we were unsuccessful there. We’ll apply for those mechanisms in Pennsylvania and Ohio this year. But it is something that we’ll continually go after even if we’re not successful this year, because I think it’s important for us to make sure that we manage that volatility accordingly.

I mean the other thing we did last year is we did the pension lift out where we looked at our former competitive business and lifted out about half of that liability at a favorable pricing, about a 95% of par, about a 5% discount, which also reduces the volatility in the pension plan by about 5%, 10%. And we plan to do another pension lift out at some point in time either later this year or towards the end of the year. So something that we’re looking at right now.

Brian Tierney: Carly, the beauty of that tracking mechanism is that the regulator is never wrong, like there’s always the true up. And so we’re never making more or less than what we’re asking for in rates and it’s always the right amount because it’s based on the numbers. So we think it has a virtue that should be appealing to the regulators and others in our cases as well.

Carly Davenport: And then maybe just as you think about the balance sheet. Are there any factors that we should be thinking about that could push the receipt of those remaining FET proceeds beyond the latter part of this year?

Brian Tierney: So they’ve already filed for application with the last co-investor and they’ve asked for accelerated approval. So I’m not anticipating any delay in that. So my expectation is that we should get the proceeds later this year.

Operator: Next question today is coming from David Arcaro from Morgan Stanley.

David Arcaro: Maybe back on the Ohio rate case, I was wondering, are there any new mechanisms or new capital programs that we should watch for that might come with the filling? It didn’t sound like it, but anything new that you would plan to bring into this case?