John Somerhalder: Yes, David, the Pleasants plant has some improved environmental controls compared to at least one of our facilities. And the commission in West Virginia has asked us to look at — could it make sense to continue to operate that plant as part of the generation that we would own to support our customer load. We are consistent with what we’ve been asked by the commission. We are evaluating that at this time. And I think we’ll have some results in late March that will inform that decision. West Virginia and the load for the customers and the economy there are keen interest. So, we will work hard to see if that could make sense, but I can’t prejudge at this time what the result may be. But we will comply with what we’re asked to do there and do a good faith analysis to see if that could make sense.
And we’ll be able to let you know as we conclude that what the next steps could be or what additional steps the commission may take to further evaluate that depending on the evaluation.
David Arcaro: Okay. Great. That’s helpful. And then I was curious just in terms of the offsets that you dug into for the pension in 2022, the $0.38, I was wondering if there’s a — or the $0.38 that you planned to offset. I was wondering how much of that ends up being one-time in nature and doesn’t recur kind of what’s in your control as to — is there any of that, that you would see recurring going forward as a more sustainable source of earnings?
Jon Taylor: Yes, David. So if you think about just year-over-year, the $0.38, I would say probably 25% of that is coming from OpEx that we accelerated from ’23 into ’22, our financing plan, which would be permanent the debt tender as well as the open market repurchases that we executed in the back half of last year. Signal Peak is a contribution to the $0.38 offset and then some other, what I’ll call, cost initiatives and other benefits that we’re driving towards — round out the difference. There is some timing or some of those benefits that aren’t necessarily sustainable into the future, but we are trying to put in programs and controls in place to continue to drive out costs throughout the entire organization. So that’s kind of the way that we’re thinking about it at this point in time.
Operator: Thank you. Our next question comes from the line of Julien Dumoulin-Smith with Bank of America Merrill Lynch. Please proceed with your question.
Julien Dumoulin-Smith: Listen, just coming back to the rate base growth question. Just I wanted to understand a little bit more how to think about the net rate base growth relative to the 7% growth disclosed. And how do you think about that accelerating here? I know you said in your comments, you expect to revisit some of the growth later this year potentially. But just to understand like what the baseline is in terms of like net growth back to yourself from rate base and how that might accelerate here just to reconcile the core 6% to 8%? Or alternatively, how much of the outlook when you think about the 6% to 8% is driven by some of the under-earning improvement that you alluded to earlier.
Jon Taylor: Well, maybe I’ll answer it this way. So the 7% rate base growth, ’24 and ’25 supports the earnings of the 6% to 8% through that time period. And we continue to look at the capital plans post 2025 and based on some work that we’ve done over the last year or so, we believe there’s even incremental capital to that to support the electrification support EVs and support other reliability and resiliency type of program initiatives. So, I do think you would — you could see that annual CapEx number start to increase beginning in 2026. But like I said, we’ll provide all that color in that detail when we’re ready.
Julien Dumoulin-Smith: And just to clarify, when you’re ready, that’s the event later this year that you’re alluding to? And then related to that, just the rate base growth, that 7%, what’s the delta that’s not owned in terms of the FET sell-down? Just to clarify that as a baseline.
Jon Taylor: So yes, so — so when we sell off the 30%, let’s say that the total transmission business by that time would have $11 billion or so in rate base. So 30% of that would be owned by Brookfield effectively.
John Somerhalder: Yes, that’s a different 30%. If we sell off 30% additional plus the 19.9% represents about 30% of our total transmission. So the math works just like John indicated, but two different 30%s.
Julien Dumoulin-Smith: Got it. But just to reconcile the outlook here, you’re going to provide a roll forward later this year that would include an updated CapEx look beyond ’25 that should show an accelerating CapEx budget for ’26 onwards? And just trying to set expectations on what that update will look like later this year.
Jon Taylor: I mean, Julien, it’s hard to tell you exactly what the outlook is going to — I mean, what we’re going to provide you. I think, we are going to extend the outlook, and we’ll provide the normal detail that we typically provide when we extend the outlook. But I would just ask that we just kind of wait to see — wait until that time, and then we can provide you all the detail.
Operator: Thank you. Our next question comes from the line of Sophie Karp with KeyBanc Capital Markets. Please proceed with your question.
Sophie Karp: All of my questions have been answered, but maybe I can ask you a high-level question here. So your stated rate base growth and your EPS growth targets are consistent with what your peers — some of your peers also forecast in much higher growing jurisdictions, right? And so Ohio, Pennsylvania, jurisdictions where you guys operate are not really characterized by higher population growth. And so with that in mind, how do you feel about build pressure going forward, considering that you will not have that tailwind of growing population and necessarily to help spread the pain, right? So how do you think about that? And what supports that growth on the ground? Maybe you can comment about local economy, something that maybe we are missing.
John Somerhalder: Yes. Sophie, yes, that’s a key point. The good news is in all of our states, we start out very affordable when we compare to our peer rates in those states, were anywhere from single digit up to approaching 30% more affordable in the different states. So it does give us the ability to invest — and as everyone knows, we’ve underinvested in some of our jurisdictions. And so there’s a need to invest for reliability and other things that really benefit the customers. So as you said, even without some of the high customer count, customer usage growth rates of some other jurisdictions because we’re very affordable because we have these needs for reliability and other, we feel like that’s very manageable starting with where we’re starting from on that.
And then, we do see that with electrification first of transportation, we will see, as we move out later in the plan out through the 5- to 10-year period, we do see load growth that can help support additional investments. So, that’s how we view it, and that’s how we view that we can remain affordable and deal with our customers’ affordability issues even with this more robust capital plan.
Sophie Karp: Got it. And then if I may, on Signal Peak, what is — maybe if you can reiterate what is your kind of exit path here? Do you plan to can sell it? Or is it just going to naturally diminish in your earnings profile over time? And if you are planning to sell it, could you just remind us what the book value of it is and if there’s a possibility of impairment and the balance sheet impact?
Jon Taylor: Yes. So I mean, the plan does call for diminishing earnings contribution from Signal Peak. As we’ve talked about before, we have looked at monetizing our investment that has been difficult — but we continue to look for those opportunities, and we’ll continue to do that into the future. And from a balance sheet perspective, I think the investment on the balance sheet is about $60 million, so not significant given the size of our balance sheet.
Operator: Thank you. Our next question comes from the line of Anthony Crowdell with Mizuho Securities. Please proceed with your question.
