Fortis Inc. (NYSE:FTS) Q3 2023 Earnings Call Transcript

Dariusz Lozny: Just wanted to ask one on Arizona, obviously, without wanting to front-run the IRP announcement that’s coming next week. I just wanted to ask about the prospects for getting concurrent recovery in some form. Obviously, there was a robust stakeholder process this time around, certainly some interest there, but it didn’t seem like — it still seems like there’s some opposition there. So curious what learnings you can talk about or maybe perhaps adjusting your strategy on a go-forward basis as you pursue that concurrent recovery. And a related topic, perhaps just how that manifests in your planning for owned generation on a go-forward basis versus PPAs?

David Hutchens: Thanks, Dariusz. And there’s a couple of data points. The first one is the TEP rate case, where we asked for the resource transition mechanism, which is what we called it and got morphed into something called the system reliability benefits adjuster, which is meant to recover some of these investments between rate cases and get a more concurrent recovery and obviously reduce regulatory lag. We did not get that in the TEP case. Now we’re in the process and asked for the exact same thing and the same name now in the UNS Electric, the smaller electric utility that we have done in Arizona. And so far, we have got support from staff and others for that. Now that just came out of the hearing process and we’re waiting on a recommended opinion in order that we would expect towards the end of this year with rates maybe in Q1 of next year.

So that will be kind of that next indication of whether or not there’s some way for us to look at getting this. If we don’t, then there’s always the opportunity of looking at a more generic docket to have these conversations and try again in the next rate case. It isn’t nearly as urgent for TEP, obviously, with the investment tax credits and production tax credits that provide some benefits between rate cases as well and do serve to reduce some of that regulatory lag. That helps for sure. And of course, we can always ask in the next rate case and see how take the temperature of the commission and other utilities are asking for these same kind of mechanisms as well. And sooner or later, I think we’ll get something like this, is just defining those parameters and seeing how that will work going forward.

Operator: And there are no further questions at this time. I would like to turn it back to Ms. Amaimo.

Stephanie Amaimo: Thank you, Ludy. We have nothing further at this time. Thank you, everyone, for participating in our third quarter 2023 results conference call. Please contact Investor Relations should you need anything further. Thank you for your time, and have a great day.

Operator: Thank you, Ms. Amaimo, and this concludes today’s conference call. Thank you for participating. You may now disconnect.