NextEra Energy Partners, LP (NYSE:NEP) Q4 2023 Earnings Call Transcript

NextEra Energy Partners, LP (NYSE:NEP) Q4 2023 Earnings Call Transcript January 30, 2024

NextEra Energy Partners, LP isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, and welcome to the NextEra Energy, Inc. and NextEra Energy Partners LP Fourth Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator instructions] After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to, Kristin Rose, Director of Investor Relations. Please go ahead.

Kristin Rose : Thank you, Andrea. Good morning, everyone, and thank you for joining our fourth quarter and full year 2023 combined earnings conference call for NextEra Energy and NextEra Energy Partners. With me this morning are John Ketchum, Chairman, President, and Chief Executive Officer of NextEra Energy; Kirk Crews, Executive Vice President and Chief Financial Officer of NextEra Energy; Rebecca Kujawa, President and Chief Executive Officer of NextEra Energy Resources; and Mark Hickson, Executive Vice President of NextEra Energy, all of whom are also officers of NextEra Energy Partners, as well as Armando Pimentel, President, and Chief Executive Officer of Florida Power & Light Company. John will provide some opening remarks and will then turn the call over to Kirk for a review of our fourth quarter and full year results.

Our executive team will then be available to answer your questions. We will be making forward-looking statements during this call based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect or because of other factors discussed in today’s earnings news release and the comments made during this conference call in the Risk Factors section of the accompanying presentation or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found on our websites, www.nexteraenergy.com and www.nexteraenergypartners.com. We do not undertake any duty to update any forward-looking statements.

Today’s presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today’s presentation for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. With that, I will turn the call over to John.

John Ketchum: Thanks, Kristen, and good morning. NextEra Energy has strong operational and financial performance at both FPL and Energy Resources in 2023. NextEra Energy delivered full year adjusted earnings per share of $3.17, up over 9% from 2022, exceeding the high end of our adjusted EPS expectations range. From solar supply chain challenges to higher inflation and interest rates, NextEra Energy navigated through a challenging environment for the last two years, delivering compound annual adjusted EPS growth of roughly 11.5% since 2021. These were unprecedented events for our sector and clear headwinds for renewables, but disruption often presents opportunity. At NextEra Energy, we relied on our 25 years of renewables experience and our culture of execution to navigate this tough environment.

On the strengths of our scale and competitive advantages, our world-class supply chain capabilities, customer relationships, access to and cost of capital advantages, the strength of our balance sheet, our data driven development playbook, and our team just to a name few we successfully managed through the disruption. Our scale and competitive advantages served as key differentiators and allowed us to continue to deliver for our customers and extend our long track record of earnings and dividend growth. Over the past 10 years, we have delivered compound annual growth and adjusted EPS of roughly 10%, which is the highest among all top 10 power companies. Over that same period, the remaining top 10 power companies have achieved, on average, compound annual growth and adjusted EPS of roughly 2%.

Notwithstanding the strong adjusted EPS results, we recognize and are disappointed by the underperformance in the share price. And as we start 2024, we remain steadfast in our continued focus on execution and creating long-term value for shareholders. We believe that disruption over the last two years has made NextEra Energy an even stronger company. Our business model is more resilient, our development platform is even more advanced, and our supply chain is more diversified than it has ever been. Bottom line, we believe NextEra Energy is well positioned headed into 2024. And there is good reason for optimism at NextEra Energy. Although nobody can predict with certainty what 2024 will bring, inflation and interest rates have declined from their peak, and NextEra Energy has taken steps to mitigate its exposure to interest rate volatility through its interest rate hedging program.

The Commerce Department has provided the final determination around circumvention, providing solar suppliers with more certainty around the rules and expectations of importing solar equipment. New solar supply chains have been established in the U.S. and internationally, leading to lower solar panel prices, and we see the continued longer-term push towards EVs as being incrementally positive for continued reductions in battery prices. Solar panel and battery prices have already declined by roughly 25% from their peak over the last 24 months, heading into 2024. We have proactively procured critical electrical equipment to complete our renewable projects, securing enough transformers and breakers to cover our expected build through 2027. And due to our scale and construction partnerships, we have not experienced any labor shortages impacting project timelines.

Ultimately, all these tailwinds are great for customers, and we believe should drive greater renewables demand in 2024 and beyond, all on the heels of consecutive record years for new renewables originations at Energy Resources in 2022 and 2023, totaling over 17 gigawatts. NextEra Energy offers a unique value proposition with two strong businesses that we believe are strategically positioned with outstanding prospects for future growth. FPL, which represents more than two-thirds of our company, is the nation’s largest electric utility and continues to deliver what we believe is the best customer value proposition and one of the fastest growing states in the US. Energy Resources, the world’s renewables leader, has differentiated itself in an industry in which scale, experience, and being well capitalized matters.

At NextEra Energy, the plan is simple. Our two businesses are deploying capital in renewables and transmission for the benefit of customers, providing visible growth opportunities for shareholders. At FPL, we identify investment opportunities that drive value for customers and support Florida’s growing economy while keeping bills approximately 30% lower than the national average. We focus on running the business efficiently and continue to lead the industry with the lowest nonfuel O&M per megawatt hour of any large utility in the nation. Our emphasis on modernizing FPL’s generation fleet to improve efficiency and reduce fuel costs has saved customers over $15 billion since 2001. We continue this trend in 2023 by placing into service approximately 1, 200 megawatts of cost effective solar and expect to add roughly 4,800 megawatts over the current rate agreement.

And by 2032, we expect to increase FPL’s solar from 5% of our total generation today to roughly 35% by adding over 15,000 incremental megawatts. We are also continuing to invest in FPL’s grid to make it stronger and more resilient for our customers. Almost all of FPL’s transmission system has been hardened with concrete or steel towers or poles, and we continue to invest in undergrounding our distribution system to further enhance reliability and resiliency for customers. The capital plan of the current rate agreement of $32 billion to $34 billion extends our customer value proposition and provides clear visibility for growth through 2025. Beyond 2025, we continue to believe FPL is strategically well positioned as Florida remains one of the fastest growing states in the U.S. with a population growth that is expected to roughly double the national average through 2030.

Florida’s economy is also growing and is now the 14th largest in the world if Florida were a country. FPL is responsible for keeping the lights on for approximately $2 billion per day of Florida’s GDP. These long-term growth prospects, coupled with investment opportunities and renewables and transmission and distribution infrastructure, enhance our best-in-class customer value proposition and support our belief that FPL is the highest quality rate regulatory utility in the country. Energy Resources’ deep expertise in renewables and transmission serves as a key differentiator with customers. As a result of our data-driven development playbook, Energy Resources had a record year of new renewables and storage origination, adding approximately 9,000 megawatts to our backlog.

Driven in part by the roughly 5,600 megawatts placed in service in 2023, Energy Resources grew adjusted earnings almost 13% versus 2022. Energy Resources continues to see strong demand and is well positioned to realize its development expectations over the four-year period ending 2026. Assuming we achieve the midpoint of the range, Energy Resources will be operating a roughly 63 gigawatt renewable portfolio by the end of 2026. That would be larger than the installed renewables capacity of all but nine countries. Energy Resources also is extending its excellent track record of optimizing our existing footprint to create additional shareholder value. To date, we have repowered six gigawatts of our existing 24 gigawatt wind operating fleet, investing roughly 50% to 80% of the cost of a new build and starting a new 10 years of production tax credits, resulting in attractive returns for shareholders.

By 2026, Energy Resources’ wind footprint could be roughly 32 gigawatts, and with over a decade to potentially qualify for repowering, it represents a great opportunity set. We believe there are multiple opportunities to drive value from the existing footprint, multiple wind repowers, adding solar underneath existing wind and locating battery storage with existing wind and solar. And we have dedicated teams leveraging our development playbook to optimize our existing and future fleet. We can maximize existing land, permits, interconnection capacity, and operations to provide enhanced value to customers and shareholders. By 2026, Energy Resources could operate up to 53 gigawatts of generation with the potential to co-locate battery storage, which represents a great long-term opportunity, especially considering the likely future capacity needs of customers.

Throughout 2023, Energy Resources also continue to build what we believe is the nation’s leading competitive transmission business. As growth and renewables occur throughout the U.S., there is a growing imperative to build additional or upgrade existing transmission. 2023 was a record year for our competitive transmission business. NextEra Energy transmission was awarded projects to construct transmission in PJM, CAISO and SPP that would roughly double the investments made in the existing business. We anticipate deploying approximately $1.9 billion of capital through 2027 to complete these transmission projects, which we estimate could enable up to 12 gigawatts of new renewables. Beyond 2026, Energy Resources is strategically positioned to benefit significantly from the irreversible shift towards electrification.

With renewables only comprising roughly 16% of the U.S. generating mix, Energy Resources is just getting started. Renewable penetration is expected to double to over 30% by 2030, and Energy Resources is ready. We have a substantial development pipeline, including roughly 150 gigawatts of interconnection queue positions for new renewables and storage projects. We believe Energy Resources has the most comprehensive renewable energy business in the world and is better positioned than ever to capitalize on long-term growth prospects. FPL and Energy Resources individually have executed well, delivering value for our customers, both businesses complement each other, push one another to be better, and together create scale and foster innovation. We have one of the sectors strongest balance sheets and constructed and placed in the service roughly 6, 800 megawatts of new renewables and storage projects in 2023.

To put that into context, 6, 800 megawatts of installed U.S. renewable generating capacity is enough on its own to rank as the fourth largest U.S. renewable energy company and the 14th largest utility. Turning to NextEra Energy Partners, we continue to focus on executing against the partnership’s transition plans and delivering an LP distribution growth target of 6% through at least 2026. Last September, we made the tough decision to reduce the target distribution growth rate to 6% when NextEra Energy Partners no longer benefited from a competitive cost to capital. With a growth rate now comparable to its peers, we are focused on the partnership’s cost to capital improving, which is critical for its future success. Towards that end, we are evaluating alternatives to address the remaining convertible equity portfolio financings with equity buyout obligations in 2027 and beyond.

We are executing against the transition plans and with the closing of the Texas Pipeline portfolio sale, the partnership has addressed two of the three near-term convertible equity portfolio financings. The STX Midstream convertible equity portfolio financing has been extinguished and we have sufficient proceeds available to complete the NEP Renewables to buyouts that are due in June 2024 and 2025. The third convertible equity portfolio financing associated with the Meade natural gas pipeline assets is expected to be addressed in 2025. Looking ahead to 2024 and beyond, NextEra Energy Partners does not expect the need and acquisition in 2024 to meet the 6% growth and LP distributions per unit target and the partnership does not expect to require growth equity until 2027.

We are executing against the growth plans and have identified approximately 985 megawatts of wind repowers through 2026 making progress against our expectations. As we turn the page on 2023 and head into 2024, we are optimistic about the renewable sector, about our opportunity set, about customer demand, and about NextEra Energy’s future. Demand for renewables has never been stronger, and yet the challenges have never been more complex, making the stakes even higher for customers. Our scale and competitive advantages are enabling us to be the partner of choice with both power and commercial and industrial customers. On March 14th, we will discuss Energy Resources development process in greater detail at our Development Investor event in Juno Beach and illustrate how our proprietary tools differentiate Energy Resources with customers.

And then on June 11th, we will hold our NextEra Energy Investor Day in New York to discuss our long-term plans for both Energy Resources and FPL. Our optimism for NextEra Energy’s future flows from the strength of our two world class businesses, FPL and Energy Resources, that leverage our scale and competitive advantages to differentiate themselves as leaders. Our optimism is driven from our proven playbooks of deploying capital and renewables and transmission to create value for customers. But I am most optimistic because we have spent the last two decades building a world class team at NextEra Energy, and it is, by far, our greatest competitive strength. Our team lives and breathes a culture of continuous improvement working together to solve the tough challenges of the day.

We drive innovation relying on data analytics and automation to make better decisions, and we have developed and deployed smart, low cost, clean energy solutions that lead our industry. Most importantly, our team remains hyper focused on continuing our long track record of execution, serving our customers with excellence and providing long term value for shareholders. With that let me turn it over to Kirk who will review the 2023 results in more detail.

Kirk Crews : Thanks John. Let’s begin with FPL’s detailed results. For the full year 2023 FPL’s adjusted earnings per share increased $0.22 versus 2022. FPL’s adjusted earnings results exclude the approximately $300 million after tax gain on the sale of Florida City Gas which closed on November 30th 2023. The principal driver of the 2023 full year performance was FPL’s regulatory capital employed growth of approximately 12.5%. We continue to expect FPL’s average annual growth and regulatory capital employed to be roughly 9% over the four year term of our current rate agreement, which runs through 2025. For the full year 2023, FPL’s reported ROE for regulatory purposes will be approximately 11.8%. During the full year 2023, we used approximately $227 million of reserve amortization, leaving FPL with a yearend 2023 balance of roughly $1.2 billion.

FPL’s capital expenditures were approximately $2 billion in the fourth quarter, bringing its full year capital investments to a total of roughly $9.4 billion. These capital investments supported the successful commissioning of roughly 1, 200 megawatts of solar in 2023, continued hardening of the grid, and our efforts to underground our distribution system. During the fourth quarter of 2023, our 25 megawatt hydrogen pilot at the Okeechobee Clean Energy Center successfully achieved commercial operations. As a reminder, we plan to utilize this facility together with adjacent solar projects to create green hydrogen and blend it with natural gas at our Okeechobee plant. Key indicators show that the Florida economy remains strong and Florida’s population continues to be one of the fastest growing in the country.

Florida’s economy continues to trend upward, and its GDP is now roughly $1.6 trillion, an increase of 9.3% over last year. For the fourth quarter of 2023, FPL’s retail sales increased 1.6% from the prior year on a weather normalized basis, driven primarily by continued strong customer growth, which increased by nearly 81, 000 from the prior year comparable quarter. For the full year 2023, FPL retail sales increased 0.6% from the prior year on a weather normalized basis, also driven primarily by the strong customer growth in our service territory. Now, let’s turn to Energy Resources, which reported full year adjusted earnings growth of approximately 12.9% year-over-year. Contributions from new investments increased by $0.35 per share due to strong growth in our renewables and storage portfolio.

Contributions from our existing clean energy assets decreased results by $0.11 per share, driven primarily by the impact of weaker wind resource. 2023 was the lowest wind resource on record over the past 30 years. Our customer supply and trading business increased results by $0.16 per share, primarily due to higher margins in our customer facing businesses. Other decreased results by $0.26 per share year-over-year. This decline reflects higher interest costs of $0.22 per share, of which $0.10 was driven by new borrowing costs to support new investments. Energy Resources delivered our best year ever for origination, adding approximately 9, 000 megawatts of new renewables and battery storage projects to our backlog, which includes approximately 2, 060 megawatts since our last call.

Our 2023 origination performance reflects continued strong demand from power customers looking for the least cost alternative to serve load and to replace uneconomic generation and commercial and industrial customers looking to help decarbonize their operation or meet their data center and AI demand. Our renewables backlog now stands at more than 20 gigawatts after taking into account roughly 2, 470 megawatts of new projects placed into service since our third quarter call. We believe our 20 gigawatt backlog provides clear visibility and Energy Resources’ ability to deliver for shareholders through 2026 and beyond. Turning now to the consolidated results for NextEra Energy. For the full year adjusted earnings from our corporate and other segment decreased by $0.08 per share year-over-year, primarily driven by higher interest costs.

We successfully supported the growth in our underlying businesses from our strong operating cash flows, including the sale of tax credits as well as our historical funding sources. In 2023, we grew cash flow from operations well in excess of our adjusted earnings. We transferred approximately $400 million of tax credits, establishing relationships with numerous counterparties. We believe this will prove to be a competitive advantage as buyers look first to NextEra Energy given its size, experience, and the overall quality of its tax credit program. Overall, our funding plans for 2024 through 2026 remain consistent with the information we shared on the third quarter earnings call. We continue to believe NextEra Energy is well positioned to manage the interest rate environment.

While the recent decline in interest rates is encouraging, we remain committed to managing the business to deliver value for customers and shareholders. Overall, we believe we are well positioned with $18.5 billion of interest rate swaps and we will continue to closely monitor the interest rate environment as the clients and rates certainly represent a tail end for our sector and customers. Our long-term financial expectations remain unchanged. We will be disappointed if we are not able to deliver financial results at or near the top end of our adjusted EPS expectation ranges in 2024, 2025, and 2026. For the last 14 consecutive years, NextEra Energy has met or exceeded its financial expectation, which is a record we are proud of. From 2021 to 2026, we continue to expect that our average annual growth and operating cash flow will be at or above our adjusted EPS compound annual growth rate range.

And we also continue to expect to grow our dividends per share at roughly 10% per year through at least 2024 off a 2022 base. As always, our expectations assume our caveats. Now let’s turn to NextEra Energy Partners. In terms of the transition plans, NextEra Energy Partners closed the sale of Texas pipeline portfolio in late December, providing net proceeds of approximately $1.4 billion. NextEra Energy Partners expect to complete the NEP Renewables II buyouts of roughly $190 million and $950 million on their stated minimum buyout dates of June 2024 and 2025, respectively, as the partnerships continue to benefit from the low cash coupon through 2025. In terms of NextEra Energy Partners ‘ growth plan, as a reminder, it involves organic growth, specifically repowerings of approximately 1.3 gigawatt of wind projects through 2026, as well as acquiring assets at attractive yields.

Today, we are announcing plans to repower an additional approximately 245 MW of wind facilities through 2026. The partnership has now announced roughly 985 MW of repowers with strong cash available for distribution yields. While the partnership does not expect to need an acquisition in 2024, the LP distribution growth target of 6% is supported, in part with roughly 175 MW of wind repowers, which are expected to generate attractive cash available for distribution yields. Finally, we were pleased with the high yield note issuance of $750 million, which was completed during the fourth quarter of 2023. This opportunistic refinancing allowed the partnership to pay off its corporate revolver in mid-December. Let me now turn to the financial results for NextEra Energy Partners.

Fourth quarter adjusted EBITDA was $454 million, and cash available for distribution was $86 million. Adjusted EBITDA growth versus the prior year comparable quarter was primarily due to new asset additions and the incentive distribution’s right fee suspension, while cash available for distribution was also impacted by incremental debt service. For the full year 2023, adjusted EBITDA was approximately $1.9 billion, up 13.6% year-over-year, and was primarily driven by the contribution for new projects acquired in late 2022 and during 2023 and the Incentive Distribution Right Fee Suspension. New investments added approximately $228 million and the Incentive Distribution Right Fee Suspension added approximately $113 million of adjusted EBITDA year-over-year.

This growth was partially offset by a decline from existing projects driven primarily by weaker wind resource. Cash available for distribution was $689 million for the full year and primarily driven by contributions from new projects of approximately $42 million and the Incentive Distribution Right Fee Suspension of $113 million while being partially offset by the weaker wind resource. Yesterday, the NextEra Energy Partners Board declared a quarterly distribution of $0.88 per common unit or $3.52 per unit on an annualized basis, which reflects an annualized increase of 6% from its third quarter 2023 distribution per unit. The partnership grew its LP distributions per unit by more than 8% year-over-year. From an updated base of our fourth quarter 2023 distribution per common unit and an annualized rate of $3.52, we continue to see 5% to 8% growth per year in LP distributions per unit with a current target of 6% growth per year as being a reasonable range of expectations through at least 2026.

We continue to expect the partnership payout ratio to be in the mid-90s through 2026. We expect the annualized rate of the fourth quarter 2024 distribution that is payable in February 2025 to be $3.73 per common unit. NextEra Energy Partners is introducing December 31, 2024 run rate expectations for adjusted EBITDA in a range of $1.9 billion to $2.1 billion and cash available for distribution in a range of $730 million to $820 million reflecting calendar year 2025 expectations for the forecasted portfolio at year end 2024. As a reminder, our expectations are subject to our caveat. That concludes our prepared remarks and with that, we will open the line for questions.

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Q&A Session

Operator: [Operator Instructions] And our first question will come from Shahriar Pourreza of Guggenheim Partners.

Shahriar Pourreza : Good morning, guys. Just starting on NEP, if it’s okay, just on the higher repowering opportunities you announced, I guess, how are you sort of thinking about funding it? And really more importantly, is there any specific status on the money pool that could be looking to buy in directly into projects, whether it’s dropdowns or organic growth at the NEP level? Could these sort of equity investors help solve the ‘26 growth and financing issues? And I guess when do you plan to update on that?

Kirk Crews : Sure. So with respect to repowering, Shahr, we look at that as on the project level. There’s really two options there. We can look at it from a project financing standpoint and pair that with transferability, or we can look at it as tax equity. So we will look at both of those options and decide that at the time of the repowerings. With respect to your second question, there’s, we’re looking at all options right now, as John said, in the prepared remarks. We are exploring a number of opportunities and alternatives for addressing the convertible equity portfolio financing that are coming due in 2027 and beyond. There’s really not a timeframe in terms of the update now, but we are looking at all options and with the goal of really maximizing unit holder value.

Shahriar Pourreza : Got it.

John Ketchum: And Shahr, this is John, just adding on to that again, on the repowers. Just like we do at the, I mean, just think about it as tax equity and project finance.

Shahriar Pourreza : Got it. Okay.

John Ketchum: And again, the private capital raises provide us with a number of options, but we’re looking at a lot of different alternatives, that being one of them.

Shahriar Pourreza : Okay, perfect. And then lastly, John, we haven’t had any updates from the FEC, has anything sort of been communicated to you regarding sort of the investigation how quickly you would look to settle, assuming they take up the case. And as we’re kind of thinking about the process, right, it’s confidential. So curious on how you’re going to update investors, like would we see a press release or 8-K from you confirming the FEC process and that you’ll update investors in the future on next steps, or could we see a single communication on the FEC pickup and a concurrent settlement, let’s say? I’m just trying to assess how long this could be an overhang, assuming the case moves forward and whether you’ve already laid the groundwork for all options to get this kind of past this quick when a ruling comes out. Thank you.

John Ketchum: Yes, thanks for the question, Shahr. So let me just take those in order. First of all, there’s no update. We have not been contacted by the FEC. And I think just to remind investors of the timing, first of all, these are just guidelines I’m going to give you. I mean, there is no prescribed timeline in terms of the FEC providing a response to us. But as you may recall, we originally received the FEC complaint, I guess is what you would call it, that had been filed by a group called CREW back in November of 2022. And if you follow the historical precedent of the FEC, it’s usually 12 to 18 months after you first are notified of a complaint having been filed, that you would learn whether or not the FEC decides to find that there’s reason to believe that they ought to conduct an investigation.

We have not heard anything from the FEC in that regard. The second thing I would remind investors of is this is not material. Again, these were five allegations totaling political contributions of roughly $1.3 million to $1.5 million. So we’re talking about smaller dollar amounts and how and when we would update investors would depend on what exactly we hear from the FEC.

Operator: The next question comes from Steve Fleishman of Wolfe Research.

Steve Fleishman: Yes, hi. Good morning. Thanks. I guess a couple of big picture questions. First, obviously a lot more focus in the elections now as we’re in ‘24 and curious your thoughts in the event of Republican trifecta so to speak just how you’re thinking about the sustainability of IRA provisions.

John Ketchum: Sure, Steve. Let me go ahead and take that, this is John. First of all in the 21 years I’ve been at the company, as we’ve changed administrations and we’ve seen changes in Congress, we’ve never seen a change or appeal of tax credits. No matter what form they’ve taken, IRA is the form we’re talking about here. So that’s the first point I would make. Second, it’s really hard to overturn existing law. I think Obamacare is a very good example of that. It’s just very difficult no matter what the political wins are. The third point I would make is that the IRA benefits both sides of the aisle. It certainly is advantageous for obvious reasons for Democrats, but it also has a big benefit to Republicans. Because if you think about where the investments are being made around IRA and where a lot of the benefit of IRA is flowing, it’s flowing to Republican states and it’s flowing to parts of those states that are really difficult to stimulate economically.

And we’re talking about rural communities in these states. And so when we come in and we build a wind project, we build a solar project, we build a battery storage project, it’s a complete turnaround for these communities. We’re providing an economic base in the form of jobs. We’re providing an economic base in the form of spending that occurs in that community. We’re providing an economic base in the form of property taxes and sales tax revenues. These are 180s for these rural communities and make a huge difference on their viability going forward. Just think about hospitals and staffing doctors at county hospitals or teach — paying teacher salaries. I mean, the property tax revenues have significant benefits. And so for those reasons, we’ve always been able to work with both sides of the aisle.

So see any repeal of IRAs being unlikely.

Steve Fleishman: Okay. And I guess two other big picture questions on the renewable space. And it’s just any kind of new thoughts color on your data center strategy and also your thoughts on hydrogen after the based on the proposed rules that came out.