Aditya Gandhi: Good morning. Shawn, just a question for you on the ATM. You mentioned that you’re now expecting higher default taxes. Can you just remind us what assumptions you’re making around your cash taxpayer status in the plan, please?
Shawn Anderson: Yes, great question. Relative to the prior plan, we’ve seen a flip in our taxpayer status from the beginning of 2025 to outside of our current plan horizon. This is driven by a host of assumptions associated with the IRA, but predominantly linked to higher ownership of solar assets. So while there’s a number of assumptions that link to this, the net impact is less cash utilization for tax payments than previously projected, which enables more capital assets across our plan without incremental equity financing.
Aditya Gandhi: Got it. Got it. Thank you for clarifying that. And my second question is sort of more high level. So when you all came out with your 2022 analyst day plan last year, gas prices were much higher. Those have moved lower. Rates have moved higher since but not try higher. And you’ve now added $1billion of more CapEx to your plan. There’s been good regulatory outcomes and execution on the O&M side as well. Just how do you feel about where you’re tracking within your 6% to 8% long-term?
Shawn Anderson: Well, there’s no change to the 6% to 8% long-term, we still believe strongly that an annual 6% to 8% OEPS growth range is feasible with this plan, most notably due to the programmatic nature of the investments themselves, how they flow through the regulatory mechanize and then the line of sight we have through trackers and otherwise to be able to recover those accordingly. This plan refresh does incorporate updated guidance around short and long-term interest rates. So it does flow in what we’re seeing in the current marketplace. And as I mentioned in my prepared remarks, sustaining that longer at the plan horizon than previously. All of that’s refreshed here as we sit here today. Commodity prices as well are effectively flat.
Lloyd Yates: And I think with those commodity prices and that 6% to 8% EPS growth plan we think we also can effectively manage customer affordability in that realm to the point where we can grow for the very long term as opposed to open the capital and increasing customer rates. We believe that there’s a regulatory sensitivity here that we need to manage around customer affordability, and we’re very focused on that.
Aditya Gandhi: Got it. Thank you. That’s all I have. Thanks for taking my questions.
Lloyd Yates: Thank you.
Operator: Our next question comes from the Bank of America. Please go ahead.
Julien Dumoulin-Smith: Hey good morning team. It’s Julien Dumoulin-Smith. Not sure what happened there with our dial-in. But good morning, guys. Thank you very much. Appreciate it. Look, we wanted to follow up on a couple of items here. First, just look, let’s just talk about timing of these various incremental factors here. You talk about these upsides, can we lay out a little bit of the cadence through 2024 and when we could see some of those? I heard you say earlier, IURC on these two incremental projects for conversion to tax credit transferability that’s in the first half of the year. Then as we layer in later in the year, you’ve got a few other pieces, I imagine. As best I understood your comments? And then could we get some updates on the IRP towards the end of the year?
I just want to make sure I understand like how these individual data points filter out to getting visibility of that $2 billion. And then if I can, just a further detail on the FFO translation. To the extent that you do get that $400 million uplift here in spend through the pivot away from tax equity. How do you think about the corresponding FFO to debt impact just on tax transferability given the ability to monetize an FFO? Just to clarify that out a little bit, Shawn.
Lloyd Yates: So let’s take those one at a time. Michael why don’t you start with the IRP and some of the generation opportunities.
Michael Luhrs: Yes. So with the generation opportunities in the IRP and even when we talk about potential upside associated with the plan, as I mentioned before, we’re working through those in a very methodical and disciplined fashion. Later, I already mentioned with Calvary and Dunns Bridge that we expect something from an IURC in the first part of the year. By that point in time, we would expect to have our analysis associated with Fairbanks and Gibson to be complete and ensuring that it’s beneficial to customers. So that’s — in that rough time frame, we wouldn’t be expecting to see an update on that analysis. We are working through the IRP refresh in 2024, the IRP refresh wouldn’t be towards the latter half of the year associated with it.
That will include looking at what we need associated with the pipeline for what’s already been mentioned around batteries, additional storage at other solar facilities, additional generation that may be needed relative to the plan from what we’re seeing in either economic development or low growth in the areas but that would be more towards the latter part of the year.
Lloyd Yates: Okay. Shawn, do you want to talk about the FFO to debt impact?
Shawn Anderson: Yes. I think it’s all incorporated Julien, the 14% to 16% annual guidance rate that we’ve provided around FFO to debt. So the net result of that is associated with higher deferred taxes, lower cash taxes paid and some slight timing around the monetization of these credits. Although we expect the credit to be passed back to customers in full. Therefore, that might be a timing issue more so than it is any one long sustaining benefit to the FFO to debt metric itself. One other change that occurs through the concept of full ownership and the concept of tax equity, we’re able to retain the full tax attributes of a portion of those projects, particularly these two projects that we’re moving forward with discussions with the IURC upon such that we retain all those tax attributes, our prior modeling, as you would have expected, would have had all those tax attributes delivered to a tax equity partner.
So net-net, that provides us additional tax attributes that are beneficial for the plan.
Julien Dumoulin-Smith: Got it. Yes, absolutely. I appreciate it. Well, look. And then PHMSA, just what’s the time line there, just to go back to the kind of the cadence of things very quickly. I mean, I know that you guys see these big financial updates, call it, once a year around this time. I just — is that going to be — you talked about still having some of this resolved, some of it’s still ongoing. That’s a next year this time kind of update as well? Just to clarify that last piece.
Lloyd Yates: Yes, I believe by time, we understand the full impact of the PHMSA rule, we’ll roll that into next year’s financial plan. It is a big role with a lot in terms of — but I think the focus is making the gas distribution system safer, significant reduction in methane leakage and replacing some of the first-generation piping. So I think we’ll understand that better later this year or early next year.
Julien Dumoulin-Smith: Got it. Alright, guys. Thank you very much. Have a great day.
Lloyd Yates: Thank you.
Operator: There are no further questions at this time. I would now like to turn the call over to the NiSource team for closing remarks.
