Paul Fremont: And then I guess my other question has to do with sort of the commercial load growth that you guys experienced. How much of that is data center or AI-driven?
Sean Trauschke: Bryan, do you want to do that one?
Bryan Buckler: Sure, sure. Good morning Paul. On the commercial front, what we’ve seen in the last couple of years is the majority of the load growth has come from kind of cryptocurrency data mining companies. We’re seeing that shift a bit, Paul, to even those companies that have been doing cryptocurrency mining historically are now pivoting their business models prospectively. They’re still going to do some of the data mining, but they’re shifting their business models more to traditional, I guess, you would call it, traditional data center work around generative AI, for example, hosting those types of servers. A lot of our interest — a lot of the interest in our service territory currently for future years is data centers.
But as we’ve spoken to before, we’re seeing broad industries being interested in our service area, whether it’s the defense industry, food and beverage distribution. Western Arkansas is really more of your traditional manufacturing, some of the big names that you’ve been seeing in your whole life. So, it’s an exciting time. But to answer your question directly, we have seen quite a bit of cryptocurrency load growth. That’s about 1.5% of our margins as we sit here today.
Paul Fremont: And then that was sort of the second part of my question was going to be on margins. I mean should we think of margins on the data centers as being more like industrial or sort of traditional commercial type margins?
Bryan Buckler: I would think of them as being some of your very largest loads tariffs, which feel more like some of your industrial groups you’re thinking of, Paul. So, typically, some of the lowest margin customers. And in fact, with some of these, they do improve over time as incentives roll off, but it’s definitely a lot of load for at least initially some pretty low margins.
Paul Fremont: Sort of last question. You talked about sort of two categories. Can you give us like a percentage maybe idea? I mean is it like 80% data centers and 20% of the more sort of traditional? Or just within the commercial category, how much is being driven by sort of data centers and crypto-miners?
Bryan Buckler: Yes. So, I don’t know if we’ve given that percentage, but it is the majority. Think of it may be more like two-thirds, maybe a bit more than that being your cryptocurrency. Again, it’s shifting — it will be shifting more and more to data centers as we move.
Paul Fremont: That’s it from me. Thank you so much.
Bryan Buckler: All right.
Operator: The next question comes from Nicholas Campanella with Barclays. Nicholas, your line is now open.
Nicholas Campanella: Hey, good morning everyone. Thanks for taking my question and for all the information today.
Sean Trauschke: Good morning Nick.
Bryan Buckler: Hey Nick.
Nicholas Campanella: So, I just wanted to follow up on one of Constantine’s questions. And Bryan, I know you brought up in your prepared remarks, you just got your updated outlook from the agencies. Just as you kind of layer in these RFPs to your capital plan as a result of you winning some generation or some type of ownership opportunity, just how do we kind of think about the balance sheet capacity at this point relative to your FFO minimums and the incremental financing needs? Or is this just really — is this capital going to replace other capital in the five-year plan to the extent it materializes?
Sean Trauschke: Yes, Nick, this is Sean. Like I mentioned, we’re probably going to have a decision sometime next year from the commission in terms of approval for those generation items that we would own and then we’ll layer that in there. And I think we’ll see where things stand when we get there, right? I think it’s the best way. I mean if load continues to grow like it is, obviously, you’ve got a little more room in your coverage ratios. We’re protective of the balance sheet. That’s very important to us. But how we fund it and what regulatory compact we arrive at to recover that, those all play into that. So, I think it’s a bit premature not knowing exactly what’s going to come out of the RFPs and what that regulatory compact would look like.
Nicholas Campanella: Okay, I appreciate it. And then I guess just on the storm that you brought up also, just can you just remind us, I believe you have kind of deferrals for storms in place in your territories, but can you remind us there?
Bryan Buckler: Hey Nick, we sure do. There’s a tracking mechanism for storm costs in Oklahoma. So, the first $3 million of cost on an annual period go to expense. And then the remainder on O&M goes into that tracker.
Nicholas Campanella: Okay. Thank you. Have a great day.
Sean Trauschke: See you Nick.
Bryan Buckler: Thank you, Nick.
Operator: [Operator Instructions] The next question comes from Anthony Crowdell at the Mizuho Group. Your line is now open.
Anthony Crowdell: Hey good morning guys. Bryan, congrats on a wonderful three years.
Bryan Buckler: Good morning, Anthony. [Indiscernible].
Anthony Crowdell: I know, I know. You never know. Don’t be so negative. The day is not over yet. Just two housekeeping items. On the financing side, you talked about an issuance at the Holdco and an issuance at the OpCo. Just — has the company — will the company provide any clarity on what the interest rate you’re assuming on those offerings?
Bryan Buckler: Yes, Anthony, it’s a good question. We had assumed kind of in that mid-5 area, for debt issuances. So, at the Holdco, it’s — as you’ve seen in the recent bond deals, it’s probably a tick higher than that. But markets are dynamic. We’ll see how they end up, but we’re in a general area with our expectation sitting here today compared to where they were before, maybe a tick higher under the current market conditions. But I’d say our CP and our short-term debt rates have been kind of spot on. We’ve built some conservatism into the plan and thank goodness we did. We feel like we’re in great shape. And let me just add to that, while interest expense may be a tick higher, we’re seeing, as I mentioned before, some really exceptional load growth. And so we’re right on plan and feel really good about the full year projection.
Anthony Crowdell: Great. And then just on load growth, just a quick question. More on the residential — customer growth, 1.1%, residential load growth, much higher at 3.9%. Just I’m curious what the drivers are for that residential growth number?
