The Southern Company (NYSE:SO) Q1 2023 Earnings Call Transcript

The Southern Company (NYSE:SO) Q1 2023 Earnings Call Transcript April 27, 2023

The Southern Company beats earnings expectations. Reported EPS is $0.79, expectations were $0.71.

Operator: Good afternoon. My name is Kathy, and I will be your conference operator today. At this time, I would like to welcome everyone to The Southern Company First Quarter 2023 Earnings Call. As a reminder, this conference is being recorded, Thursday, April 27, 2023. I would now like to turn the conference over to Mr. Scott Gammill, Vice President, Investor Relations and Treasurer. Please go ahead, sir.

Scott Gammill : Thank you, Kathy. Good afternoon, and welcome to Southern Company’s First Quarter 2023 Earnings Call. Joining me today are Chris Womack, President of Southern Company; and Dan Tucker, Chief Financial Officer. Let me remind you, we’ll be making forward-looking statements today in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements. including those discussed in our Form 10-K, Form 10-Q and subsequent filings. In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information we released this morning as well as the slides for this conference call, which are both available on our Investor Relations website at investor.southerncompany.com. At this time, I’ll turn the call over to Chris Womack.

Christopher Womack : Thank you, Scott, and good afternoon, and thank you for joining us. I am delighted to be joining you today on my first earnings call as President of Southern Company. I’ve enjoyed given the opportunity to interact with many of you over the last couple of months and look forward to meeting with many more of you in the months ahead. I am incredibly excited about the future of Southern Company, the energy industry and the valuable work that we’re doing to serve our customers and communities. I am excited about the opportunities ahead of us and proud to be a part of a team that is making such a significant impact in building the future of energy. As you’ve watched us reposition our deep talented bench across the system, our mission remains unchanged, provide our customers and communities with clean, safe, reliable and affordable energy, while continuing to keep our customers at the center of everything we do.

Also unchanged is our goal to deliver superior risk-adjusted total shareholder return. And I believe our financial plan supports that objective. The strength of our value proposition is a function of our customer and community, focused business model, the robust economic growth in our service territories and the constructive regulatory frameworks in our states. It is also a function of our discipline as we remain committed to our objectives of strong investment-grade credit ratings with a regular, predictable and sustainable dividend policy. Along with our focus on long-term execution and value accretion, we are executing on our plans as we — and believe we’re well positioned to achieve our financial objectives for 2023. Dan, I’ll now turn the call over to you for our financial update.

Daniel Tucker : Thanks, Chris, and good afternoon, everyone. For the first quarter of 2023, our adjusted EPS was $0.79 per share, $0.18 lower than the first quarter of 2022 and $0.09 above our estimate. The major driver for the variance to last year was milder-than-normal weather as the first quarter of 2023 was the warmest on record in the Southeast. Higher depreciation and amortization and interest expense also impacted earnings for the first quarter compared to last year and were somewhat offset by constructive state regulatory actions. A complete reconciliation of our year-over-year earnings is included in the materials we released this morning. When looking at adjusted EPS impact compared to our estimate for the quarter, the main drivers were a strong start for our state regulated natural gas utilities and continued strong electric and gas customer growth.

Given the mid-February timing of our last earnings call, we were able to factor milder than normal January and February weather into our estimate for the quarter, so weather was not a major driver of our performance versus our estimate. You may recall that our adjusted earnings in the first half of 2022 were significantly better than projected due to weather and other market-driven factors. Our early 2022 outperformance supported our full year adjusted EPS performance and enabled us to accelerate maintenance activities in several areas of the business. Those initiatives had us well positioned with additional spending flexibility entering 2023, such that we expect the significant weather impact we experienced in January and February should be manageable over the remainder of the year, assuming a return to more normal weather throughout the balance of the year.

Turning now to retail sales in the economy. In the first quarter, weather-normal electric retail sales were 0.4% higher than the first quarter of 2022. This increase reflects stronger residential and commercial sales from continued robust net in migration to our service territories, a strong labor market and a return to more normal business trends. Industrial sales for the quarter were down 1.6% as we are beginning to see weakness in housing-related sectors, such as stone clay and glass, lumber and textiles due to inflationary pressures and higher interest rates. Half of the industrial variance for the quarter compared to last year can be attributed to the closure of a caustic soda manufacturing facility in Alabama. Excluding the impact of this single customer, industrial sales were down approximately 0.8%.

In a trend that continues to differentiate our Southeast service territories from many other areas of the country, we once again saw record levels of economic development activity with job creation and capital investment announcements at all-time highs in the first quarter. We are beginning to see supplier announcements related to the Rivian and Hyundai electric vehicle manufacturing facilities in Georgia, with 6 supplier announcements made during the quarter, totaling over 4,200 jobs and nearly $2 billion in capital investment. We expect additional automotive supplier announcements in the coming months. Beyond the automotive industry, QCells recently announced a new $2 billion solar panel and component manufacturing facility in Georgia, which is expected to create 2,000 jobs.

Additionally, the Port of Savannah continues to set records, posting its highest national market share ever and second busiest February on record. The port continues to expand capacity, including the recent announcement of the addition of 55 electric cranes, which are expected to eliminate 500,000 gallons of diesel consumption and related emissions per year. Before I turn the call back over to Chris, I’d like to call your attention to our recent dividend increase. At its last meeting, Southern Company Board of Directors approved an $0.08 per share increase in our common dividend, raising our annualized rate to $2.80 per share. This action marks our 22nd consecutive annual increase and for 76 consecutive years, dating all the way back to 1948, Southern Company has paid a dividend that was equal to or greater than the previous year.

This remarkable track record supports Southern Company’s value proposition. And lastly for me, our adjusted EPS estimate for the second quarter is $0.75 per share. Chris, I’ll turn it back over to you.

Christopher Womack : Thank you, Dan. Before taking your questions, I’d like to first provide an update on recent progress on Plant Vogtle Units 3 and 4. Importantly, the projected completion time line and capital cost forecast for both units are unchanged from the updates that we provided last quarter. Since that time, we’ve seen sustained progress consistent with our expectations for each unit. At Unit 3, we’ve achieved initial criticality in March and successfully synced to the grid earlier this month. We continue to work through final startup testing and commissioning and are currently performing testing at the 50% thermal power plateau. This testing is expected to continue in the coming weeks with extensions to higher power plateaus and force trips to test the unit’s safety systems.

Following completion of this final testing sequencing, and consistent with our long-term plans, we expect Unit 3 to enter into a brief maintenance outage window before returning to full power. After the successful completion of all appropriate preoperational and power extension testing, as well as any necessary fine-tuning, Unit 3 will be ready for commercial operations. We continue to project placing Unit 3 in service in May or June of 2023. Turning now to Unit 4. Substantial progress continued throughout the last quarter, with hot functional testing commencing in March, with lessons learned from Unit 3 continuing to benefit our execution on Unit 4, hot functional testing is approximately 80% complete. We have already achieved peak planned output of the test and are currently in the process of cooling the unit back down with progress throughout the test that has been consistent with our plan.

We project to complete hot functional testing in the coming weeks to be followed by planned inspections and surveillance, along with the middle of our final ITAAC’s receipt of the 103(g) finding from the NRC and fuel load later this year. Only 6 systems remain for turnover to testing for Unit 4, and we continue to project an in-service date between late fourth quarter of 2023 and end of the first quarter 2024. We look forward to sharing our exciting progress in the weeks and months ahead as we bring these units online to provide reliable, carbon-free energy to the benefit of our customers in the State of Georgia for decades to come. In closing, I’d like to highlight that Southern Company was named the top utility on Forbes Magazine Best Large Employers in America 2023 rankings.

We ranked nearly 100 places higher than the next industry peer and the top 15 of the 500 large employers ranked for the second consecutive year. Being recognized amongst the best in the nation once again is an honor. This accolade is particularly gratifying because it is directly based on employee feedback. We are committed to creating a workplace where all groups are well represented, included and fairly treated with all — within all levels of the organization and that everyone feels welcome, valued and respected. At Southern Company, we aspire to be a leader in our industry. As such, we will continue to strive to create the best workplace possible for our thousands of team members who work tirelessly each and every day to provide world-class service to the customers that we have the privilege to serve.

Thank you for joining us this afternoon. Operator, we are now ready to take questions.

Q&A Session

Operator: And our first question comes from the line of Steve Fleishman with Wolf Research.

Steve Fleishman : Hey, good afternoon, Chris. Congrats on your first call in a new role. And hi to Tom out there, I’m sure he’s listening. But the — just on — could you just remind us for the prudency filing in Georgia, when that would — when that comes and roughly when that’s going to be scheduled this year?

Christopher Womack : It is scheduled to come as we enter fuel load on Unit 4. Right now, we’re looking to — for unit — for fuel load to occur in the July time frame. So we’re working — we’ll work with the commission and the staff on moving through that process. But it will get started as we enter fuel load on Unit 4.

Steve Fleishman : Okay. And take like — I think most things take 6 months pretty much in Georgia?

Christopher Womack : We expect yes, 6 months. It’s the time frame we expect today.

Steve Fleishman : Okay. And then I think — I know you mentioned the remaining process for Unit 3 start-up, but just the testing so far — I mean, obviously, you kept the time line, but so far in the testing, is it fair to say everything’s gone as planned? Are there any issues that have come up? Just any color there.

Christopher Womack : And Steve, I think as you’ve seen before, things do come up. I would say testing has gone very well. We’ve experienced some trips and the systems operated as they should, but we worked our way through it. And — but we continue to proceed and move ahead. So, so far, so good, but we know there’s — first time start-up, there’s always issues. This is why we test, and we’re focused on the secondary side. But I’d say so far, so good, but we continue to — testing is always a process that we’ll go through to make sure we’re ready for commercial operation.

Operator: And our next question comes from the line of Shar Pourreza with Guggenheim Partners.

Shar Pourreza : Chris, you guys recently just around the ’24 guidance, you kind of lowered it on the back of ongoing inflation and interest rates. I guess how are you seeing things develop now? And do you see kind of opportunities to manage your exposure like we saw with the prior convertible note you issued in February got a bit of a better sales outlook today. I guess what are some of the pushes and takes since you revised that ’23 guide? It seems like there’s some incremental tailwinds here.

Christopher Womack : Shar, you asked is about ’23 or ’24.

Shar Pourreza : ’24.

Christopher Womack : Okay. So I’m going to — let me start, and then I’ll kick it to Dan. We moved the lower end of our band down because as we pushed out I expected start-up of commercial on Unit 4. We moved that. We lowered the range down to . So that was based on the push on the schedule Unit 4. Dan, do you want to comment on any other aspects of guidance?

Daniel Tucker : Yes. And just following on to what Chris said, once we have clarity, which again will be the end of this year, early next year on Unit 4, we’ll narrow that 2024 guidance down to something that’s more akin to what we typically do, around a $0.10 range or so based on the actual in-service date. All the other moving parts you mentioned, Shar, I mean, we kind of are where we were — we are executing in a way to make sure that we’re managing where we need to. We’ll continue to be creative and thoughtful around how we’re financing, particularly at the parent company. I think the convertible deal was a tremendous success. We’ll see what other opportunities we have, not necessarily that specific instrument, but just to be opportunistic in the way we do that.

And then from a cost perspective, everyone is seeing pressures, and we are no different. But we’ve got a lot of efforts underway to make sure that we’re running the business as efficiently as we can in a way that continues to support that guidance range.

Shar Pourreza : Got it. And then just, Chris, I’m kind of curious maybe just your overall thoughts on the cost side because Southern doesn’t really have a stated cost-cutting target like some of your peers despite obviously you guys managing O&M fairly well. I guess, looking at things kind of from a fresh lens, are you seeing opportunities to cut cost incremental to your current plan maybe at the holdco level like shared services or even at the opcos? I mean, I guess, is there any opportunities you see as a new CEO that could be additive to plan as we’re thinking about maybe further streamlining the business?

Christopher Womack : Yes. And Shar, I would say it’s a wonderful question I’d build on what Dan has said. I mean, we will continue to look at how we can run this business more efficiently. I mean there are opportunities to create shared service opportunity to find efficiencies in places, we will do that. As you know, there’s a lot of conversation and interest in, and we take it very soon to the issue of affordability. And so we will continue to find ways to put downward pressure on our pricing, find ways to look at the interest rate and inflation implications, but look to find ways to make sure, from O&M perspective, that is either flat or declining over our forecast period. So we will continue to do that and pursue those kind of opportunities. And we’ve done it in the past, and we’ll continue to do it in the future.

Daniel Tucker : And I’d say, in addition to the — particularly the shared service opportunities, as Chris mentioned, 1 of the other great opportunities we have, which you’d hope we would have is to really optimize how our internal resources are deployed between operating expenses and capital investments. So we’re certainly doing everything we can to optimize the way they’re deployed to focus on our capital spend and reduce costs at the same time.

Operator: And our next question comes from the line of Ross Fowler with UBS.

Ross Fowler : So Dan, I just want to go through the seasonality again, you kind of brought it up in your prepared remarks, but I just want to make sure I fully understand your drivers there. You hear about — you had a little over $2 in the first half of ’22, and you’ve got a little over $1.50 in the first half of ’23. So if I heard you correctly, you said that, that outperformance in ’22 allowed you to pull a lot of O&M forward into the year, so that’s part of it. But there’s other pieces here, too, I think 1 would be a reduction in part of the Vogtle penalty once Unit 3 goes in. And then I think there was some sharing outside the band in Q4 of last year. So other than those 3 pieces, is there anything I’m missing around sort of getting back into the guidance range with a better second half number this year versus last?

Daniel Tucker : Yes, not in terms of getting back, but just in terms of making those comparisons year-over-year, Ross, I think the other important moving part that we saw in the first half of last year that really helped us get up to that strong start was earnings that were really driven by where energy prices were. So not only on our regulated side, we had some commercial industrial pricing that benefited from that, but also on the Southern Power side got off to a great start just because of where market energy prices where and it allowed us to do a lot of those things. So when you’re doing a year-over-year comparison, that will be a difference. Big thing that you brought up that’s just not as obvious always looking at this is the kind of rebates or refunds back to customers’ notion.

That was a significant element of the second half of last year if you combine all of our jurisdictions in terms of either what was accrued to refund back to customers or what was put into regulatory reserves, so we have the reliability reserves in some of our jurisdictions. That was $0.33 just in the fourth quarter. And so that’s a pretty significant year-over-year reconciling item that will necessarily be there this year, but we’ll still be able to support that $3.60 as a midpoint.

Ross Fowler : And then on the industrial sales decline, you mentioned about half of that was sort of a one-off item due to the caustic soda facility, and the rest was kind of like seen in lateral housing-related sectors. Maybe ex-housing, what are you seeing for the economic backdrop currently in that context?

Daniel Tucker : Yes. Still, and I want Chris to kind of add on to this. But just from an overall sales perspective, still seeing year-over-year growth in a lot of sectors. There is a bit of slowing going on, but the overall strength here in the Southeast continues to show itself. Chris, do you want to add anything there?

Christopher Womack : Yes. And so we look at the economic development pipeline here in the Southeast, which remains to be robust, I mean I look at first quarter of ’23 versus the first quarter of ’22 and announced projects expect like 10,000 — 10-plus thousand jobs and some $4 billion of investment here in Georgia and in Alabama also sees increases around EV and battery supply chain. And the pipeline continues to be very full. So we continue to be excited about the economic activity, the economic development pipeline from population growth, in migration to the customer growth, we saw somewhere 11,000 on the electric side, some 6,000 on the gas side. So we continue to see very positive factors that — some people say there may be a recession, but we think here in our territory maybe lessen because of this ongoing continuing economic strength and economic activity that we continue to see.

Ross Fowler : That’s great, Chris. And maybe this is an unfair question, but I’m going to pose it anyway. How do you think about — I mean, you’ve seen in the press this week an EPA power plant rule potentially coming around natural gas and emissions reductions. How do you think about that in terms of sustainability achievement versus affordability and reliability because natural gas is definitely needed for both of those things as we walk through the energy transition? What are the risks and opportunities around that type of regulation?

Christopher Womack : Yes. And let me break that up in two parts. I mean I think in terms of the proposal using the process before, and that will go through a number of different iterations. And when there is a final rule, we’ll assess it in understanding and figure out what it means to us. I mean, we have been pursuing our fleet transition, our focus on sustainability and with a real commitment of balancing affordability with sustainability and moving toward to our net zero. I mean — and we’ll continue to do that as we go through this fleet transition. So our path will continue. And so whenever a new rule comes out, we’ll take a look at it. I mean, I would also say I think for the economy, natural gas is very important. Natural gas is important to this country and to the economy to a lot of regions that cannot, from an affordability standpoint, make a transition to all electric.

And so I think, from a national energy policy standpoint, I think it’s important to recognize the importance of natural gas as we go forward. So that would be my response to that question.

Operator: And our next question comes from the line of Julien Dumoulin-Smith with Bank of America.

Julien Dumoulin-Smith : Congrats, again. So with that said, look, I want to pivot back to the credit conversation. As we kind of pivot out of the U3, U4, you look at the time lines getting a little bit narrower here. What are you guys thinking today about the prospects of credit improvement? What kind of metrics would you want to target? Obviously, you’ve seen some gyrations there through the course of construction — how far do you want to go on that improvement side? What does that mean in terms of the targeted broad metrics? Again, I get that the rating agencies have different metrics they target? And then ultimately, what does that translate to in terms of target FFO for you guys? And the time line they’re in, right, as you look at this in service?

Daniel Tucker : Yes, Julien, it’s Dan. So look, with — once Unit 3 and 4 is in service, reflected in rates from a cash flow perspective, and we’ve talked about this before, it’s about a $700 million improvement in our operating cash flow and thus improvement in FFO from an FFO to debt perspective, what that means is given the rest of our business, combined with that improvement, we should be comfortably in a let’s just call it, 7-ish zone from an FFO to debt. It could be as high as 18 in years, could be in the high 16s, but comfortably above certainly current rating thresholds. And what I’ve continued to articulate as an objective to have all of our regulated utilities in the A category and our parent company at BBB+. And I think we can achieve that without having to do anything but execute.

Julien Dumoulin-Smith : Right. But that a further improvement in terms of the underlying metrics per se?

Daniel Tucker : Absolutely.

Julien Dumoulin-Smith : Okay. And then, sorry, if I can pivot 1 more subject here. Just to touch on Georgia and Georgia Power, specifically around solar opportunities. I know that IRA has unlocked certain opportunities. I know that this isn’t in flight in the process of maybe not necessarily right. But prospects for investing on that front. Obviously, you’ve had the Southern Power placeholder, but I’m focused more specifically on solar at Georgia Power and/or any of the other opcos today post IRA. And given the RFP?

Christopher Womack : Yes. And Julien, as you know, we have opportunity as a result of the 2022 integrated resource plan, but also with the, inflation reduction act, we think as a level of the playing fields between — from tax policy, it offers us the opportunity to own renewables ourselves. And so our teams are looking at the opportunities, and we’ll be working with the commissions to pursue those opportunities for us to build and own more renewables as we go forward, taking advantage of the opportunities that the inflation Reduction Act affords us. And the opportunity we have is not just looking at the lease cost, but also — but who’s the best cost owner of these projects going forward. So it’s a wonderful opportunity for us. But also, I think, as you mentioned, there’re also opportunities for Southern Power as we go forward. So there are wonderful opportunities for us as we go forward, and we’re looking forward to fully investigating and executing around them.

Julien Dumoulin-Smith : Got it. But maybe in the next quarter or so, we’ll get a little bit more detail there?

Christopher Womack : We’ll keep you posted.

Operator: And our next question comes from the line of David Arcaro with Morgan Stanley.

David Arcaro : A couple of quick questions on the Vogtle units. I was wondering when would we expect Unit 3 to be running at full capacity? We’ve seen it ramping up and down, getting to 50% power. Wondering when we might see it at full capacity. And then just on that Unit 2, have the — I think you touched on this before, but has the testing and running so far been going smoothly enough to not push out any like incremental delays within the May to June time frame?

Christopher Womack : No. And so David, we’re not announcing any schedule or cost estimate increases. 100% power sometime in May. I mean, we’re working through the process. We’re doing all the testing and we’re ramping up. I would say, look for some time in May to get to 100% power.

David Arcaro : Okay. Got you. And then on Unit 4, just during hot functional, I guess, similar question. Have you seen any issues pop up during that testing phase that would add incremental time even within the 4Q to 1Q 2024 window?

Christopher Womack : And I think as we said, we’re about 80% complete on hot functional on Unit 4. And I think it is clear that we have taken lessons learned from our Unit 3 experience, and there are no issues to note. And so I’d say, so far, so good. And I mean, if you recall, you may recall, Unit 3 took us about 94 days. And so we’re now 80% complete. And if we stay on schedule, sometime in early May we will conclude hot functional testing and then look toward critical path items of ITAAC’s and testing and looking toward fuel load sometime in July. So, so far, so good. So that’s kind of just — that’s where we are. But we’ve — I mean the lessons learned from Unit 3, Unit 4, I think, are clearly reflecting in showing up as we go through hot functional testing on Unit 4.

Operator: Our next question comes from the line of Durgesh Chopra with Evercore ISI. Q – Durgesh Chopra Just first, Chris, you talked about the maintenance outage at Unit 3. I just want to confirm that’s just standard process, right? That’s not an added step based on…

Christopher Womack : Yes, it’s — go ahead, Durgesh.

Durgesh Chopra : No, that’s it. Please go ahead.

Christopher Womack : Yes. No, you’re right. I mean it’s a standard outage. I mean, there’s some testing equipment that has to be removed and some things that we have learned. And so we’ll fine-tune some things, maybe some remediation that will occur probably about a 10-day maintenance outage. But yes, I mean, it’s standard and what’s expected.

Durgesh Chopra : Perfect. Thank you for clarifying that. And then maybe I can just pivot to the Georgia Power under-recovered fuel filing. I believe you made that in February. Just any initial stakeholder feedback there I know in the last call, we talked about perhaps offsetting some of that balance with lower gas prices going forward as we see it. Just anything you can share with us on that front would be great.

Christopher Womack : As you may know, we reached a stipulation with the staff, and we’re looking at about a 12% price increase on retail rates over 3-year period to recover that under-recovered fuel balance, and that would take effect in June. And that is lower than what our initial request was and 30% less than what we expected. And I think as we look at this outcome, this stipulation, it reflects kind of our sensitivity and our interest in paying attention to affordability and recognizing that we must recover this under-recovered fuel balance, but how do we do it in a manner that minimizes the impact on customers. And so that’s kind of where we are. More hearings and consideration to take place, but the rates will take effect starting in June.

Operator: And our next question comes from the line of Sophie Karp with KeyBanc.

Sophie Karp : Most of my questions have been answered actually. Let me just maybe throw this 1 at you guys. With Vogtle moving towards the completion Unit 3 and Unit 4 and remain on track to be completed in the direct line of vision. Would you take some time in the medium term to have another look at the businesses that you own and maybe figure out which ones could be recycled capital wise and optimize the business mix? Or are you quite happy with what you guys right now?

Christopher Womack : I mean, I think you kind of speak to it. But as we have success on Vogtle 3 and 4, it does give us the opportunity to unlock the fuel value of this company and kind of regain our premium valuation. And I mean, we will look at our business, and we’ll look at all parts of it in terms of from a buyer and seller perspective. And the thing about it is, I say, we’ve got — and we will always look our handover. We feel real good about the cards that we have. I mean we’ll always do our homework, and we look at what others have extracted in the marketplace. But we’ll also look and see some things we can do better. We don’t have any equity needs. I mean we’re in a very, very good spot. And so I just think it’s an opportunity for us to really unlock full value and the full potential of this company as we go forward.

Operator: Our next question comes from the line of Angie Storozynski with Seaport.

Agnieszka Storozynski : So I’ll ask a bit for question. So we actually be willing to acquire some assets now that you have seemingly a clean slate. You mentioned you have no equity needs. You have a strongly improving cash flow, and there are assets available for sale. For now, the way we look at you guys, you’ve basically sold for roughly the sector average earnings growth, which I cannot believe that you would be happy with.

Christopher Womack : Angie, I’ll tell you, and I think I said it on the last answer to the last question. We are excited about the progress we’re making through on these Vogtle units. And we’re looking forward to bringing both units online and getting those units completed. Once we do that, I mean, we’re really going to focus on really making sure that we are unlocking the full potential and the full opportunities for this business that we have, and we are large enough to do this as a stand-alone. At the same time, we’re continuing to always look at our — look at the market, look over our hand, as I said, from both a buyer and seller perspective. We’ll always continue to do our homework. But we feel good about where we are. 5 to 7 is good enough for us to be the best risk-adjusted return in the industry, and we feel good about where we are.

Operator: Our next question comes from the line of Ashar Khan with Verition.

Ashar Khan : Congratulations. My questions have been answered. Thank you.

Operator: That will conclude today’s question-and-answer session. Sir, are there any closing remarks?

Christopher Womack : Guys, we thank you for being with us today. and we look forward to speaking with you in the future. But otherwise, operator, thank you very much for the call.

Operator: Thank you, sir. Ladies and gentlemen, this concludes the Southern Company First Quarter 2023 Earnings Call. You may now disconnect. Have a great day.