Dan Tucker: We’ll do our best to assess where we are. There may be some degree of uncertainty, but I think we’ll be able to reflect a good bit of it.
Chris Womack: Yes. And the scheduling order has not been established but we expect a similar process to the traditional integrated resource planning process. And so that would align with a decision sometime in the April time frame of ’24.
Operator: Our next question is coming from the line of Jeremy Tonet with JPMorgan. Please go ahead.
Jeremy Tonet: For those of us out of state, I was just hoping you could provide some in-state perspective with regards to Georgia and elections and the latest and what’s happening there with regards to litigation and potential for these elections. What are the next steps forward here? When could these materialize? Just any thoughts on that and any implications that could mean for Southern down the road?
Chris Womack: Yes. There’s a lot of activity around redistricting and lines from congressional seats. But in terms of the issue in Georgia regarding the Public Service Commission, the Rose case, that matter is still pending before the 11th Circuit quarter appeals. And there has not been a decision there. So the other matters that may go before the Georgia legislature you for redistricting. Those processes does not include matters consumed in the Rose case. So we are still waiting for a decision from the 11th Circuit on that matter.
Jeremy Tonet: Got it. I mean would you expect those two elections to be held in ’24 or just can’t really tell too much at this point.
Chris Womack: I think you answered your question. We can’t really tell us this time.
Jeremy Tonet: Fair enough. Fair enough. And then switching gears here, natural gas clearly a key component to the energy mix, as you talked about earlier. Just wondering, it’s not as easy to build a natural gas pipeline as it was at points in the past to supply into the state. I’m just wondering where nat gas that you see incremental supply coming from? Is this MVP? Is this other sources? Or just how do you see that dynamic at this point?
Chris Womack: A couple of things, I mean there are different lines and different processes that we’re in the middle of in terms of trying to expand pipeline capacity. And so we are working with existing companies; one, expanding on existing infrastructure where possible, but also working to find ways to, in fact, increase pipeline capacity and pipelines themselves all across our territory. So that’s all I can speak about that at this time. Yes, we know there are challenges there, but we think it is essential and important to support us being able to serve our customers with the reliability they demand and they need. And so, we are continuing to pursue various host of alternatives and options to make sure we have the supply that we need.
Jeremy Tonet: Got it. Fair enough. And one last one, if I could. Just be it related to Vogtle or otherwise, just wondering how could green hydrogen play into the IRP and your view? Any plans to test that out as a power plant fuel?
Chris Womack: And we have. I mean we’ve done one of the largest blends, and we’re looking at other opportunities. As you know, we participated in the hydrogen hub in the Midwest. We were not successful with the hydrogen hub that we participated in here in the Southeast, but we continue to have conversations and discussions with number of customers. And I think we’re all interested in finding ways to get the price of hydrogen down and thus also create the infrastructure to move hydrogen around. So yes, I mean, we’re still all arrows in the quiver, we’re looking at every option for renewable resources to meet the needs of our customers and hydrogen is a big consideration for us.
Operator: Our next question is coming from the line of Angie Storozynski with Seaport. Please go ahead.
Angie Storozynski: So just two things. One, a small one, Southern Power, I mean, I was kind of surprised to see the announcement about the solar project acquisitions. You have struggled to find any projects that actually makes sense from an economic perspective. Now we’re in a meaningfully high interest rate environment and now you’re going after these projects. So I’m just wondering if there’s something specific about these two projects? Or is it just that you are managing your FFO using some of the solar benefit and on the back of the IRA?
Dan Tucker: Yes. Great question, Angie, because it had been a while since we’ve done anything at Southern Power and really what changed was the IRA. So, we had stopped doing solar projects kind of middle of the last decade. We did a lot through 2015 through 2016 and then didn’t do any sense because we didn’t like the profile of investment tax credits for solar projects. The PTC is something that matches much better our regular, predictable, sustainable earnings profile and that the IRA kind of unlocked a lot of development activity on the solar front. And so the opportunity set was really big, and we narrowed it down to a couple of projects here recently that fit the kind of criteria we look for. Look, again, just to reiterate for everyone what we do at Southern Power, it’s long-term contracts, it’s creditworthy counterparties.
It’s returns that are better overall from an equity perspective than our regulated business, and it fits our overall profile. Southern Power is balance sheet financed, right? In of itself is a BBB+ company, and it’s an important. If you think about the bulk of Southern Power, the rest of it, the natural gas fleet you think about what’s happening with capacity needs in the Southeast, that business has become something of a crown jewel in the Southeast because it is one of the best providers of reliable, dispatchable capacity in the Southeast. So it’s a business that’s important to us, and these were two great opportunities to grow it.
Angie Storozynski: But again, it’s not again, when I think about Vogtle and the improvement in cash flow on the back of the COD of those units, you should be probably the very last or one of the very last utilities that needs to manage FFO using those PACS credits. So this is not…
Dan Tucker: This is not a credit play, Angie, that 0%.
Angie Storozynski: Okay. And then secondly, a different note. I saw that there was another management change of Alabama Power yesterday. Again, if I’m not mistaken, that’s the third one this year. Just caught my attention, if there is again, if it’s just the coincidence that we’ve had these three management changes at Alabama Power? Or is there something more to it?
Chris Womack: No, Angie, I wouldn’t read anything more than that. I mean you’ve had a number of individual leadership there who have put 40 years of service in that have chosen to retire, and then the opportunity to bring in and bring in some new talent. I think that helps the overall team. But as you know, we pay a lot of attention to succession planning. And we do a lot of work internally in terms of growing our teams. But I think we’re also wise enough to know when we can also go invest in some talent from the outside to bring in to our team and makes our overall team better. So I wouldn’t read anything more to it than just the reality of a couple of individuals deciding to retire and us moving some people around.
