Those are the kind of mitigations and flexibility items that aren’t necessarily available every year. You have to maintain the system, you’ve got to make sure you’re prioritizing service to customers. And so that flexibility is limited. We’re using it this year and that will diminish what we have the opportunity to do going forward. But also, I think what’s not factored in is a couple of other important nuances. We thought 40 slides was enough, but maybe we needed one more slide to kind of draw how we always think about our guidance range and our growth range. We don’t think about the 5% to 7% being off of the midpoint. We’ve always kind of drawn those trajectories off the top of it and off the bottom of it. So 7% off the top, 5% off the bottom.
I think if you do that from this current range, it captures every reasonable estimate that’s out there for 2025 and 2026. When it comes to the rate base growth, look, we were at 6% last year. We just added $5 billion of capital to the plan. We didn’t add all the capital that we see as possible. That kind of incremental capital additions opportunity still exists. So yeah, our ability to grow rate base, and yeah, it’s mitigated ever so slightly by a fraction of a percent of increased shares over time. Our ability to hit our numbers is as solid as it’s ever been.
Shar Pourreza: Got it. Okay. That’s helpful, Dan. And then just lastly, I know one of your peers has spoken pretty extensively on sort of nuclear PTCs, and obviously expects to receive hundreds of millions of dollars a year to fund sort of that capital plan. I guess, does the plan today — do you expect to receive anything material on the nuclear PTC fund? Is it part of any of your credit metrics or funding plans? Thanks,
Dan Tucker: Yeah. We — yes, thanks, Shahriar. We have not factored any cash flow from nuclear PTCs into our outlook. We’ve got a terrific plan with an improving FFO to debt metric that’s several hundred basis points above any of our threshold over time, and frankly improves every year in the forecast that I look at without those nuclear PTCs. Is there the opportunity for us to capture some of those PTCs? We think there very well could be. We’re not counting on it. And to the extent we do, we’ll flow those to customers to the most practical amount of time possible. And so we’re — it’s not going to be a factor in kind of how our metrics or earnings look.
Shar Pourreza: Terrific. Thank you, guys. Super helpful, Dan, really thank you.
Dan Tucker: Yeah. You bet.
Chris Womack: Thanks Shar.
Operator: Thank you. Our next question is from the line of Steve Fleishman with Wolfe Research. Please go ahead. Your line is open now.
Chris Womack: Good afternoon, Steve.
Steve Fleishman: Yeah. Hi. Good afternoon. Hey, Chris, Dan. So just — I think you’ve talked about targeting a 17% FFO to debt, which is differentiated. When do you expect you’ll be there, let’s say, in 2025, when you have first full year of bulk units running? When do you expect to be there?
Dan Tucker: Yeah. So I’ve always kind of said we see a forecast that gets us to 17-ish, it’s the way I’ve characterized it in the past. So let me tell you where we are, Steve, here today, and I think it’s still differentiated and a terrific story and we’re doing everything we can to make sure we’re being conservative in the way we think about this. So if we just think about Moody’s metrics, our actual result for 2023 was 14%. Keep in mind, that’s before Vogtle 4 is in service. 2024, with Vogtle in service on the timeline, we believe those metrics will improve by more than 100 basis points in 2024. The weight of the incremental capital that we’re deploying and the fact that some of this is kind of long live construction, you think about building new gas plants at Georgia or other things, there’s a bit of regulatory lag that weighs a little bit on credit metrics.
And as that resolves itself, cash flow improves. So with the forecast that I see go from 14 to over 15 in 2024, and about a 50 to 60 basis point improvement every year after that over time and that’s a function of that capital, it’s — we’re issuing the equity to continue the improvement. And then there’s a little bit of impact in the short-term for under-recovered fuel that as that gets collected and the debt goes away, that also adds to that upward trajectory. So in my five-year forecast, we get kind of in that mid-16 towards 17 range. But again, every year in the five years is an improving story, and still hundreds of basis points above our thresholds.
Steve Fleishman: Great. Thanks. And my other question, just the — I mean the — can you just talk to this growth, particularly, I guess, in Georgia, the 9% a year sales growth, which is at least seems unprecedented, at least for my — go ahead, Chris.
Chris Womack: No, go ahead, go ahead. Finish your question.
Steve Fleishman: I guess, just how are you differentiating proposed growth projects between ones that are in your plan or ones that you’re holding back from because you’re not sure they’re going to happen? And just — is this a conservative risk-adjusted number, or how should I think about that? How are you doing it against your peers because it’s so huge?
Chris Womack: Yes, it is an unprecedented growth that we continue to witness from economic development activities. And so yeah, this is a very conservative look. I mean, we look for — we factor in build permits, building permits in terms of actual announcements of ground has been broken. I mean, so we look at not just companies that are forward looking and making site visits, but there’s been some demonstrated commitment that they will, in fact, be building a project in the state. So we go through those thresholds before, we make those filings in terms of being — having some certainty that these projects are, in fact, real. We’ve just seen unprecedented economic development activity, say, for the past three years. And we continue to have an aggressive pipeline.
But as we go to the commission for this updated IRP, we just factored in those companies, those businesses that has clearly demonstrated and taken actions that we think of – that shows some firmness in their participation, in their operating businesses in the state.
Dan Tucker: Yeah. And I’ll just add to that, that the momentum in the economic development activity has continued even since filing that 2023 IRP update. And so thank goodness, we’ve got a filing in 2025, and we do this periodically. It’s going to continue to evolve. There’s a lot still lingering out there that — in our conservative nature, we’re not counting on yet, but it’s not unlikely.
Chris Womack: Yeah. But Steve, this is a very conservative look as we make these decisions.
Steve Fleishman: And then just one last thing on this. The 9% since everybody is very focused on data center growth, how much of it is data centers relative to manufacturing or other growth, yeah?
Chris Womack: Data centers represent right now, we think somewhere around 80% of that emerging load.
Steve Fleishman: Okay. Thank you.
Chris Womack: Thanks Steve. Have a good day.
Operator: Thank you. Our next question is from the line of Carly Davenport with Goldman Sachs. Please go ahead. Your line is open now.
Carly Davenport: Hey good afternoon and thanks for taking the questions. Hey how are you? Thank you. Maybe just to start on the new five-year plan. Could you just talk a little bit about what drove the assumptions you made around including some of that spend on the incremental resource needs in the Georgia IRP? And then with the commission order sort of expected there in April, how would you think about updating the capital plan if it’s necessary after that decision?
Dan Tucker: Yes, Carly, it’s a great question. So — and I think I alluded to this a few minutes ago, it really is about the velocity and magnitude of this growth that we just kind of characterized for Steve. It’s right in front of us. These resources are needed sooner than later. And so we think there’s — it was reasonable to kind of break trend for us a little bit and get slightly ahead of regulatory outcome to reflect directionally what’s happening. And so just to kind of peel the curtain back a little bit, we were very specific in what we included. If you go back and look at the proposal that Georgia Power put in front of the commission back in the fall, it included a lot of various owned resources. And what we’ve included in the capital plan is essentially the new combustion turbines, there’s three of those, and then two specific storage projects that are kind of located near military bases in — Air Force base.
That leaves hundreds, I think, over 800 megawatts of storage projects and a small storage or solar kind of not included in there. We will get a decision in April, but again, as a reminder, there’s a whole another process coming in 2025. So, there may be a degree of clarity in April. There may be further clarity coming out the 2025 process. And as those play out, we’ll continue to obviously keep the investment community apprised and update our projections accordingly.
Carly Davenport: Great. Thank you for that. That’s super helpful. And then maybe just as we think about executing on Vogtle Unit 4. Just any insights on kind of the near-term milestones that we might get updates on that we can gauge project progress there? And then to the extent that timeline does slip beyond kind of the April that’s embedded into current guidance, can you talk a little bit about some of the levers that you might have to pull there to sort of offset those impacts?
Chris Womack: Yes. Carly, let me start by saying with initial criticality achieved yesterday, we continue to progress through testing and start-up. The next major milestone is thinking to the grid, and that could occur later this month. We expect Unit 4 completion during the second quarter. And as we take in account the experiences we got from last year with our Unit 3, as we look at moving through Unit 4, and we could have worked through these units — how we work through these issues that could arise. But we view this as a long-term investment and we’ll make sure we’re taking time to get it right. But right now, as we look at where we are, we are planning on the Unit being online in April, and we think we have a number of weeks of margin to accomplish that objective.
Dan Tucker: Yes. And Carly, I’ll speak to the flexibility. I mean, obviously, I mentioned earlier, we’re kind of already deploying some of that flexibility to address what we expect to be us here today in April in service because beyond that, we’ve laid out, it’s roughly $0.03 for every month, but that’s partially why we have a range, right? I mean it’s a $0.10 range out there. So, it could be a function of moving us within the range for the year or depending on the circumstances as the year plays out, whether it’s weather or something else, we might have some greater degree of flexibility. It’s just too early in the year to really be that detailed about exactly how that might play out.
Carly Davenport: All right. Appreciate all that color. Thank you, both.
Chris Womack: You bet, Carly.
Operator: Thank you. Our next question is from the line of Julien Dumoulin-Smith with Bank of America. Please go ahead. Your line is open now.
Chris Womack: Hi, Julien.
Julien Dumoulin-Smith: Hey, good afternoon. Hey, pleasure, guys. Thanks so much for the time. Appreciate it. A couple of quick questions, following up on what you guys have said of late. Just on this big number on sales growth. Just to clarify, I mean, in your forecast, I know you’ve got this pending IRP that technically lines up against that sales. Are you seeing an improving ROE in the outlook? Or is this really underpinned at this point by just the IRP and the extent to which the IRP doesn’t fully reflect that sales outlook? Is there something more to go as you work through the process? Question one, if you will.
