Dan Tucker: So I’m not sure where you’re headed with improved ROE.
Julien Dumoulin-Smith: Just from improving returns from the additional sales, if you will.
Dan Tucker: Certainly, not improving returns from an overall, say, regulated utility perspective. From a — we really view that as the opportunity to kind of put downward pressure on existing customers’ rates. I mean, our objective from an ROE perspective is regular, predictable, sustainable, I think you’ll continue to see it play out that way. Just to be clear, Julien, on the sales growth that we’ve laid out here, so this is roughly 6% in the long term for Southern that 9% number for Georgia Power, this is actually based on a more conservative view than what’s in the IRP update because the IRP update had to put some degree of expectation for additional success from an economic development perspective so that we do stay ahead of this from a resource perspective. It’s not a huge differential, but what it also kind of reinforces is as this continues to play out, those numbers have the potential to continue to go up.
Julien Dumoulin-Smith: Yeah. Excellent. And then just pivoting back to the FFO to debt quickly, I mean, the 17% that you guys were talking about once, I mean, what is — has that changed at all? Just in terms of how you’re thinking about pro forma Vogtle 4 coming on?
Dan Tucker: No, nothing’s changed in terms of what I believe the financial profile supports which, again, my objectives, I’ve said this before, I think our parent company being a BBB+, kind of the A category for all the utilities, I think the profile we see ahead of us fully supports that. The only thing that’s changed is a slightly slower ramp-up in those metrics because of the incremental capital that we’re deploying. But in terms of where we stand relative to any of our thresholds, it’s several hundred basis points above any of those in every year, and every year improves.
Julien Dumoulin-Smith: Wonderful. And then just quickly on the reactor cooler pumps, I know there was a little bit of talk in the K here. What’s sort of the status on V4? And then just to the extent to which that there is some root cause impact on some of the other — there’s a need to evaluate the adjacent reactor cooler pumps, if you will. I know there’s some language in the K on this.
Chris Womack: Yes. And so yes, we’ve done all the analysis, we sent the pump back to the manufacturer. And we think we identified the cause of the issue, but a root cause analysis has not been performed yet. But we have tested all the other pumps. And with the new pump, we made sure there were not any similar issues, but we think we’re in pretty good shape with the pumps as we go forward.
Julien Dumoulin-Smith: Got it. Okay. So stay tuned on that front. Thank you guys very much. I really appreciate it.
Chris Womack: Thank you.
Operator: Thank you. Our next question is from the line of Nick Campanella with Barclays. Please go ahead. Your line is now open.
Chris Womack: Hi, Nick.
Nick Campanella: Hey, good morning or good afternoon. I am sorry.
Chris Womack: Good afternoon.
Nick Campanella: I guess just a follow-up on the question that Julien had on the root cause. I think you just mentioned the possibility of having to go look back at Unit 3 pumps in the Vogtle. And just what’s the actual risk – line? And when is that no longer going to be an issue?
Chris Womack: I guess, as we have looked at the pump that we sent to the manufacturers, as we identified what we thought the issue was, we think it’s not an issue with the other pumps. I mean, we test the other pumps. We assess the pump, the new pump that we installed. And we think we just have a good handle. And on these pumps, I think you consider the run time. I think that provides good color to kind of, I guess, the confidence we have in the pump and what we’ve identified as the issues and things we have to do to make sure we don’t have similar issues as we go forward.
Dan Tucker: Yes. I think globally, there’s 24 of these things running like a champ right now.
Nick Campanella: Absolutely. Yes, that’s helpful. And then just on the capital plan, and reflecting roughly 60% of the IRP, I know that you kind of get a decision in the first half of this year. So just how do we kind of think about tweaks to the financing plan? Is it just going to be another fourth quarter update this time next year? Or is there a mid-period opportunity in the cards?
Dan Tucker: Look, none of these regulatory outcomes will be — they’ll all be in the light of day. I think it will be clear what’s approved and what’s yet to be approved. I kind of laid out what we’ve included already, which is those combustion turbines and two very specific storage projects. And so I think we’ll be able to provide color along the way. We’ll certainly do more formal updates every year as we normally do, but I think there’ll be interim opportunities. And the other interim opportunity that will continue to exist is we’ve remained extremely conservative when it comes to owning in renewables in any of our electric service territories. We also are very optimistic that, that will happen. And as that gets clarity, we’ll make sure that, that’s known as well.
Chris Womack: But you’ll also see great transparency through this process, man, as the commission and Georgia works through the process, many staff is filing testimony today, and they may have a different perspective. But you’ll see that process play out and that leads us to the decision in April by the commission. But you’ve seen these IRP processes before. So those processes will continue as we go forward, and you’ll see real time kind of how it unfolds.
Nick Campanella: All right. Thanks so much.
Operator: Thank you. Our next question is from the line of David Arcaro with Morgan Stanley. Please go ahead. Your line is open now.
Chris Womack: Hey, David.
David Arcaro: Thanks so much. Hey, thank you. Let’s see. Thinking about that load growth trajectory, is 6% rate base growth still the right kind of parameter to think about longer term? 6% load growth, 6% rate base growth, is that enough to kind of handle the system strain, the generation need to strain on the T&D system over time? Or is there potential upward growth rate pressure on that rate base growth number as you get into later years of this decade?
Dan Tucker: Yes. Look, I think, Dave, what we’ve tried to imply is there certainly is upward potential here. We’ve remained incredibly conservative and measured in how we forecasted. We’re not trying to get too far ahead of any regulatory processes. We’ll get these decisions in April. We’ll have a 2025 process. We believe there’s more economic development activity that is likely to come to fruition. And so given all of that, it is certainly not unreasonable that our capital budget will continue to rise to serve that incremental load. And so there certainly could be upward using your words, pressure on that rate base.
David Arcaro : Got it. That makes sense. And I was wondering if you could elaborate a little bit on how you’re thinking about the rate impacts, coming from that load growth? Are these low-priced new commercial customers when you’re thinking about data center and manufacturing customers, such that there is a lot of grid investment that has to be covered by others within the system or other opportunities here? It sounded like you kind of see the opposite where you’re bringing in a lot of revenue that ends up being downward pressure on the rest of the system. So I’m wondering if you could elaborate a little bit on how you see rates progressing over time?
Dan Tucker : Yes. No, go ahead, Chris.
Chris Womack: No, we do expect to see rate decreases for our customers with these additional sales and the customer growth that we’ll experience. We think that should more than offset the cost of the resources needed to serve. And so we — affordability is something we pay a lot of attention to, and there are things we do internal. And we think that one of the benefits of this sales growth is having the opportunity to put downward pressure on rates for our customers across the board. And so that’s kind of how we see it and how we evaluate each project. I want to make sure that is, in fact, putting downward pressure on rates.
Dan Tucker : If you think about where probably every utility company was a year ago, one of the greatest risks facing all of this was affordability. We see this as a tremendous opportunity to derisk our outlook.
David Arcaro : Excellent. Thanks for that. Really helpful. Appreciate it.
Chris Womack: Thank you.
Operator: Thank you. Our next question is from the line of Jeremy Tonet with JPMorgan. Please go ahead. Your line is open.
Chris Womack: Hey, Jeremy.
Jeremy Tonet: Hi. Good afternoon.
