Operator: Thanks, Neil. And our next question comes from the line of Jeremy Tonet with JPMorgan. Jeremy, please go ahead.
Jeremy Tonet: Just wanted to kind of come back to Illinois overall here, given the lower-than-expected rate case outcomes from ICC, I think you expected? What’s the current view, I guess, in Illinois, as a regulatory jurisdiction here? And how have conversations with stakeholders been trending regarding the longer term outlook for Illinois and gas Illinois?
Gale Klappa: Well, I think, clearly, we’re going to see a lot more evidence as we move through 2024. Because there are really two dockets now of a very significant importance that are in their absolute beginning stage. The first occurred yesterday, when the Illinois Commission authorized the start of their review of our safety modernization program. And then, they’re also beginning this look at which will take we think, at least a year, this look at the future of gas in the state of Illinois. Actually, we’re looking forward to both of these dockets. Because there will be broad-based evidence from all kinds of parties, intervenors, across the board, who all have an opinion on this. I would just simply say that, that we’re encouraged by the fact that there’s going to be open, productive discussion in both of these dockets.
And when you step back and think about it, particularly with the fact that we talked about earlier, where from a safety standpoint, these cast iron pipes, 80% of them have a remaining life of less than 15 years. I think at the end of the day, Illinoisans are pretty practical. And at the end of the day, I think we’re going to get to a very reasonable point. This policy is just too important to the future, not only from an energy supply standpoint, but from an economic standpoint for the state of Illinois. Scott, you want to add anything to that?
Scott Lauber: No, I agree. It just, it’ll be good to get the facts on the table and everyone be able to talk about the issues and work through it. So we have a lot of good information and willing to provide it.
Jeremy Tonet: Got it. That’s helpful there. And then just wanted to pivot towards Wisconsin here with the [PFC] [ph], we’ve seen kind of some rapid turnover, if you will. And just wondering, I guess, updated thoughts on commission outlook and relationships going forward, given changes we have seen?
Gale Klappa: Well, I think probably the most significant change, obviously, is Chairman Valcq deciding that she would like to retire from a position and Summer Strand, who was appointed last year by the governor, becoming the new chair. And I would just simply repeat what we’ve said before about the qualifications that Summer Strand has, in her background and energy policy, her background in construction and engineering, very, very well suited to a position like this. So we’re looking forward to working even more closely with Summer. And then the other most recent appointment is a person who’s been at the commission and has headed up divisions and staffs at the Commission for I believe, more than a decade. So a good bit of experience to join Summer Strand. And Scott, I think we feel like both of these appointments are very balanced.
Scott Lauber: Yes. Very balanced. And having that experience in the commission and be able to fill one of the spots very quickly is good to see.
Jeremy Tonet: Got it. Thank you for that. And maybe just the last one, if I could just thoughts about the energy infrastructure segment in general, versus the regulated utilities. There was a pivot kind of a way before and then back towards it. And so just wondering how you think about I guess, investments and the two different sides and are you targeting higher returns on the infrastructure business in excess of the authorized ROEs, just wondering, kind of how you see the gives and takes there given the shifts in CapEx in recent years.
Gale Klappa: Well, look let me start, and then let Scott give you his view on this as well. Let me start by saying that when we originally laid out our new five-year capital plan, which would have been in early November, it was before obviously the rate order decision in Illinois. Essentially, that plan to achieve a 6.5% to 7% EPS growth, that plan crowded out, if you will, a number of infrastructure projects that we had in the due diligence pipeline. So it really was not all that difficult to begin to look at, what alternatives do we have here for high quality projects? I would say they’re kind of two things related to your question. The first is, that we are still seeing a significant number of high quality projects that we’re looking at number one, number two, we target in the neighborhood of an 8% unlevered IRR.
That’s kind of basically the way we look at this, that should result in a return slightly higher than the regulated business. But I would just add, and Scott can add on to this. For a number of the projects, we probably don’t talk enough about this. We’re building flexibility for our regulated business, particularly Scott for the projects that are in the MISO footprint.
Scott Lauber: That’s exactly right, Gale. So when these PPAs, lying down at the end, 10, 15 years, we’ll have the ability, then perhaps the either repower them, find another off taker, or especially in the MISO footprint, move them into the regulated utility here as we continue to decarbonize. So I think there’s a lot of opportunities here. And when we look at these projects, we also look at getting all the cash back within10 years, and for sure, in the time of the PPA. So we’re really looking at it is good cash flow, but also opportunities here in the regulated long-term.
Gale Klappa: Does that respond to your question?
Jeremy Tonet: Yes, that’s helpful. I’ll leave it there. Thank you very much.
Operator: Thanks, Jeremy. And our next question comes from the line of Durgesh Chopra with Evercore ISI. Durgesh, please go ahead.
Durgesh Chopra: I’ll take you up on that invite. I’m ready to come and bring a bunch of guys and gals with me. So let me know when.
Gale Klappa: Excellent, excellent. Very good.
Durgesh Chopra: So just clarification on 2024 EPS guidance, does that include the 300 megawatt project that you might be executing on or rather, buying in I think you said the first half the solar project?
Gale Klappa: Yes, it does. Yes. And we’re in final due diligence right now on that project. However, the project itself is not yet commercial. It’s close, but it’s not yet commercial.
Durgesh Chopra: Got it. So in that 4.80 to 4.90 range, we should be modeling like, half a year plus contribution from that project?
Gale Klappa: That’s fair. Absolutely. That’s fair.
