Avangrid Inc (AGR) 2019 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the AVANGRID Fourth Quarter and Full Year 2019 Earnings Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference over to your speaker for today, Patricia Joshua (sic) [Cosgel], Vice President of Investor Relations and Shareholder Services. Please go ahead.

Thank you, Jack, and good morning to everyone. Thank you for joining us to discuss AVANGRID's fourth quarter 2019 earnings results. Presenting on the call today are Jim Torgerson, our Chief Executive Officer; and Doug Stuver, our Chief Financial Officer. A team of AVANGRID officers will also be participating on the call to answer your questions. If you do not have a copy of our press release or presentation for today's call, they are available on our website at www.avangrid.com.

During today's call, we will make various forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect or because of other factors discussed in AVANGRID's earnings news release, the comments made during this conference call and the Risk Factors section of the accompanying presentation or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found on our website, avangrid.com. We do not undertake any duty to update any forward-looking statements.

Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of non-GAAP financial measures to the closest GAAP financial measures.

I will now turn the call over to Jim Torgerson.

Thanks, Patricia, and good morning, everyone, and thank you for joining the call. I think when we went into 2019, we knew it was going to be a challenging year. And -- but we took actions to position the company to be better for the future. Still, our -- we were very disappointed with our financial results, which were below our expectations.

However, in 2019, we did achieve some significant accomplishments in line with our long-term strategy that does position us very well for the future, particularly once new rates go into effect in Maine and New York. Now I'm also happy to announce that in New York, we filed a letter today notifying the commission we have reached a settlement in the New York State Electric & Gas and Rochester Gas & Electric rate cases.

Furthermore, we invested $3 billion, which was up 73% against 2018, to help modernize and upgrade the grid and increase our Renewables capacity. We achieved savings of $75 million pretax in 2019 from our Forward 2020 program, which helped to partially mitigate the negative impacts of lower-than-expected wind resources, the outage restoration and staging costs and lower-than-expected transmission revenues. But it also helped in reducing our cost structure, mainly in the corporate areas for the future.

In the Networks business, we recently received a final decision from the Maine Public Utilities Commission in the CMP distribution rate case and the metering and billing documents -- dockets. Now our rate cases in New York and Maine represent about 55% of our total rate base with new rate plans going into effect this year. In Maine, it will be on March 1. And then in New York, it should be in May, depending on the settlement, which we're drafting now.

Now one good thing in the New York case, the staff position on the minor storms will allow a recovery or a deferral of the vast majority of those costs, which have been plaguing us for the last 1.5 years. Our New England Clean Energy Connect transmission project did receive several key permits, the Certificate of Public Convenience and Necessity, the Massachusetts DPU, the Land Use Planning Commission. And we're continuing to making progress towards start of operation in 2022.

In Renewables, we continue to execute on our strategy. We commissioned 831 megawatts of wind projects in 2019, including 605 megawatts in the fourth quarter. And we are constructing 700 megawatts of onshore wind and repowering 366 megawatts of wind that are all expected to be in operation in 2020.

During 2019, we executed 480 megawatts of new PPA contracts and exceeded our long-term outlook target of 2,000 megawatts. We closed on the asset sale and transfer of a 50% interest of 2 Renewables assets with a positive impact of $0.32 per share, which exceeded the initial 2019 outlook estimate.

In offshore wind, our Park City Wind project, which is a 50-50 joint venture with Copenhagen Infrastructure Partners, was awarded 804 megawatts in a Connecticut offshore wind RFP. And we do expect to see some synergies with our Vineyard Wind project in terms of logistics, supply chain and, once constructed, in O&M. Then in corporate governance, we were named as one of the World's Most Ethical Companies by the Ethisphere Institute in 2019 and 2020 and received an award for Best Corporate Governance in the U.S. by World Finance Magazine in 2019. We were also recognize as the North American utility with the best corporate governance by Ethical Boardroom magazine.

Now turning to Slide #6. For the fourth quarter of 2019, net income was $223 million or $0.72 a share, up $0.34 year-over-year, and our adjusted net income in the fourth quarter was $230 million or $0.74 a share, which was up $0.18 versus 2018. Financial results in the fourth quarter reflect the sale and transfer of 50% of the 2 renewable assets in line with our strategy to optimize the value of our renewable portfolio.

For the year-to-date, net income was $700 million or $2.26 a share, which was up 18% or $0.34 a share over -- year-over-year. And adjusted net income amounted to $673 million or $2.17 a share, which was down $0.04 from 2018. The key drivers for the year-over-year results by business are in Networks, adjusted earnings per share decreased $0.07 to $1.50 per share. Results reflect the impact of higher depreciation, New York storm settlement and the NYSEG SAIFI reliability revenue adjustment and higher outage restoration and staging costs.

These negative impacts more than offset the rate increases in New York, Connecticut and Massachusetts. Although reduced by lower transmission revenues in Maine due to historically low volumes in the fourth quarter versus prior years, compared to our expectations, full year impact of the outage and restorations was a little bit higher.

Renewables results improved year-over-year with adjusted earnings per share up $0.12 or 21% to $0.72 per share, driven by the sale of assets, higher revenues from thermal and trading and the contribution of new capacity. This was partially offset by lower pricing-related impacts, expiring PTCs and lower wind resources for existing assets.

The Forward 2020+ Plan produced pretax savings of $75 million in 2019, which was in line with our target range of $70 million to $85 million. And this was mainly achieved through spend management initiatives, which contributed about $45 million, capitalized labor, which was about $15 million pretax. Now these savings helped to mitigate the impacts from higher outage restoration and staging costs particularly in NYSEG, the reduced transmission revenues in Maine in the fourth quarter and the lower wind production, primarily in the first quarter.

The key impacts during the last quarter versus our expectation by businesses that result in a lower-than-anticipated adjusted earnings per share, wherein the fourth quarter, Networks was negatively affected by the impact of the 2018 New York storm settlement and the NYSEG SAIFI reliability revenue adjustment, which totaled about $0.04 a share negative.

The inaction on the FERC ROE was about $0.06 a share, which I think most of you are aware that FERC did not act. And then the reduced transmission revenue in Maine was down -- caused us to be down about $0.05 a share. In the fourth quarter-end versus our previous expectations, Renewables benefited from larger-than-anticipated gain on asset sales, although net development asset write-offs of about $0.09 a share, which was partially offset by the below-normal wind resource of $0.03 and reduced wind pricing of $0.04.

Moving on to Slide 7. And before I do that, I want to mention that for the first part of the year through about February 24, we are on track with our wind resource production. The West is actually up significantly whereas the Midwest and Northeast are down about double digits and Texas is off a little bit as well. But so far, we're tracking with our plan for the -- up to this point in time.

Now on Slide 7, move on to the capital spending. We invested approximately $3 billion in 2019. And this represents a 73% increase opposed to last year, driven by growth in both business segments. Overall, about 55% of the capital spending in 2019 was in Networks and 45% in Renewables. By business, the capital spending in our Renewables amounted to approximately $1.4 billion, increasing by about $1 billion year-over-year due to projects under construction in 2019, repowering and a new offshore development lease area. Networks' capital spending increased by 17% year-over-year to $1.6 billion, driven by ongoing asset replacement, system automation and technology upgrades. We expect these increased investments to drive AVANGRID's future long-term growth.

Now turning to Slide 8, moving to our outlook for 2020. Our earnings per share is expected to be between $2.06 and $2.26 per share. We're guiding to our adjusted earnings per share, which is expected to be between $2.17 and $2.37 per share. For Networks, our 2020 outlook reflects additional stability with the conclusion of the New York and Maine rate cases and the resulting rate increases, which will allow us to earn our allowed returns and recover the amortization of regulatory assets and costs associated with our growing rate base, vegetation management and outage restoration and staging, absence of the New York storm settlement and NYSEG SAIFI reliability revenue adjustment as well. And then the negative impact we're going to see from depreciation of new assets, but most of that in lease for the Networks business, which should be included in rates.

Now there is no assumption for the FERC ROE included in our guidance. We just do not see whether FERC will actually make a decision or what direction it will go based on the Midwest ISO recent decision and now the rehearing that's occurring there.

For Renewables, our outlook is driven by normal wind production on our existing assets, assuming life-to-date asset production, so we've adjusted again the life-to-date asset production levels, the full year contribution of new capacity, which was 831 megawatts, and repowering benefits, including PTCs and increased production. A lower contribution from asset sales, we don't anticipate anything more than something in the $0.05 range this year.

Lower thermal revenues as 2019 benefit from increased volatility prices in the West. Our Klamath Cogeneration power plant significantly increased production, which really compensated for lower hydroelectric generation in the Northwest in 2019 and also a gas pipeline that was out of service, which caused the prices to be higher and we benefited from that. Our corporate outlook is driven by the impact of financing costs, driven by increased debt and lower positive tax adjustments.

Moving on to Slide #9 and the highlights from our Network business. In New York, as I said, the NYSEG and RG&E rate cases, we have reached a settlement and we notified the commission of that today. So -- and new rates would be expected to be effective in May of this year. In addition, we settled the 2018 New York storm investigation. And it involved a financial penalty of $10.5 million after tax, which we did not have all of that in our original guidance in the fourth quarter.

In Maine, final decisions in the CMP's rate case and metering and billing dockets were announced during Maine Public Utility Commission deliberations in January this year. For the CMP rate case, we received the written order last week with a 9.25% authorized ROE and a 1% negative ROE management efficiency adjustment until customer service metrics are met for 18 months. It has 50% authorized equity. There was a 25% increase in funding for vegetation management that takes it up to about $25.5 million, increased minor storm recovery to $8.1 million from $4 million and the collection of previously deferred under-recovered Tier 2 storms of $10 million in cash.

For the CMP metering and billing system, the examiner's report found no systematic problem within CMP's metering and billing systems that would have caused erroneous high usage on customers' bills. The examiner's report also identified issues with CMP's implementation of its billing software and requires establishment of an independent electricity use audit program and resolution of all remaining issues and complaints.

Turning to Slide 10, concerning our $950 million New England Clean Energy Connect transmission project. And that's going to deliver 1,200 megawatts of Canadian hydropower to the New England grid. And the project continues to advance through the permitting process. On January 8, we received a Site Law Certification from the Maine Land Use Planning Commission. The Maine Department of Environment Protection draft decision is expected in early March and final decision expected in April.

The U.S. Army Corps of Engineers approval is expected early in the third quarter, 60 to 90 days after the Maine DEP final decision. Then ISO New England I.3.9 approval is expected in the first quarter of 2020. The Presidential Permit, which is not needed to start construction, it's just needed to cross the border, is expected to be issued approximately 60 days after the U.S. Army Corps of Engineers and the ISO New England I.3.9 approvals. We still expect to start construction in the third quarter of 2020 and to start operation by the end of 2022.

While opposition to our clean energy project, which is supported by fossil fuel generators and the potential of a state referendum remain, we have contributed resources for a Political Action Committee called Clean Energy Matters, dedicated to helping Maine voters understand the benefits of NECEC and correct misinformation about the project. The benefits of the NECEC include $14 million to $44 million per year in lower future electricity costs in Maine, 3.6 million metric tons reduction in the regional CO2 emissions, which would be equal to at least 700,000 fewer cars on the road, $1 billion invested in infrastructure in Maine with $250 million in local benefits for Mainers.

Turning now to Slide 11. In Renewables, we are executing our strategy with 831 megawatts of onshore wind commissioned in 2019, including 605 megawatts in the fourth quarter with a 307-megawatt Karankawa wind farm in Texas, a 201-megawatt Montague wind farm in Oregon that came online in October and a 97-megawatt Coyote Ridge wind farm in South Dakota that came on in December of '19. Also in 2019, we purchased Patriot Wind, a 226-megawatt wind farm in Texas at COD in June.

We have 700 megawatts of onshore wind projects under construction and 360 megawatts of wind repowering that are all expected to be operational in 2020. We added new PPAs for 480 megawatts during 2019, including the 215-megawatt PPA for Montague Solar in Oregon and the 68-megawatt PPA for Camino Solar + Battery Storage in California, both secured in the fourth quarter. But also in 2019, we signed the PPA for 140 megawatts for La Joya II wind farm in New Mexico in the second quarter, which was not in our plan, and a 52-megawatt extension of the Tatanka Ridge Wind Project in South Dakota, again not in our plan in the first quarter.

On Slide 12, Renewables exceeded its growth expectations while optimizing its asset portfolio. We exceeded by 212 megawatts our 2018-2022 capacity target of having 2,000 megawatts operational by the end of 2022 with executed contracts. Of these 2,212 megawatts, 831 megawatts of onshore wind projects came online in 2019. And we've signed contracts for 1,381 megawatts of wind, solar and battery projects that are expected to come online between 2020 and 2022. We are not including the 400-megawatt PPAs executed for offshore wind, which now is scheduled no earlier than 2023.

We are moving forward with optimization of our renewable assets. In December, we closed the sale of a 50% ownership interest in 2 projects in Arizona to Axium Infrastructure. The EPS impact in 2019 was $0.30, exceeding our initial 2019 outlook estimate by $0.10 -- of $0.10, I'm sorry. This is a continuation of the ongoing strategic initiative to optimize our assets and pipeline. And we expect approximately $0.05 from sale of assets in 2020. We increased our pipeline by 19% year-over-year from 14.9 to 17.7 gigawatts.

Slide 13. Concerning the offshore business, the Bureau of Ocean Energy Management published a revised timetable of our Vineyard Wind 800-megawatt offshore wind farm in joint venture with CIP. The BOEM's new schedule places the Final Supplemental Environmental Impact Study on November 13 and the Record of Decision by December 18, 2020. Considering the revised base case, we target a commissioning date no earlier than 2023. And we also see no risk of the PPA termination under a later commissioning date. The good thing is, with this later date, it will also help develop synergies with our Park City Wind.

So during 2019, the project secured other key permits, including the approval from the Massachusetts DPUC of the contracts with the electric distribution companies as well as the approved permits for the interconnection with the regional grid for Massachusetts Energy Facility Siting Board. We anticipate qualifying for the 18% ITC for this investment. In addition, Vineyard Wind has been qualified for capacity of 156 megawatts in summer and 278 megawatts in winter in the ISO New England capacity auction in February, which also includes the 54 megawatts awarded in 2019.

In Connecticut, Park City Wind, our Vineyard Wind joint venture to serve Connecticut was selected in Connecticut's offshore wind RFP in December. Park City Wind will generate 804 megawatts of clean energy, which will provide the equivalent of 14% of the state's electricity supply. The project will be located near Vineyard Wind's other planned offshore wind farms, south of Martha's Vineyard, with an expected in-service date of about 2025. We're now negotiating a 20-year contract with the state distribution companies.

The project will reduce the regional greenhouse gas emissions, create jobs, generate direct economic benefits of about $890 million, including energy cost savings to Connecticut rate payers, including up to 26.5 million in workforce development initiatives. We announced a partnership with Marmon Utility LLC in Connecticut to supply offshore inter-array cable cores, creating the first U.S. Tier 1 offshore wind supplier. And Park City Wind has the potential to establish Bridgeport as an offshore wind hub.

On Page 14, you can see AVANGRID is developing offshore projects in 3 lease areas. In Massachusetts, Vineyard Wind holds 2 lease areas, which can accommodate up to 3 gigawatts and 2 gigawatts, respectively, and our share is 50% of that. Vineyard Wind and Park City Wind are being developed in the first lease area. Both leases are owned jointly with CIP and have still potential capacity for submission for -- in the future RFPs. In addition, the Kitty Hawk lease area is 100% owned by AVANGRID Renewables and has a potential capacity up to 2.5 gigawatts. Last week, on February 20, the Site Assessment Plan was approved by BOEM for Kitty Hawk.

The U.S. offshore wind market has gained considerable momentum in the U.S. and in the Northeast, in particular. Massachusetts, Connecticut, New York and Rhode Island have set ambitious offshore wind targets and almost 5,000 megawatts have been awarded. In addition, New York announced its second 1,000-megawatt offshore wind RFP with bids due in August and selection in November.

Slide 15. As one of the cleanest U.S. utilities and a leader in renewable energy, AVANGRID is at the forefront in ESG. In 2016, we pledged to reduce emissions intensity and to be carbon-neutral from our own generation by 2035, making AVANGRID the first U.S. utility to set a goal for carbon neutrality. AVANGRID defers to the UN's Sustainable Development Goals. And we are particularly focused on the goals targeting affordable and clean energy and climate action, which are SDG 7 and 13. But our activities also directly contribute to other goals, like life on land or industry, innovation and infrastructure, among others. We are committed to create value for our society in a sustainable way through our investments and initiatives in our communities.

In 2019, we actually reduced employee lost time accidents by 11%. We organized our innovation forum with the participation of students from MIT, Yale, Harvard, Cornell and UConn. AVANGRID is establishing a new private, secured fiber optic network, which is an industry-leading practice in cybersecurity.

On Slide 16, we continue to make important progress in our efforts to deliver the benefits of affordable, clean energy to our customers and communities. 2020 is the third year AVANGRID earned a place in the Global Clean 200 list of the world's most significant publicly traded firms according to the size of clean revenue from products and services that provide solutions for the planet. We're also a constituent of the FTSE4Good Index Series and participate in the Carbon Disclosure Project, a global environmental disclosure system.

AVANGRID also gained recognition as a leader in corporate governance. For the second consecutive year in 2020 and 2019 have been recognized by the Ethisphere Institute as one of the World's Most Ethical Companies. We also earned a prestigious Compliance Leader Verification status from Ethisphere Institute. AVANGRID was awarded Best Corporate Governance for North American utilities by Ethical Boardroom and recognized by World Finance Magazine for Best Corporate Governance in the U.S.

Now in conclusion, we continue to execute on our long-term strategy to deliver sustainable growth by investing in clean energy as we build the grid of the future and serve our customers through innovative and smarter energy solutions. For 2020, we'll continue executing on our long-term strategy and enhance the performance at our regulated utilities to drive our longer-term growth.

And now I'm going to turn it over to our CFO, Doug Stuver.

Thank you, Jim. Good morning, everyone, and thank you for joining us today.

I'm now on Slide 18. On this slide, we roll forward earnings per share from the fourth quarter and the full year of 2018 to the same periods in 2019 on a U.S. GAAP basis and on a non-U.S. GAAP adjusted basis. The adjusted EPS amounts in these periods show the impact of the exclusion of positive mark-to-market adjustments in the Renewables segment resulting from favorable price movements in our merchant hedges in the quarter-over-quarter and year-over-year periods.

In the quarter-over-quarter and year-over-year comparison, the impacts were $0.09 negative and $0.33 negative to our adjusted results, respectively. With our 4 repowering projects well underway, the adjusted results show the impact of the exclusion of negative accelerated depreciation, which were $0.05 quarter-over-quarter and $0.10 year-over-year favorable adjustments.

Finally, the additional significant item excluded from the adjusted GAAP EPS roll-forwards are impacts from tax reform recorded in 2018, resulting in a negative $0.13 quarter-over-quarter and negative $0.15 year-over-year impact. The full reconciliations for this are shown in the appendix if you'd like to review further.

As you can see on the slide, Networks' adjusted quarterly results are flat in 2019 versus 2018 while the annual results are lower in 2019 versus 2018. In the 2019 and 2018 calendar years, we had nondeferrable outage restoration and staging costs of $0.13 and $0.10, respectively, for a $0.03 negative year-over-year impact. In the fourth quarters of 2019 and 2018, we incurred $0.03 of nondeferrable outage storage -- outage restoration and staging costs as well.

In 2018, we also had additional secondary impacts from outages in the form of lower AFUDC and capitalized labor, along with the Katy penalty that represented a negative $0.04 impact. Those items, along with the $0.10 of outage restoration costs combined to produce $0.14 in outage-related costs for the 2018 calendar year. In 2019, we have the New York storm settlement and SAIFI revenue adjustment that combined for a $0.04 negative impact, bringing total outage-related costs to a negative $0.17.

Importantly, given our expectations resulting from the CMP rate decision and the New York company's rate case, we expect that if we have the same recovery and reconciliation measures in place in 2019, we would have mitigated approximately 80% to 90% of the roughly $0.13 in 2019 nondeferrable outage restoration and staging costs.

In the Renewables segment, the quarter-over-quarter and year-over-year comparison largely benefited from asset sales, new wind projects and thermal and trading revenues while pricing-related items and the PTC roll-offs were the negative drivers. Wind was marginally worse for our existing assets in 2019. But remember, this is compared to 2018 wind, which was also below our life-to-date average.

Our Corporate segment largely reflects higher interest expense as we issued a $750 million green bond to fund our growing portfolio of sustainable energy projects as well as period-over-period tax impacts. The next several slides provide more details on the business segment impacts.

I'm now on Slide 19, which summarizes the key results and business drivers for Networks. For the fourth quarter, you can see that adjusted EPS was flat quarter-over-quarter at $0.36. In the quarter-over-quarter comparison, we experienced a net benefit of $0.04 from rate increases with a $0.07 positive impact from higher rates and a $0.01 benefit from lower earnings sharing less the $0.04 negative impact from lower transmission revenues in our CMP utility. The lower CMP transmission revenues, which are below expectations by $0.05 for the quarter, were the result of unexpectedly low regional loads.

Networks also improved $0.03 from a number of other small benefits, such as improvements in capitalized labor and AFUDC. Those positive impacts were offset by a $0.03 negative impact from higher depreciation and a $0.04 negative impact from a penalty resulting from New York's review of our 2018 storm response and a SAIFI revenue adjustment related to outage frequency at NYSEG. Outage restoration and staging costs were flat in the fourth quarter of 2019 compared to the fourth quarter of 2018.

For the full year 2019, the Networks business reported adjusted EPS of $1.50 per share, which was a decline year-over-year of $0.07 or 4%. For the year-over-year comparison, rate increases provided a net benefit of $0.09, including a $0.17 positive impact from higher rates, a $0.03 negative earnings sharing impact and a $0.05 negative transmission revenue impact. The transmission revenue impact for the year was $0.08 below our expectations.

The positive impact of our rate increases were more than offset by a negative $0.03 earnings impact from higher outage restoration and staging costs, a $0.04 negative impact from the New York storm settlement and NYSEG SAIFI revenue adjustments and $0.11 of depreciation from new assets placed in service.

The Networks' results include the benefit of the achievement of our Forward 2020+ targets, resulting in an approximately $0.09 positive impact in these results.

Turning to Slide 20. Our Renewables segment achieved quarter-over-quarter and year-over-year improvement. Adjusted EPS for the fourth quarter of 2019 was $0.35, a $0.23 improvement from the fourth quarter of 2018. This largely reflects the successful sale and transfer of control for 50% of our Dry Lake II wind project and Copper Crossing solar project in the fourth quarter. Those resulted in a gain of $0.30 for the quarter-over-quarter comparison, offset by development pipeline asset write-downs of $0.03.

Wind performance for the quarter from existing assets was flat quarter-over-quarter and new assets in service, Patriot and Montague, contributed $0.01 versus the prior year's fourth quarter. Even though the quarter-over-quarter impact was minimal, as I noted earlier, 2019 was another low wind year for us overall with the fourth quarter 2019 net capacity factor at 28.7% compared to the 2011 to 2018 fourth quarter average of 30.1%.

Pricing-related impacts were negative drivers in the quarter-over-quarter comparison as well. Approximately $0.01 of this negative $0.06 impact is due to power prices while $0.02 is due to RECs and $0.03 is due to status changes. The status changes represent a combination of PPA expirations and contracts rolling to merchants due to the FirstEnergy Solutions bankruptcy.

Finally, adjusted EPS for the full year 2019 $0.72, which is $0.12 higher than 2018 and a 20% increase. The key drivers impacting the year-over-year comparison were similar to the quarter-over-quarter comparison with the asset sales net of development asset write-offs resulting in a $0.29 benefit. Our new wind projects commissioned in 2019 added $0.02 for the year and the climate, thermal and trading revenues were positive $0.05 for the year due to the higher prices and volatility earlier in the year in the Northwest, when we had an exceptionally cold first quarter and also the Canadian pipeline rupture.

This is partially offset by lower pricing-related impacts of $0.21, expiring PTCs of $0.04 and lower wind resource on existing assets. Wind production from our existing assets was down $0.02 year-over-year with a 21.9% net capacity factor in 2019 versus a 29.8% net capacity factor in 2018 or roughly 2%. Similar to the Networks business, embedded in the results is the approximately $0.09 per share benefit from our Forward 2020+ efficiencies.

Now turning to Slide 21. We take a look at the Corporate segment, which reported adjusted EPS of $0.04 for the fourth quarter of 2019, a decline of $0.04 from the fourth quarter of 2018. Adjusted EPS was a negative $0.04 for the full year, a decline of $0.09 compared to 2018. These quarterly and annual declines are largely driven by additional interest expense from the issuance of the $750 million green bond in May of 2019 and the period-over-period differences in taxes, including discrete tax items. The consolidated effective tax rate for 2019 was approximately 17%, excluding discrete items. And that's down from the 19% level that we had for the first 9 months of the year.

On Slide 22, we look at the financing and dividend strategies. As we noted in 2019, we issued a $750 million green bond. This brings our total green bonds outstanding to $1.35 billion. In addition to that, we have a $2.5 billion sustainability-linked credit facility that we implemented in 2018. Our credit ratings are very important to us and we maintain our stable BBB+, Baa1 ratings with the rating agencies. We're also maintaining our payout target of 65% to 75% and note that the Board recently declared a first quarter dividend of $0.44 payable on April 1 of this year.

On the next slide, Slide 23, we turn to our debt and cash flow for 2019. Cash from operations was $1.6 billion. We had combined cash capital expenditures from our growth in Networks and Renewables of $2.7 billion and dividends of $545 million. This resulted in us raising about $1.7 billion of additional short- and long-term debt to cover the gap. And then cash increased by $141 million compared to 2018. As expected, we're funding our strategic growth with debt and our net debt to total capitalization ratio is increasing, although still quite strong. We have a green financing strategy with the $750 million green bonds being issued and the total of $1.3 billion outstanding and again the sustainability of our credit facility.

On Slide 24, we look at our estimated cash flows and financial metrics for 2020. We expect operating cash flows of over $1.7 billion with improvements versus 2019 resulting from rate increases that moderate the impacts of outage storage -- outage restoration and staging costs, a return to more normal wind performance and new capacity placed in service. We expect capital expenditures of approximately $2.8 billion with over 70% of that spent on our core operations in the Networks business and the remaining $800 million primarily with new Renewables projects. This will increase our debt as we fund the growth in dividends with $1.2 billion in new debt, increasing our debt ratio to a still strong 38%. Those impacts improve our cash from operations pre working capital to debt ratio to approximately 16.6% from the 2019 level.

Now on Slide 25, here we show our 2020 EPS outlook of $2.06 per share to $2.26 and our adjusted EPS outlook of $2.17 to $2.37, along with individual business segment ranges. When we set this adjusted EPS guidance, we've considered several key drivers that Jim already mentioned. We don't assume any FERC action on the ROE decision in 2020. And therefore, this can be both a risk and an opportunity to our outlook if there is a decision from the FERC, depending on the ROE and the incentive mechanisms that are set.

We assume approximately $0.03 of nonrecoverable outage restoration and staging costs will still be exposed to in 2020 with the new rate plans in New York not expected to take effect until May. We believe our rate outcomes in New York and Maine will go a long way towards mitigating our outage and restoration costs. But we still have exposure early in the year until the new rates go into effect.

In our Renewables business, we're subject to wind resource variability. And as Jim notes, we're tracking with our outlook expectations through the first part of this year. And then our commercial operation dates of our projects in construction, the success of any asset sales and results could be impacted by changes in merchant prices.

On the asset sales, Jim had mentioned we're at $0.05 as the expectation in our 2020 outlook for that contribution. Taxes, ongoing efforts to implement best practices and operating efficiencies and operations and maintenance costs also impact the business. We assume a consolidated AVANGRID effective tax rate before discrete items of approximately 12% in our 2020 guidance.

Moving to Slide 26. We provide some key sensitivities for our 2020 outlook for each of these business segments, including distribution and transmission ROEs, the FERC ROE decision and outage and restoration costs in our Networks business, wind NCF, merchant prices and asset sales in our Renewables business and interest rates on new corporate debt.

Finally, on Slide 27, we conclude with investment highlights for our company. We highlight our attractive investment opportunities in both our Networks business and Renewables businesses, winning key awards in 2 major offshore wind RFPs and 1 major onshore RFP for our transmission project. Those position us as a leader in New England for the development of clean energy projects.

We also want to emphasize our leading role in being a sustainable energy company in the U.S., having the first carbon-neutral energy target, which we are committed to achieve by 2035 as well as the recognition and awards we've received as an important sustainable company with strong corporate governance. We have a distinctively strong balance sheet and solid investment-grade credit ratings and a commitment to increase our dividend in line with our 65% to 75% target payout ratio.

Thank you. And with that, I'll now hand the call back to our operator, Jack, for any questions.

(Operator Instructions) Julien Dumoulin-Smith from Bank of America.

This is Alex Morgan calling in for Julien. I first wanted to chat a little bit about asset sales. And I'm aware that long-term guidance is going to be provided at the Analyst Day, closer to midyear. But just in terms of expectations from '20 going into '21, how should we be thinking about asset sales and maybe some of the other items that folks might think of as more or less onetime?

Yes. Going into 2020, we only anticipate -- and keep in mind, we're looking at development projects. And one that we would look to sell that would make sense to be owned by somebody else or to develop and move along because they don't meet our criteria or whatever reasons. But the fact is we're figuring it's not going to be any -- it's somewhere in the neighborhood of $0.05 a share, and we would think that's about all for 2020. We don't anticipate anything else.

The ones we sold in 2019 to Axium, we got a significant premium on those. As you saw, we had a gain of $0.32 a share. And we do get a little bit of a hit because of the reduction in the revenue we would get, but we still get 50% of it. And I think the impact was about $0.01 a share. So we -- you could see why we chose to do that transaction. But going forward, it's not going to be anywhere near as significant.

Okay. Another question that I have is about ROE recovery. And maybe we can talk a little bit more about the settlement that you've filed, notice of today in New York and then also with Maine. I know with the 100 basis points adjustment, that puts you at about an 8.25% authorized ROE for at least 18 months there. How should we be thinking about earned ROE recovery in both Maine and New York?

Well, first off, in New York, all we've done is file a letter with the Commission, indicating we've reached the settlement with staff and a few other parties. And the terms of that won't be public for a little while. And in Maine, as you correctly said, the ROE that's being allowed for the next 18 months, at least, is 8.25%. I don't know, Tony, do you want to comment on what you see?

Sure. So as Jim said, agreement in principle has been reached with the New York staff and several parties. We filed that this morning. Over the next several weeks, the settlement document will be put together, and we'll be seeking the support of many of the parties who have been involved in the case. So that's underway and going well, and we're happy that we were able to file that this morning.

And in Maine, the decision has come out, and it is public. So the -- that penalty will stay in place, the 100 basis point penalty for 18 months. We do have -- the mechanism is that there is a -- it's a rolling average of the performance of certain customer service metrics. We are currently tracking in compliance with all those metrics right now. So the goal for us is to continue to maintain that level of performance. And at the end or as we get to the end of that 18 months, we'll be able to file to have the ROE penalty removed and reinstated, the 100 basis points going forward. And they specifically say in there that we do not have to necessarily file another rate case, but there's -- the exact mechanism is not yet well defined. So there is a process that we will have to file and do that going forward.

And Alex, just keep in mind that from an earned standpoint, in New York, we still have 4 months where we don't have the rate increases. So for NYSEG, it's going to -- we're going to be a low return on an earned ROE. I think we're probably down, I don't know, Bob, was it 5%, 6%, in that neighborhood is what we had said for the first 4 months. And then hopefully, we'll be able to earn the allowed return. Because keep in mind, New York, there's -- if you look at ConEd's settlement, there are a lot of trackers, we would expect we'll end up with a number of trackers as well, which should put us in a position to earn the allowed return.

In Maine, it's going to be a little more challenging. We've got 2 months where we're not going to have a rate increase because it doesn't go into effect until March 1. And then we've also had the -- there's a pension adjustment, which hasn't been allowed, which is about $5 million. So that's going to have an implication on the allowed return. I can't really give you a prediction on what that's going to be. But knowing it's going to be a little more challenging in Maine, at least this year. Going forward, we're positioned well, though, is the way I look at it by settling the rate case in New York, getting the outcome in Maine and getting the settlement, the docket on the billing and metering done, getting the 2018 with storm hearing in New York behind us, even though we suffered a penalty on that. So I think we've put all these things, gotten them all resolved. So now we can move forward and execute on our plans.

Yes. I would just reiterate, I think 2020 will be a bit of a transition year because there are some onetime items, as Jim said, particularly at CMP and we have stub periods of 2 months at CMP and 4 months at the New York companies, recognizing those -- the distribution portion of CMP in New York, those 2 amount to more than half of our rate base. But looking at 2021 and beyond then, Tony mentioned, we expect to -- and our goal is that within 18 months, that 100 basis points to be lifted, and we really see then the ability of those companies to fully see the impact of the rate agreements that we have in place.

Praful Mehta with Citigroup.

So as you said, 2019, clearly a little disappointing from your perspective. As I look at the EEI guidance you gave around the adjusted EPS and the 12% to 14% or the 8% to 10% adjusted EPS growth rate through 2022, given what you're now guiding for 2020, do you still see that as achievable? Or do you now see that the 8% to 10% CAGR that you talked about is more difficult and you want to reset that number going into the Analyst Day?

We'll look at it at Analyst Day, Praful. I mean we haven't done anything beyond that yet, so we really can't comment on it. But we will reset that number or that range when we hit the Analyst Day in May.

Got it. Okay. Then in terms of the NECEC project and the referendum, you still seem to have the target of starting construction. But it sounds like construction will begin before the outcome of the referendum. Is that still the right understanding? And how do you expect to kind of offset the risks of a negative referendum outcome?

Yes, sure. So a couple of things, Praful, I would say. First, as Jim mentioned, we established a PAC called Clean Energy Matters. And its focus is twofold right now. One is, obviously trying to correct a lot of the misinformation that, quite frankly, fossil fuel interests are having an impact in Maine with, so that's number one. But also very importantly, right now, we are in the midst of the Secretary of State reviewing the 75,000 signatures to ensure their validity. And one of the things the PAC will be doing is to do its own review of that. So the Secretary of State has 30 days.

That should be completed the 4th of March, and then we'll have 10 days to do our own review. So that's the first and foremost. If after that process, they still have the minimum roughly 63,000 valid signatures that are needed to move forward, then obviously, the PAC will continue to focus on what it's been doing to get information out there about the benefits of the project, both for Maine and for New England in an effort to defeat that. When it comes time, end of Q2 or early Q3, where we have all the permits and we look to construct, we'll make a decision at that point. But our goal right now is everything is systems go to begin construction in Q3.

And we're going to monitor things in Maine to make sure -- to see how things are going. And we'll make a decision as to how much we intend to invest at that point in time.

Fair enough. And just lastly, in terms of just management and next steps. I know there was a change made last year, I think, in June, to bring a Deputy CEO, as you all know. So just wanted to understand, how does that timing of that play out? What are the next steps there? Any kind of changes that we should be thinking about or understanding? That would be helpful as well.

Nothing new on that, Praful. I mean we made -- that was really for the long-term succession planning process that we have at AVANGRID, so nothing new.

Michael Sullivan with Wolfe Research.

Yes. I wanted to start with the Networks number that you guys put out for 2019. So I think you highlighted some of the items in Q4 that totaled about $0.15 relative to expectations. But the year actually came in, I think, $0.18 below the low end of where guidance was going into this report. So maybe just any more color on what else had an impact there.

We'll let Doug pick up the numbers.

Pick off a few of the items here. So we've got, obviously, the FERC ROE item that did not come through lower transmission revenues, the New York storm settlement, safety revenue adjustment. And then we had some other miscellaneous items, such as a gas penalty item, uncollectibles, depreciation, construction work in progress write-off. So all of those, I would say, really kind of combined to get us to that reset level that we've ended up for the quarter.

Okay. And can you just provide a little more detail on the Maine transmission revenues? And how volatile that can be year-to-year and how the sort of investment recovery works here? I'm just a little unfamiliar with that being such a big swing factor on an annual basis.

Yes. What happened in Maine in the fourth, it was really all in the fourth quarter. We saw a decline in the volume, the output that went through the transmission lines in New England. And so we have the share in the regional network service and it declined for that. And so in the past, it's been up and down a little bit. And maybe, Tony, you can talk a little bit about what's going on there.

Yes. So we're evaluating that right now because the mechanism in Maine, while we're both -- well, Maine and Connecticut is all part of the ISO New England process. In Connecticut, we've got a rate mechanism that allows us to recover through the local loads, any discrepancies to earn our allowed return. So it effectively acts like a decoupling. That doesn't exist in Maine. We're looking at some opportunities right now that -- to investigate that going forward. There is a process in ISO New England that is underway that changes the rate structure that would effectively accomplish that same level of stability that we have in Connecticut right now. So it's something we're looking at because we do want to be able to get the variability out of this segment going forward.

Great. That's really helpful color. And then my last one, just switching to the renewable side of things. Can you just remind us where you guys are on a percent contracted basis? And as we think about 2020 guidance, how exposed you are to merchant pricing and also what -- how much PPAs are rolling off next year?

Yes. So at the end of 2019, we're 69% contracted. And I think the average life of those is about 9.5 years, plus we have another 13% in hedges. So it gets us to an all-in 82% coverage on our price exposure. As you move out to the subsequent years that based on where we sit today, it drops off, but then kind of recovers in the form of new projects coming online that are fully contracted. So we stay in the 70-plus percent coverage ratio out for at least 3 years into the future. And again, that will -- I expect, go upward as we move through time.

Caroline Bone with Evercore ISI.

I guess I'm just wondering if we could follow-up on NECEC. Can you talk about what sort of options you guys have if the referendum in Maine doesn't go your way?

There's a lot of moving parts to this, and some of it, quite frankly, we can't get into. There's certainly the ability for core challenges, depending on the nature of the referendum. Obviously, the first and foremost, as I mentioned, is we're focused on looking at and ensuring that the validity of the signatures that are there, making sure there are at least 63,000 valid signatures. But this could go in a number of different directions, so it's really hard to say. And that's why what I said earlier was that the goal is to start as soon as we have all of our permits, and we expect that by early third quarter, and we'll assess at that time kind of where all these potential moving pieces are.

I mean the fossil fuel generators in Maine and New England continue to spend significant money, trying to kill this project because this project will introduce 1,200 megawatts of clean energy, which means they'll make less on their fossil fuel plants. And so we've been geared up and continue to focus on helping people in Maine truly understand the benefits of the project, and making sure that if there is a referendum, that the signatures were valid.

Just on that signature point, have you been able to actually see the list? Or do you have to wait until March 4?

Right now, it's in the hands of the Secretary of State. They get 30 days essentially from when they were submitted earlier in the beginning of February. So as I said, by March 4, they will be done with their assessment, and then we'll have an opportunity. There are some things that we can do in the interim, but the reality is our best opportunity will be when we have that 10-day window. We'll know by the middle of March where that referendum is.

Okay. That's helpful. Then the other question I had was just if you could quantify, and this is on the Renewables business, if you could quantify what sort of EPS uplift we should expect from you specifically returning to normal wind production in 2020.

Yes. So just by way of example, for our existing resources in 2019, we had a 29.1% net capacity factor. If you look at a life-to-date average which now includes 2019, which unfortunately, again, brought down that life-to-date average, that worked out to about 30.2%. So you've got basically 1.1% of improvement. And then if you go to our sensitivity table, basically, for every 0.5% plus or minus in net capacity factor, that represents about $0.04 per share. So that should give you some idea of how those numbers should be.

Insoo Kim with Goldman Sachs.

Sticking to renewables for a sec, could you give a little bit more color on as the current PPAs and the current hedges start to roll off and you replace that with new PPAs or future hedges? What type of difference we could see potentially given what you see today in the market for pricing?

So the pricing, when you look at PPA, they reflect market pricing, but then they're signed up for a little longer term. So maybe Alejandro can give you the best sense of what's going on with pricing today.

Yes. Thank you, Jim. Well I mean, as you were commenting before, we have been in the range of 70% right now of long-term PPAs on our assets. And we are -- I mean, our objective is to keep that percentage in the range of 70%, 75%. So as PPAs are coming to an end, either we substitute them with new assets with long-term PPAs again, or otherwise what we do permanently is monitor for other kind of contracts and volumetric hedges or price hedges that can bring this figure back to that range of 70%, 75%, which is what we are targeting.

But in terms of pricing, so given where the market forwards are, we would assume that all else being equal, that the overall pricing, whether hedges or PPAs could be potentially a downward trajectory from before?

I -- when you look at it, the -- I don't know if it's going down much more because they've been down for the last couple of years. So in the forward curves, you look at those depending on which ones you look at, they show an uptick in the 10 years out. Now how much that reflects in the PPA price, it remains to be seen because you're negotiating those typically. And you're either responding to RFPs or directly negotiating with customers.

So as our prices -- our PPAs roll off, you'll start seeing a lower-average PPA because the higher-priced PPAs are starting to come out. And if you look at the slide we had on page, I guess, Page 40, you can see that the average PPA went from $53 down to $50.6 in '19. And the merchant prices, mainly, when you look at it, the merchant prices were like $29 for energy in 2018 and down to $27 on average in '19. The bigger change was in the RECs and the hedges, which dropped down.

So -- but we're not seeing, I don't know, if Alejandro sees any differently, but we're not really seeing any big change in prices right now. Natural gas being low as it is, it's down to, what, $1.80 or something right now. That will have an impact on prices in certain markets.

For 2022, I'll just add that we have nothing really expiring from a PPA standpoint. So there's not really an exposure for that year.

Understood. And on the Networks business, I think I heard you guys say you filed a letter with the Commission today. I don't know if anything is publicly available in terms of filing, but does your Networks guidance in 2020 embed the settlement terms that you may already know and have been reached? And are you able to share in terms of ROE and potential rate base numbers that the settlement reached embedded?

All we filed so far is the letter to the commission, and it is public. It says that we reached a settlement with the staff and a few other parties. There are no other terms available at this point.

Yes. Over the month of March, the actual settlement document will be drafted. So we would expect by, let's say, the end of March, that you probably have a document that's public that will be able to give you the types of information you asked for.

Got it. But in terms of the guidance for '20, you've embedded some portion of what you've reached?

Yes, yes, yes. Absolutely.

Yes, absolutely, for the last 8 months of the year.

Jeffrey Campbell with Tuohy Brothers.

We've had a lot of good specific questions, so I'm going to ask a couple of a little bit broader ones. For 2020, Renewables are approximately 30% of the positive adjusted earnings per share. And Renewables will also receive about 28% of the 2020 CapEx versus 47% in 2019. As you look out over whatever time period is appropriate, what trends do you foresee for Renewables, either as a percentage of total adjusted revenues, percentage of total CapEx spend or both or whatever other metric you prefer?

I think the best way to look at it is, first off, we're going to be redoing our long-term outlook, and we'll have that for Investor Day in May. So I think it's better to comment on it at that point when we -- as we look to see the future, because we're going to be extending the time frame that we look out, probably looking at more like through 2024 at this point. So we'll be able to give you a good solid answer at that point on the longer-term outlook. Right now, I would say, as of the long-term outlook we had in the last -- a year ago, it's probably in the same ballpark of 70-30, 75-25.

We're going to update all that for May.

Right. We'll look forward to that in May. This is a little bit broader question. It's probably admittedly further out in the future. But I was just wondering if you are looking at any of your existing wind farms as candidates for a hybrid buildout. With some of the wind throughput variability, it would seem like adding solar and/or storage might provide a nice boost, and it also seems

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Yes. I know we were looking at that at one of our wind farms. So Alejandro, do you want to talk about that a little bit?

Yes. Well, it is certainly something that we look at. And generally now wind farms are one opportunities for hybridation. There are some markets that are better suited for that. But at the end, it's an analysis on one-by-one wind farm depending on grid capacity and depending on land issues and permitting issues. But yes, it's certainly something that we look at closely.

Tim Winter with Gabelli.

Tim? Hello?

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Can you hear me?

Yes, Tim. We got you now.

Okay. Sorry about that. I have a few questions about the renewable market. First, your 18-gigawatt pipeline. Can you talk about how you move that into construction phase? Do they -- does each project need to be contracted?

And then second, is -- does the market appear to becoming more competitive? Are margins thinning?

And then finally, dramatic improvement in the renewable IPP market or stock market yieldco market, if you will. Any thought about creating a yieldco and recycling capital through that -- through an entity like that?

Well, let me deal with the yieldco first, and then Alejandro can talk about the other stuff. I mean we always look at ways to be able to finance things better and use our capital appropriately. So with the yieldco market doing better, it's something to at least think about. In the past, it's not an area that we looked at, because frankly, we didn't need the capital that we'd recycle through a yieldco. Going forward, as we progress, maybe it's something that could bear fruit. So it's something we're going to obviously take a look at. So we're keeping that in the back of our minds right now, and maybe more on the forefront as the future moves. So maybe Alejandro can talk about the other questions.

Yes, sure. So on the pipeline, right now, as we have mentioned in the presentation, we have a pipeline of 17.7 gigawatts. So this is pretty much uniformly distributed among our 3 technologies, so a little bit bigger on solar. And what -- obviously, the way in which we develop this pipeline is try to align as much as possible the development maturation process with the offtake opportunities. And then we take investment decisions when -- once both the development trend, development path and the offtake path are mature enough.

And this is actually something that has to do with what we have discussed about selling assets as well because in some cases, because we cannot build our full pipeline in some locations because of the status of development of some projects or the status of offtake opportunities for them. It is a good opportunity for us to sell those rather than building them.

And what about the market, Alejandro? Are you seeing any -- I guess, Tim was asking if we've seen any deterioration. I don't know that we have.

Well, deterioration, I wouldn't call it that way. I mean we are analyzing the different markets which are evolving in different ways. There are areas that were not good markets for us in the past that might be coming in the near future and other markets that are getting saturated, where we have been very successful and maybe we are not going to be that successful anymore. So I mean it's a dynamic process, and we are obviously looking at that on a regular basis.

Paul Patterson with Glenrock Associates.

Just a few quick follow-ups on the FERC ROE expectation where you said that you had no assumption, I think. I was just wondering, what does that actually mean, I guess?

Basically no decision that would impact 2020 results.

Okay. Okay. I got you. And then in terms of the New England Energy Connect, have you guys done any internal polling? By internal, I mean, have you guys done any polling on how that referendum looks with respect to the Maine...

Yes, we have. We do polling on a monthly basis, started back in December.

And how does it look?

Obviously, that's relatively confidential given the nature of the atmosphere in Maine, but we continue to push very hard through our New England clean energy -- not New England, but Clean Energy Matters PAC, I should say. Push very hard because we think it will make a difference when people truly understand the facts about the project, and we can demonstrate what's true and what's not based upon some of the misinformation that's being put out there.

Okay. So you guys feel pretty confident that if a referendum -- I mean, am I understanding this correctly that if a referendum does make it to the ballot, that you'll prevail where the ballot initiative will not prevail?

That's our goal.

Okay. And just in general, how should we think about what -- because you're going to start construction before then, it sounds like. What should we think about the total capital investment that will be in place maybe by the time -- by Election Day, I guess?

Yes. I think what I would say on that is, I would defer until we do our Investor Day in May. We'll know a lot more then in terms of where we are with things and have an opportunity to update the time line of expenditures from what we had last put out back in February of last year.

Okay. And then the New York terms are not public, you're not going to share any of them with us?

We can't. Those settlement discussions, Tony have been and I are confidential. All that's been announced is virtually a letter to the ALJ that said a settlement has been reached and the parties will look to draft the document for submittal to the commission by the end of March.

So you should have that by the end of March, once we get it to the commission.

Andrew Levi with ExodusPoint.

Just a few questions. Just on the power line, do you have any earnings embedded into 2020 guidance for that AFUDC?

Yes, there's some.

There's some, but it's not much at this point.

What's it like, $0.05?

I think last year, when we did the long-term outlook, we had $24 million pretax. And that assumed we were going to spend several hundred, $300-plus million in this year, which -- that's just not going to happen. So I think it's -- and as Bob just said on the last call that we're going to update things in the Investor Day in May, but we have very little embedded into our outlook right now.

Okay. And then as far as the ballot initiative itself, any clue, is it about 50,000, 60,000 votes that kind of are needed, yes votes that are needed to kind of get it passed? Or it's not that analyzed, I guess?

You need 63,000 needed to -- it's basically 10% of the number of people have voted in the previous election. A little over 63,000 valid signatures. They submitted about 75,000.

No, no, no, not the signatures. I'm wondering how many like votes, like so assuming it gets...

Oh, it's a majority, it's a majority vote.

Oh, it's a majority. Okay.

At Election Day, it would be a majority vote. So over 50%.

And then just to make sure that I'm using the right base for -- to grow off of. The 2019, I guess, had about $0.32 of onetime gains in it, is that right? And then you had some storm issues that you might get back. But is it kind of like $1.90-ish type of clean, clean number that we should be thinking about that that's the '19 starting point? And then I guess, after backing out $0.12 of one-timers in '20, your kind of clean base is around $2.15-ish now is rounding up?

I mean Andy, in terms of 2019, I'd say you've identified the big item. We've got the $0.32 for the asset sale. In 2020, we assume $0.05. So year-over-year, that would be about a $0.27 differential. In terms of other items in 2019, we've had different pluses and minuses that throughout the year, that pretty much, I'd say, add up to or net out to no major net positive or negative.

So I'd largely just use that as a kind of -- I mean, the transmission is one item that we talked about today, that was a downside for 2019. We expect to see a better path next year. We had some penalties in New York, a penalty along with the negative revenue adjustment. On the positive side, we had an asset retirement obligation adjustment in Renewables that we would not expect to recur. So those helped to kind of somewhat wash against one another.

Ashar Khan with Verition.

My questions have been answered.

Praful Mehta with Citigroup.

There are no further questions at this time. I would now like to turn the call back over to the presenters for closing remarks.

Okay. Well, thank you, everybody, for listening today and for your questions. Should you have more, I'm sure you'll contact our Investor Relations team. So we're optimistic about how things are going to go with -- particularly with the rate cases being resolved. And so now we can -- we'll have a few challenges this year, but I think we're positioned very well for the future. So thank you all for your participation.

This concludes today's conference call. We thank you for your participation. You may now disconnect.