CMS能源 (CMS) 2023 Q2 法說會逐字稿

Good morning, everyone. Thank you for standing by. Welcome to the CMS Energy 2023 Second Quarter Results Conference Call and News Earnings release. The earnings news release was issued earlier today and the presentation used in this webcast are available on CMS Energy's website in the Investor Relations section. Today's call is being recorded.

大家，早安。謝謝你的支持。歡迎參加 CMS Energy 2023 年第二季度業績電話會議和新聞收益發布。收益新聞稿已於今天早些時候發布，本次網絡廣播中使用的演示文稿可在 CMS Energy 網站的投資者關係部分獲取。今天的通話正在錄音。

(Operator Instructions) As a reminder, there will be a rebroadcast of this conference call today, beginning at 12:00 p.m. Eastern Time, running through August 3. This presentation is also being webcast and is available on CMS Energy's website in the Investor Relations section.

（操作員說明）謹此提醒，本次電話會議將於今天中午 12:00 開始重播。東部時間，持續到 8 月 3 日。該演示文稿還進行網絡直播，並可在 CMS Energy 網站的投資者關係部分查看。

At this time, I would like to turn the conference over to Sri Maddipati, Treasurer and Vice President of Finance and Investor Relations. Please go ahead, sir.

現在，我想將會議交給財務主管兼財務和投資者關係副總裁斯里·馬迪帕蒂 (Sri Maddipati)。請繼續，先生。

Thank you, Michelle. Good morning, everyone and thank you for joining us today. We apologize for the delay as we were experiencing technical difficulties. If you have any questions and were unable to participate on the call, please feel free to give me or (inaudible) a call after this earnings call.

謝謝你，米歇爾。大家早上好，感謝您今天加入我們。由於遇到技術困難，我們對延遲表示歉意。如果您有任何疑問並且無法參加電話會議，請隨時在本次財報電話會議後給我打電話或（聽不清）電話。

With me are Garrick Rochow, President and Chief Executive Officer; Rejji Hayes, Executive Vice President and Chief Financial Officer. This presentation contains forward-looking statements, which are subject to risks and uncertainties. Please refer to our SEC filings for more information regarding the risks and other factors that could cause our actual results to differ materially. This presentation also includes non-GAAP measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in the appendix and posted on our website.

與我在一起的有總裁兼首席執行官加里克·羅肖 (Garrick Rochow)； Rejji Hayes，執行副總裁兼首席財務官。本演示文稿包含前瞻性陳述，這些陳述存在風險和不確定性。請參閱我們向 SEC 提交的文件，了解有關可能導致我們的實際結果出現重大差異的風險和其他因素的更多信息。本演示文稿還包括非公認會計原則措施。這些衡量標準與最直接可比的公認會計原則衡量標準的對賬包含在附錄中並發佈在我們的網站上。

Now I'll turn the call over to Garrick.

現在我將把電話轉給加里克。

Thank you, Sri and thank you, everyone, for joining us today. CMS Energy, we deliver, we say it and we back it up. So what makes it work for all stakeholders is this investment thesis that we start with a nearly ever earnings call. I've reiterated the key points of this thesis on many occasions. Today, I want to draw attention to 3 key components. First, we continue to make industry-leading progress on the transformation to clean energy. This is required to position the business for the future and I will share more evidence of our good work this quarter with the exit of our coal units at our Karn facility and the acquisition of the Covert Generating Plant.

謝謝斯里，謝謝大家今天加入我們。 CMS Energy，我們交付、我們說到、我們支持。因此，使它對所有利益相關者都有效的是我們幾乎從一次收益電話會議開始的投資論點。我已經多次重申了這篇論文的要點。今天，我想提請大家注意三個關鍵組成部分。一是清潔能源轉型繼續取得行業領先進展。這是為未來業務定位所必需的，我將分享更多有關本季度我們良好工作的證據，包括退出卡恩工廠的煤炭裝置以及收購隱蔽發電廠。

Next, Michigan continues to be a solid place for investment. Our energy legislation is one of the best in the country, where we operate in a top-tier regulatory environment, providing important certainty for critical customer investments and there continues to be evidence to support it. I'll share the details on our fourth consecutive settlement in our recent gas rate case. Finally, you'll hear from me on the strong progress we made in cost management, the CE Way and other countermeasures to offset the unplanned headwinds experienced early in the year. I'm pleased with the progress and remain confident in our plan to deliver 2023 and beyond.

其次，密歇根州仍然是一個可靠的投資地點。我們的能源立法是全國最好的立法之一，我們在頂級監管環境中運營，為關鍵客戶的投資提供了重要的確定性，並且持續有證據支持這一點。我將分享我們在最近的天然氣費率案件中連續第四次和解的詳細信息。最後，我將向您介紹我們在成本管理、CE 方式以及其他抵消年初遇到的意外阻力方面取得的巨大進展。我對進展感到滿意，並對我們在 2023 年及以後實現的計劃充滿信心。

Our investment thesis is simple. It's worked for more than 20 years, regardless of conditions to deliver the operational and financial results across the triple bottom line for all our stakeholders.

我們的投資主題很簡單。它已經運行了 20 多年，無論條件如何，都能為我們所有利益相關者提供跨越三重底線的運營和財務成果。

At CMS Energy, we like to say, leaders lead and we are leading the clean energy transformation. We've set industry-leading ambitious net zero targets for both our gas and electric systems and we continue to get it done. Our actions today serve as proof points that we can and we will achieve our targets. In June, we retired our Karn units 1 and 2, removing 515 megawatts of coal generation for Michigan, further reducing our carbon profile. I'd like to take a moment to recognize the service of the individuals at Karn who dedicated their careers providing energy for our customers. I had the opportunity to be there in the final days of the facility's operations and I'm proud to share the pride our coworkers have for their work. I'm also proud of the work we have done to provide a just transition, either to retirement or a new place within our company, for those who served at this facility.

在 CMS Energy，我們喜歡說，領導者引領，我們正在引領清潔能源轉型。我們為燃氣和電力系統設定了行業領先的雄心勃勃的淨零目標，並將繼續實現這一目標。我們今天的行動證明我們能夠而且將會實現我們的目標。 6 月，我們退役了卡恩 1 號和 2 號機組，減少了密歇根州 515 兆瓦的煤炭發電量，進一步減少了我們的碳排放量。我想花一點時間來表彰卡恩員工的服務，他們致力於為我們的客戶提供能源。我有機會在該設施運營的最後幾天親臨現場，我很自豪能夠分享我們的同事對他們的工作的自豪感。我還為我們所做的工作感到自豪，我們為在該機構服務的人員提供了公正的過渡，無論是退休還是在公司內的新職位。

As we transition out of coal, it is imperative that we maintain reliability for our customers and our state. And so in June, we assumed ownership and operations of the Covert Generating Plant. This existing 1.2 gigawatt facility maintains important, low cost, reliable electric supply in Michigan and further bolsters the MISO footprint.

當我們從煤炭轉型時，我們必須保持客戶和國家的可靠性。因此，在六月，我們承擔了秘密發電廠的所有權和運營權。這個現有的 1.2 吉瓦設施維持著密歇根州重要、低成本、可靠的電力供應，並進一步擴大了 MISO 的足跡。

I'm proud to share our industry-leading commitments are being noticed, and we are now included in the MSCI ESG Leaders Index, the only vertically integrated utility to be included in this index. These are proof points, evidence in our leadership of this important transformation across the industry and will help us attract incremental capital to CMS Energy to bolster our customer investments. Adding to the good work of the quarter, we signed more contracts in our Voluntary Green Pricing program, which has now grown to 341 megawatts of own generation and I see further growth on the near horizon. We received approval for nearly $11 million in grants for RNG facilities to support farms we partner with as we decarbonize our gas systems. And we expect our 201-megawatt Heartland Wind Farm, which qualifies for a 10.7% ROE, will be operational later this year.

我很自豪地告訴大家，我們行業領先的承諾正在得到關注，我們現已被納入 MSCI ESG 領袖指數，這是唯一被納入該指數的垂直整合公用事業公司。這些都是我們在整個行業這一重要轉型中的領導力的證據，並將幫助我們吸引增量資本到 CMS Energy，以支持我們的客戶投資。除了本季度的良好工作外，我們還在自願綠色定價計劃中籤署了更多合同，該計劃目前已增長至 341 兆瓦，我認為不久的將來會進一步增長。我們獲得了近 1100 萬美元的 RNG 設施撥款批准，以支持我們合作的農場實現天然氣系統脫碳。我們預計 201 兆瓦的 Heartland 風電場（ROE 為 10.7%）將於今年晚些時候投入運營。

While these are just a few highlights, they demonstrate what we do at CMS Energy. We set big goals, we get after it every day and we deliver, leading the clean energy transformation.

雖然這些只是一些亮點，但它們展示了我們在 CMS Energy 所做的事情。我們設定宏偉目標，每天都在追求它並實現目標，引領清潔能源轉型。

Turning to Slide 5. I want to take a moment to talk about the constructive regulatory environment in Michigan. Recently, the governor reappointed Chair Scripps to a full term ending in 2029 and appointed Alessandra Carreon to fill the remainder of Commissioner Tremaine Phillip's term, which ends in 2025. The appointment of Commissioner Carreon and continuity in leadership through the reappointment of Chair Scripps further reflect the constructive and stable nature of the Michigan regulatory environment, which remains one of the best jurisdictions in the country. We've connected with Commissioner Carreon and she has a strong background in decarbonization, in transportation electrification and is well suited for the role. We look forward to working with her and this commission.

轉向幻燈片 5。我想花點時間談談密歇根州的建設性監管環境。最近，州長重新任命斯克里普斯主席，任期至 2029 年，並任命亞歷山德拉·卡倫 (Alessandra Carreon) 填補特雷梅因·菲利普專員 (Tremaine Phillip) 的剩餘任期，任期至 2025 年。卡倫專員的任命以及斯克里普斯主席重新任命所帶來的領導連續性進一步反映了密歇根州監管環境的建設性和穩定性，它仍然是美國最好的司法管轄區之一。我們已經與卡倫專員取得了聯繫，她在脫碳、交通電氣化方面擁有深厚的背景，非常適合這個角色。我們期待與她和該委員會合作。

As for the regulatory calendar, our gas rate case settlement is one more in the streak of settlements and our second gas settlement in just over a year. I'm pleased with the outcome and the team's work. This is a clear demonstration of the constructive regulatory environment in Michigan and speaks to our ability to work with multiple parties to provide the best outcome for our customers and our investors. We expect rates to go into effect October 1, with the start of the new test year.

至於監管日曆，我們的天然氣費率案件和解是一系列和解中的又一個，也是我們在一年多的時間裡的第二次天然氣和解。我對結果和團隊的工作感到滿意。這清楚地展示了密歇根州的建設性監管環境，並證明了我們與多方合作為我們的客戶和投資者提供最佳結果的能力。我們預計費率將於 10 月 1 日生效，同時新的測試年開始。

In our electric rate case, we are awaiting staff's position by the end of August and a final order by March of next year. Within our filing, we are requesting approval for a small undergrounding pilot, roughly 10 miles and planned underground over 400 miles, annually. This is an area where we have a lot of opportunity to strengthen our system and improve reliability and resiliency while aligning with our Midwest peers.

在我們的電價案例中，我們正在等待工作人員在八月底之前就位，並在明年三月之前等待最終訂單。在我們的文件中，我們請求批准進行小型地下試點，每年大約 10 英里，計劃地下超過 400 英里。在這個領域，我們有很多機會加強我們的系統，提高可靠性和彈性，同時與中西部同行保持一致。

Solid energy legislation, strong regulatory construct and the evidence to support it, a top-tier regulatory jurisdiction.

堅實的能源立法、強有力的監管結構和支持它的證據，頂級的監管管轄區。

Moving on to the financials. For the second quarter, we reported adjusted earnings per share of $0.75. We had a strong quarter, driven by operational and financial performance and we continue to build contingency through the CE Way as we deliver on our year-end financial objectives. Today, we are reaffirming all our financial objectives, including our full year guidance of $3.06 to $3.12 per share with continued confidence toward the high end. We're also reaffirming our long-term adjusted earnings per share growth of 6% to 8% per year with continued confidence toward the high end and remain committed to annual dividend per share growth of 6% to 8%.

繼續討論財務狀況。第二季度，我們報告調整後每股收益為 0.75 美元。在運營和財務業績的推動下，我們的季度業績表現強勁，並且在實現年終財務目標的過程中，我們繼續通過 CE 方式建立應急措施。今天，我們重申我們的所有財務目標，包括每股 3.06 美元至 3.12 美元的全年指導，並對高端市場繼續充滿信心。我們還重申，我們對長期調整後每股收益每年增長 6% 至 8%，並對高端市場繼續充滿信心，並繼續致力於實現每年 6% 至 8% 的年度股息增長。

As I stated in our Q1 call, this is not our first rodeo. The team has done a remarkable job of mitigating the gap left from a warm winter and a large ice storm. Through the CE Way, operational cost measures, financings and other countermeasures, we have made great progress year-to-date. Year after year, we deliver and this year will be no different. This is not about winning one game or one season. It's about winning multiple seasons, a winning program, continuing the long track record of consistent growth and compounding off of actuals, bringing our investors a high-quality of earnings and doing it year after year.

正如我在第一季度電話會議中所說，這不是我們的第一次牛仔競技表演。該團隊在縮小暖冬和大冰暴造成的影響方面做得非常出色。通過CE方式、運營成本措施、融資和其他對策，我們今年迄今取得了很大進展。年復一年，我們交付成果，今年也不例外。這不是為了贏得一場比賽或一個賽季。這是關於贏得多個賽季，一個成功的計劃，繼續持續增長的長期記錄，並根據實際情況進行複利，為我們的投資者帶來高質量的收益，並年復一年地做到這一點。

Now I'll hand the call over to Rejji to provide some additional details and insights.

現在我將把電話轉交給 Rejji，以提供一些額外的細節和見解。

Thank you, Garrick and good morning, everyone. We had a strong second quarter delivering adjusted earnings of $0.75 per share driven by numerous cost reduction initiatives foreshadowed on our Q1 call, which I'll elaborate on shortly. Our financial performance over the past few months has materially offset the weather-driven challenges we faced in the first quarter. As such, as Garrick noted, we are reaffirming our guidance for the year. And on a year-to-date basis, we're on track with adjusted EPS of $1.45 per share, given the back-end weighted nature of our plan this year.

謝謝你，加里克，大家早上好。在我們第一季度電話會議上預示的眾多成本削減舉措的推動下，我們第二季度的調整後收益達到了每股 0.75 美元，我將很快對此進行詳細說明。我們過去幾個月的財務業績在很大程度上抵消了我們在第一季度面臨的天氣挑戰。因此，正如加里克指出的那樣，我們重申了今年的指導方針。考慮到我們今年計劃的後端加權性質，今年迄今為止，我們預計調整後每股收益將達到 1.45 美元。

As you can see in the waterfall chart on Slide 7, weather has been a significant headwind to our financial performance in the first half of this year, driving $0.37 per share of negative variance versus the comparable period in 2022. Rate relief net of investment-related expenses has resulted in $0.06 per share of positive variance versus the first half of 2022, driven by last year's constructive electric and gas rate case settlements. From a cost perspective, our financial performance in the first half of the year has been significantly impacted by higher operating maintenance, or O&M expenses, to the tune of $0.15 per share versus the comparable period in 2022, attributable to storm restoration costs in the first quarter.

正如您在幻燈片 7 的瀑布圖中看到的那樣，天氣對我們今年上半年的財務業績構成了重大阻力，與 2022 年可比期間相比，每股負方差為 0.37 美元。扣除投資後的利率減免-由於去年的建設性電力和天然氣費率案件和解，相關費用導致與 2022 年上半年相比每股出現 0.06 美元的正差異。從成本角度來看，我們上半年的財務業績受到較高的運營維護或 O&M 費用的顯著影響，與 2022 年同期相比，每股增加了 0.15 美元，歸因於上半年的風暴恢復成本四分之一。

However, it is worth noting that our operational O&M expenses, which represent the majority of our O&M expense and primarily excluding costs associated with our energy waste reduction programs and employee benefits have trended favorably during the second quarter and we are down roughly 10% versus the second quarter of 2022.

然而，值得注意的是，我們的運營運營和維護費用（佔運營和維護費用的大部分，主要不包括與我們的能源浪費減少計劃和員工福利相關的成本）在第二季度呈良好趨勢，與去年同期相比下降了約 10%。 2022 年第二季度。

So we're seeing the fruits of the numerous operational cost reduction initiatives we put in place earlier in the year, such as reducing our use of consultants and contractors, limiting hiring, accelerating longer-term IT cost reduction initiatives and eliminating other discretionary spending. And of course, leveraging the CE Way, our lean operating system. We anticipate that our strong cost performance will continue as we move through the second half of the year.

因此，我們看到了今年早些時候實施的眾多運營成本削減舉措的成果，例如減少顧問和承包商的使用、限制招聘、加速長期 IT 成本削減舉措以及消除其他可自由支配的支出。當然，還可以利用我們的精益操作系統 CE Way。我們預計，下半年我們將繼續保持強勁的性價比。

Rounding out the first 6 months of the year, you'll note the $0.18 per share positive variance versus the first half of 2022 highlighted in the catch-all bucket in the middle of the chart. The primary source of upside here was related to financing efficiencies and shortly capitalize on attractive conditions in the convertible bond market by pricing an $800 million issuance and using the majority of the proceeds to pre-fund future parent company financing needs. Usually, prefundings like this are subject to negative carry. However, given the current inverted yield curve, we've managed to reinvest the proceeds at deposit rates favorable to the underlying funding costs.

在今年的前 6 個月中，您會注意到與 2022 年上半年相比每股 0.18 美元的正差異在圖表中間的包羅萬象的桶中突出顯示。上漲的主要來源與融資效率有關，並很快利用可轉換債券市場的有吸引力的條件，發行了 8 億美元的債券，並將大部分收益用於為未來母公司的融資需求提供資金。通常，像這樣的預先融資會產生負利差。然而，鑑於目前收益率曲線倒掛，我們已設法以有利於基礎融資成本的存款利率將收益進行再投資。

Lastly, we used the balance of the proceeds from the Convert offering to tender a portion of select bonds well below par, which has delevered our balance sheet. All in, this opportunistic financing transaction was earnings accretive and has further strengthened our liquidity position.

最後，我們利用轉換發行的收益餘額來購買遠低於面值的部分精選債券，這降低了我們資產負債表的槓桿化程度。總而言之，這項機會主義融資交易增加了收益，並進一步增強了我們的流動性狀況。

Looking ahead, as always, we plan for normal weather, which equates to $0.06 per share of negative variance versus the comparable period in 2022. Due to the absence of strong sales of the electric utility driven by last year's warm summer, we anticipate that the estimated negative variance attributable to weather will be more than offset by rate relief, net of investment-related costs, which we have quantified at $0.08 per share versus the first half of 2022. Our estimates reflect the terms of our recently filed gas rate case settlement agreement, which is subject to commission approval and the residual benefits of our 2022 electric rate case settlement.

展望未來，我們一如既往地計劃應對正常天氣，這相當於與 2022 年可比期間相比每股 0.06 美元的負方差。由於去年溫暖的夏季推動電力公司銷售不強勁，我們預計預計天氣造成的負差異將被費率減免（扣除投資相關成本）所抵消，與 2022 年上半年相比，我們將其量化為每股 0.08 美元。我們的估計反映了我們最近提交的天然氣費率案件和解協議的條款協議，該協議須經委員會批准以及我們 2022 年電費案件和解的剩餘利益。

Closing out the glide path for the remainder of the year, as noted during our Q1 call, we anticipate lower overall O&M expense of the utility driven by the ongoing benefits of the aforementioned cost reduction initiatives. Some expected favorable year-over-year variance related to service restoration costs and the usual cost performance fueled by the CE Way, which collectively equates to $0.26 per share of positive variance versus the comparable period in 2022.

正如我們在第一季度電話會議中所指出的，我們預計公用事業公司的總體運營和維護費用將在上述成本削減舉措的持續效益的推動下下降，從而結束今年剩餘時間的下滑路徑。一些預期有利的同比差異與服務恢復成本和 CE Way 推動的通常成本績效有關，與 2022 年可比期間相比，這總計相當於每股 0.26 美元的正差異。

Lastly, as we discussed during our first quarter call, we're assuming modest growth at NorthStar and the benefits associated with the roughly $0.12 per share of pull-ahead exercised in the fourth quarter of 2022. As per our original guidance, all in, we estimate these items will drive $0.17 to $0.23 per share of positive variance versus the comparable period in 2022.

最後，正如我們在第一季度電話會議中討論的那樣，我們假設 NorthStar 適度增長，以及與 2022 年第四季度每股約 0.12 美元的提前執行相關的收益。根據我們最初的指導，總而言之，我們估計，與 2022 年可比期間相比，這些項目將帶來每股 0.17 美元至 0.23 美元的正方差。

In summary, we made great progress to offset the challenging weather experienced in the first quarter but needless to say, we'll continue to plan conservatively and execute as we always do.

總而言之，我們在抵消第一季度遇到的挑戰天氣方面取得了很大進展，但不用說，我們將繼續保守計劃並一如既往地執行。

Moving on to the balance sheet. On Slide 8, we highlight our recently reaffirmed credit ratings from Moody's. As you know, we continue to target mid-teens FFO-to-debt over our planning period. As always, we remain focused on maintaining a strong financial position which, coupled with a supportive regulatory construct and predictable operating cash flow growth, supports our solid investment-grade ratings to the benefit of customers and investors.

繼續看資產負債表。在幻燈片 8 上，我們重點介紹了穆迪最近重申的信用評級。如您所知，我們在規劃期間繼續以十幾歲左右的 FFO 債務為目標。一如既往，我們仍然致力於保持強勁的財務狀況，再加上支持性的監管結構和可預測的運營現金流增長，支持我們堅實的投資級評級，使客戶和投資者受益。

Moving on to the financing plan. Slide 9 offers more specificity on the balance of our planned funding needs in 2023, which are limited to debt issuances at the utility. This includes both first mortgage bond financings and a securitization financing to address the recovery of the undepreciated rate base at the recently retired Karn coal facilities.

繼續進行融資計劃。幻燈片 9 更具體地說明了我們 2023 年計劃融資需求的平衡，這些需求僅限於公用事業公司的債務發行。這包括首次抵押債券融資和證券化融資，以解決最近退役的卡恩煤炭設施未折舊利率基礎的恢復問題。

As for the parent company, given the timing of the convertible bond issuance, we've been able to delay the settlement of the equity forwards that priced last year. So the roughly $440 million of forward equity contracts will be settled commensurate with the needs of the business over time.

至於母公司，考慮到可轉換債券的發行時間，我們已經能夠推遲去年定價的股權遠期的結算。因此，大約 4.4 億美元的遠期股權合約將隨著時間的推移根據業務需求進行結算。

As I've said before, our approach to our financing plan is similar to how we run the business. We plan conservatively and capitalize on opportunities as they arise. This approach has been tried and true year in and year out and has enabled us to deliver on our operational and financial objectives, irrespective of the circumstances to the benefit of our customers and investors. And this year is no different.

正如我之前所說，我們的融資計劃方法與我們經營業務的方法類似。我們採取保守的計劃，並在機會出現時加以利用。這種方法經過了年復一年的考驗，使我們能夠在任何情況下實現我們的運營和財務目標，為我們的客戶和投資者帶來利益。今年也不例外。

And with that, I'll hand it back to Garrick for his final remarks before the Q&A session.

接下來，我將把它交還給加里克，讓他在問答環節之前做最後的發言。

Thank you, Rejji. Our track record spans 2 decades and consistently delivers industry-leading results in any conditions. This is what we do. We deliver for all stakeholders, year in and year out. And this year will be no different.

謝謝你，雷吉。我們的業績記錄跨越了 20 年，在任何條件下始終如一地提供行業領先的結果。這就是我們所做的。我們年復一年地為所有利益相關者提供服務。今年也不例外。

With that, Michelle, please open the lines for Q&A.

那麼，米歇爾，請打開問答線路。

(Operator Instructions) Your first question will come from Jeremy Tonet of JPMorgan.

（操作員說明）您的第一個問題將來自摩根大通的 Jeremy Tonet。

Maybe just want to start off with the undergrounding pilot, if you could and just wondering if you could expand a bit more, I guess, on what would define success there? Or I guess, future outlook for how quickly that could fold into the plan in larger size over time?

也許只是想從地下試點開始，如果可以的話，只是想知道是否可以進一步擴展，我猜，什麼可以定義那裡的成功？或者我猜，隨著時間的推移，未來的前景會以多快的速度融入到更大的計劃中？

So I've got a interesting story this year. I mean, I was out with our crews here, this is about 2 weeks ago and we had been undergrounding in a -- replacing undergrounding in a subdivision area. So remember, in Michigan, subdivisions are underground, a lot of people request their service underground. And so we know how to do this work. And in fact, we have a large gas business that does a lot of undergrounding and so we're sharing practices back and forth. And so again, -- right now, we're starting out with a pilot. And that's just a nice way to step into this with the Public Service Commission to show them our capabilities and being able to deliver that at a low cost for our customers.

所以今年我有一個有趣的故事。我的意思是，我和我們的工作人員在這裡，這是大約兩週前，我們一直在地下——取代在細分區域的地下。所以請記住，在密歇根州，分區位於地下，很多人要求在地下提供服務。所以我們知道如何開展這項工作。事實上，我們有一家大型天然氣企業，進行了大量的地下工程，因此我們正在來回分享實踐。再說一次，現在，我們正在從試點開始。這是與公共服務委員會合作的好方法，向他們展示我們的能力，並能夠以低成本為我們的客戶提供服務。

Again, as I've shared in past calls, the cost for undergrounding in Michigan, given the soil, given where we intend to put the undergrounding, it's really conducive. It's really almost at parity with aboveground construction. So it makes it really affordable for our customers. And so we intend to use that practice. It's recognized through EPRI as a best practice, not everywhere but strategically or selectively across our system. And so starts with 10 miles. We got 6 counties identified. We got a project starting up in one of the north of Grand Rapids area here in about 2 weeks. The Public Service Commission will be on that site as well to watch that, observe that. And what we intend to grow that is to about 400 miles annually. As I've shared in the past, about 15% -- 10% to 15% of our system is undergrounded, other Midwest peers around 35% to 40%. And so again, it's a best practice and we see this as a way to improve reliability and resiliency for the future.

再次，正如我在過去的電話會議中分享的那樣，考慮到土壤，考慮到我們打算放置地下的地方，密歇根州的地下工程成本確實是有利的。它實際上幾乎與地上建築持平。因此，這使得我們的客戶真正負擔得起。因此我們打算採用這種做法。它被 EPRI 認可為最佳實踐，雖然不是在所有地方，但在我們的系統中具有戰略性或選擇性。所以從 10 英里開始。我們確定了 6 個縣。我們在大急流城北部地區之一啟動了一個項目，大約兩週後。公共服務委員會也將在該網站上進行觀察、觀察。我們打算將其增長到每年約 400 英里。正如我過去所分享的，我們系統的大約 15% - 10% 到 15% 位於地下，其他中西部同行的比例約為 35% 到 40%。再說一遍，這是一種最佳實踐，我們認為這是提高未來可靠性和彈性的一種方法。

Got it. That's helpful. And storms has been topical in Michigan, obviously, in recent time here. I'm just wondering if you could provide a bit more color, I guess, on your efforts -- hardening efforts in where you stay and where you want to be to improve resiliency there and just kind of how you feel local stakeholders are aligned against those -- against this outlook in the state?

知道了。這很有幫助。顯然，最近一段時間，風暴一直是密歇根州的熱門話題。我只是想知道你是否可以為你的努力提供更多的色彩——在你居住的地方和你想去的地方加強努力，以提高那裡的彈性，以及你認為當地利益相關者如何與他們保持一致那些——反對該州的這種觀點？

As I shared in the Q1 call, our focus on, clearly on reliability and resiliency coming off the large ice storm. We're making a lot of investments, considerable investments across the electric system. And we've seen good performance here over the course of the summer. Even just the last night, we had 65-mile winds come through and the system performed well. We've got 20,000 customers out this morning and we're quickly restoring them. And so the investments we are making -- it's a large system but the investments we are making are certainly showing benefit.

正如我在第一季度電話會議中分享的那樣，我們的重點顯然是應對大冰暴的可靠性和彈性。我們正在進行大量投資，在整個電力系統中進行大量投資。整個夏天我們都看到了這裡的良好表現。即使就在昨晚，我們也經歷了 65 英里的風，而且系統運行良好。今天早上我們有 20,000 名顧客離開，我們正在迅速恢復他們。因此，我們正在進行的投資——這是一個龐大的系統，但我們正在進行的投資肯定會帶來好處。

So we've got a great plan. We're filing that plan here in September with a 5-year -- with our 5-year infrastructure plan. This audit that's underway that we'll start here in September will be another point of alignment for the right investments across the electric system to improve reliability and resiliency. So those things are going well and our system is performing well. And so I feel good about our performance this summer, we'll continue to be focused on it.

所以我們有一個偉大的計劃。我們將於 9 月份在這裡提交該計劃，其中包括我們的 5 年基礎設施計劃。我們將於 9 月份開始進行的這項審計將成為整個電力系統正確投資的另一個協調點，以提高可靠性和彈性。所以這些事情進展順利，我們的系統運行良好。所以我對我們今年夏天的表現感到滿意，我們將繼續關注它。

Your next question comes from Julien Dumoulin-Smith at Bank of America.

您的下一個問題來自美國銀行的 Julien Dumoulin-Smith。

This is Heidi Hauch, on for Julien. Just first question, noting your plans to file another IRP in the next year or 2, do you see any read-throughs for your next IRP related, the latest peer IRP settlement approved by the Michigan PSC, either from the coal retirement front, renewables' investments or otherwise?

我是海蒂·豪奇 (Heidi Hauch)，替朱利安 (Julien) 發言。只是第一個問題，注意到您計劃在明年或兩年內提交另一個 IRP，您是否看到任何與您的下一個 IRP 相關的通讀，即密歇根州 PSC 批准的最新同行 IRP 解決方案，無論是來自煤炭退休方面，還是可再生能源' 投資還是其他？

Well, first, I want to congratulate that [Pierre] utility that had an IRP settled this week. So congratulations to the DTE team. A lot goes into those IRPs. And if you take one thing away from that IRP, it just speaks to the constructive environment here in Michigan, 4 settlements for us, a settlement in IRP for DTE, that's really good. So we'll obviously look at their IRP and look at what we want to take into our next IRP. The other things that we'll consider, the Inflation Reduction Act has certainly changed, PTCs and ITCs and is shaping the industry investment. Infrastructure and Jobs Act has also shaped some things in our industry. And so all that will go into our next IRP and into some of our thinking.

好吧，首先，我要祝賀 [Pierre] 公用事業公司本週解決了 IRP。祝賀 DTE 團隊。這些 IRP 涉及很多內容。如果你從 IRP 中去掉一件事，它就說明了密歇根這裡的建設性環境，我們有 4 個和解，DTE 在 IRP 中有一個和解，這真的很好。因此，我們顯然會查看他們的 IRP，並查看我們想要將哪些內容納入下一個 IRP。我們要考慮的其他事情是，《通貨膨脹削減法案》、PTC 和 ITC 確實發生了變化，並且正在影響行業投資。基礎設施和就業法案也塑造了我們行業的一些東西。因此，所有這些都將進入我們的下一個 IRP 和我們的一些思考中。

The IRP process takes about 12 to 18 months to build really a thoughtful and thorough plan that we'd submit to the commission. I anticipate we'll start that process in 2024, building out that. So we play it out. That means we file maybe late 2025, 2026 time frame. And so there's still some work to define that and tie that down. But that's our early indications of how we think about our next IRP.

IRP 流程需要大約 12 到 18 個月的時間來製定一個真正深思熟慮且徹底的計劃，並將其提交給委員會。我預計我們將在 2024 年開始這一流程，並以此為基礎。所以我們就玩一下。這意味著我們可能會在 2025 年末、2026 年的時間範圍內提交文件。因此，仍然需要一些工作來定義它並加以約束。但這是我們如何考慮下一個 IRP 的早期跡象。

Great. And then second question from me, can you comment on the latest MPSC investigation into the natural gas meters and new service delays? How are you planning to address or improve these issues? And are there any potential capital opportunities that may result from this investigation?

偉大的。我的第二個問題是，您能否評論一下 MPSC 對天然氣表和新服務延遲的最新調查？您打算如何解決或改善這些問題？此次調查是否會帶來潛在的資本機會？

Thank you for your question. It probably goes without saying this but I'll say it anyways, we take every MPSC inquiry seriously. And from a customer perspective and bills, we've got to get that right. But maybe a little background here, Heidi, our meters communicate wirelessly. That's our smart grid, it's all wireless. And obviously, there's a wireless carrier that communicates that signal back to our home offices here. And as you might imagine, those wireless carriers are moving from 3G to 5G. So they're shutting down some of the 3G systems, moving to 5G. And they made us aware of that and we were working with our meter vendor to upgrade those meters so they have the right communication components to operate at 4G and 5G technology. That process too is underway. However, the meter vendor ran into supply chain problems in part due to the pandemic, where they couldn't get the components for the meter.

謝謝你的問題。這可能是不言而喻的，但無論如何我還是要說，我們認真對待每一個 MPSC 詢問。從客戶和賬單的角度來看，我們必須做到這一點。但也許這裡有一點背景知識，海蒂，我們的儀表是無線通信的。這就是我們的智能電網，全部都是無線的。顯然，有一家無線運營商可以將該信號傳回我們這裡的家庭辦公室。正如您可能想像的那樣，這些無線運營商正在從 3G 轉向 5G。因此他們正在關閉一些 3G 系統，轉向 5G。他們讓我們意識到了這一點，我們正在與我們的電錶供應商合作升級這些電錶，以便他們擁有正確的通信組件來在 4G 和 5G 技術下運行。這個過程也正在進行中。然而，電錶供應商遇到了供應鏈問題，部分原因是疫情，他們無法獲得電錶的組件。

That delayed our deployment of these meters. And so when we walked in, in January of 2023, we had about 190,000 meters that we're no longer communicating. Today, that's around 33,000 and we continue to work with our meter vendor to close that and we expect that to be closed by August. As you imagine, when those meters are not communicating, it creates the potential for estimated reads. Our meter vendor was supposed to go out and read meters for us to close that gap. They did not meet our expectations around that and we had to step in and close that gap, which we've done. And our reads are being completed and any consecutive estimates are now within historical parameters.

這延遲了我們對這些儀表的部署。因此，當我們在 2023 年 1 月走進時，我們有大約 190,000 米不再通信。如今，該數量約為 33,000 個，我們將繼續與電錶供應商合作以關閉該數量，我們預計將在 8 月份之前關閉。正如您想像的那樣，當這些儀表不進行通信時，就會產生估計讀數的可能性。我們的電錶供應商應該出去為我們抄表，以縮小這一差距。他們沒有達到我們的期望，我們必須介入並縮小這一差距，我們已經做到了。我們的讀數正在完成，任何連續的估計現在都在歷史參數之內。

And so from a meter perspective, from a consecutive estimate perspective, those are resolved or will be resolved in August. We will report to the commission on August 4 and so we'll do that. From a materiality perspective, it's -- we've factored that in both the reading of the meters and any penalties we may see from the Public Service Commission. And they're incorporated within our guidance that we've offered. I do not see a capital opportunity here. But rest assured that from a customer perspective and MPSC perspective, we are running this to ground. We're doing a root cause on it and make sure that it will not happen again for our customers.

因此，從儀表的角度來看，從連續估計的角度來看，這些問題都已解決或將在 8 月份解決。我們將於 8 月 4 日向委員會報告，所以我們會這樣做。從重要性的角度來看，我們已經在抄表和公共服務委員會可能看到的任何處罰中考慮到了這一點。它們已納入我們提供的指導中。我在這裡看不到資本機會。但請放心，從客戶的角度和 MPSC 的角度來看，我們正在落實這一點。我們正在從根本上解決這個問題，並確保我們的客戶不會再發生這種情況。

Thanks for your question, Heidi.

謝謝你的提問，海蒂。

Your next question comes from Michael Sullivan at Wolfe Research.

您的下一個問題來自沃爾夫研究中心的邁克爾·沙利文。

Maybe this one is for Rejji. Just wanted to ask on the delay in the draw on the forward equity and just how we should think about timing there? Whether that ends up getting needed at all? I think my recollection is outside of that, you had no other needs until 2025. But yes, maybe just a little more color on what the equity picture looks like going forward now that you've done the Convert?

也許這個是給 Rejji 的。只是想問一下遠期資產提取的延遲以及我們應該如何考慮那裡的時間安排？這最終是否會被需要？我想我的記憶除此之外，在 2025 年之前您沒有其他需求。但是，是的，也許您已經完成了轉換，也許只是對未來的股權圖景有更多的了解？

Yes, Mike, thanks for the question. Yes, we will still plan to settle the equity. It will likely be, I'll say the back half of this year and deep into the second half, so call it, late Q3 or in Q4. But we do still plan to settle the equity over the course of this year.

是的，邁克，謝謝你的提問。是的，我們還是會計劃進行股權結算。我會說，這很可能是在今年下半年，直到下半年，所以可以稱之為第三季度末或第四季度。但我們仍計劃在今年內結算股權。

Okay. Great. And just in terms of the impact on metrics and FFO, the debt from the Convert issuance and the tender and delay in equity, does that kind of move you at all up or down within your mid-teens target?

好的。偉大的。就對指標和 FFO 的影響、Convert 發行的債務以及股權招標和延遲而言，這是否會讓您在 10 左右的目標範圍內上下波動？

No. The convert transaction was for all intents and purposes, when you take into account all of the puts and takes, it's effectively credit neutral, maybe modestly accretive. And then the delay of the equity settle, again, it's still going to take place over the course of this year. So again, all credit neutral. And so we'll still be right in that mid-teens area and well in alignment with the expectations of the credit rating agencies so we can maintain our investment-grade ratings.

不。轉換交易是出於所有意圖和目的，當您考慮到所有看跌期權和看跌期權時，它實際上是信用中性的，也許是適度增值的。然後股權結算的延遲，今年仍然會發生。再說一遍，所有信用中立。因此，我們仍將處於十幾歲左右的區域，並且與信用評級機構的預期非常一致，因此我們可以維持我們的投資級評級。

There are no further questions from the phone line. So I will turn the conference back to Garrick Rochow for any closing remarks.

電話線上沒有進一步的問題。因此，我將把會議轉回加里克·羅肖（Garrick Rochow）發表閉幕詞。

Thanks, Michelle. I'd like to thank you for joining us today. We'll see you on the road, too. Take care and stay safe.

謝謝，米歇爾。我要感謝您今天加入我們。我們也會在路上見到你。小心並保持安全。

Ladies and gentlemen, this does conclude your conference call for this morning. We would like to thank you all for participating and ask you to please disconnect your lines.

女士們先生們，今天早上的電話會議到此結束。我們衷心感謝大家的參與，並請您斷開線路。