道明尼資源 (D) 2010 Q4 法說會逐字稿

Good morning and welcome to Dominion's fourth-quarter earnings conference call.

On the call today we have Tom Farrell, CEO, and other members of senior management.

Please be aware that each of your lines is in a listen-only mode.

At the conclusion of the presentation we will open the floor for questions.

At that time instructions will be given as to the procedure to follow if you would like to ask a question.

I would now like to turn the conference over to Tom Hamlin, Vice President of Investor Relations, for Safe Harbor statement.

Thank you.

Good morning and welcome to Dominion's 2010 year-end earnings conference call.

During this call we will refer to certain schedules included in this morning's earnings release and pages from our earnings release kit.

The 2011 guidance kit will be posted on our website later today.

Schedules in the earnings release and earnings guidance kits are intended to answer the more detailed questions pertaining to operating statistics and accounting.

Investor Relations will be available after the call for any clarifications of these schedules.

If you have not done so, I encourage you to visit our website, register for e-mail alerts, and view our fourth-quarter and full-year 2010 earnings documents.

Our website address is www.dom.com/investors.

In addition to the earnings release kit we have included a slide presentation on our website that will guide this morning's discussion.

And now for the usual cautionary language.

The earnings release and other matters that will be discussed on the call today may contain forward-looking statements and estimates that are subject to various risks and uncertainties.

Please refer to our SEC filings, including our most recent annual report on Form 10-K and our quarterly report on Form 10-Q, for a discussion of factors that may cause results to differ from management's projections, forecasts, estimates, and expectations.

Also on this call, we will discuss some measures of our company's performance that differ from recognized by GAAP.

Those measures include our fourth-quarter and full-year operating earnings and our operating earnings guidance for the first quarter and full year 2011 as well as operating earnings before interest and tax, commonly referred to as EBIT.

Reconciliation of such measures to the most directly comparable GAAP financial measures we are able to calculate and report are contained in our earnings release kit.

Joining us on the call this morning are our CEO, Tom Farrell; our CFO, Mark McGettrick; and other members of our management team.

Tom will begin with a review of our operating and regulatory activities in 2010 and the outlook for 2011 and beyond.

Mark will discuss the earnings results for the fourth quarter and full year 2010 as well as our outlook for the first quarter, the full year 2011, and earnings growth beyond 2011.

He will also discuss our financing plans and we will then take your questions.

I will now turn the call over to our Chairman and Chief Executive Officer, Tom Farrell.

Good morning, everyone, and thank you for joining us.

While we typically do not discuss issues related to M&A, I want to make a couple of comments given market rumors regarding Dominion's interest in merging with or acquiring other utilities.

As anyone familiar with our company knows, Dominion has a very strong organic growth plan.

We are investing over $2 billion a year in growth projects across all of our regulated lines of business.

Achieving our 5% to 6% earnings growth target does not depend on our ability to make acquisitions.

If we were to consider an M&A transaction, it would have to be a unique opportunity that would not weaken our financial condition and would be accretive to earnings per share and shareholder value.

Now turning to 2010.

2010 was an extraordinary year for Dominion.

We made significant progress on our strategic plan and demonstrated how our infrastructure growth plan will continue for at least the next five years.

Our Board of Directors adopted a new dividend policy that raises our targeted payout ratio to be more in line with our more regulated peers.

Last month the Board authorized a 7.7% increase in the dividend to an annual rate of $1.97 per share.

Also, our total shareholder return for the year was strong.

We began the year with a comprehensive settlement agreement for Virginia power that maintains current base rates through at least 2013 and enables the Company to earn competitive rates of return that support our infrastructure growth programs.

This was the first base rate case for the Company under Virginia's new regulatory structure.

We have since joined other parties in submitting a proposal to the commission which calls for the terms of the settlement to be extended for an additional year through a deferral of the first biannual review until 2012.

This so-called staggering of the biannual review process was provided for in the 2007 re-regulation law.

If approved by the commission, the first biannual review will cover results for 2010 and 2011 and no change in base rates could occur before December 2014.

The return on equity will continue to be 11.9% with a 50 basis point collar and the return on equity for the rate riders for the Virginia City and Bear Garden generating plants will continue to be 12.3% for at least an additional year.

While we are on the subject of regulation, during 2000 we also secured our first base rate increase in North Carolina since 1993.

A settlement agreement in that proceeding will increase annual non-fuel-based revenues by $7.7 million and allow for a significantly greater percentage of future purchase power expenses to be recovered through the fuel costs rather than base rates.

We also advanced our strategic plan in March when we sold our Appalachian E&P business to CONSOL for $3.475 billion.

This transaction enabled us to capture the value of our acreage in the Marcellus formation and significantly reduced our commodity price exposure.

We used the proceeds from the sale to offset our equity needs, invest in our pension plan, reduced debt, and buy back common stock.

One of the reasons for the sale was to focus our investment capital toward developing the new infrastructure that will be necessary for the Marcellus region to develop.

Since closing on the sale we have announced four new Marcellus-related growth projects.

New projects such as the Marcellus 404 and the Northeast Expansion continue to move forward and are expected to contribute to earnings growth over the next five years.

You can expect announcements of additional projects as the buildout of the Marcellus region continues.

Growth in our natural gas businesses is not just about the Marcellus development.

Our Appalachian Gateway and Gathering Expansion projects represent about $900 million of new infrastructure that will come into service over the next two years.

We are also pursuing an acceleration of the bare steel pipe replacement program at Dominion East Ohio.

Finally, during the fourth quarter we reached an agreement with our customer in the Cove Point expansion to shorten our contracts from 18 years to 10, which positions us to explore options to develop liquefaction capabilities at the site.

Our potential interest in such a facility would be limited to the infrastructure and not the commodity.

The construction of a new electric generating capacity in Virginia is a key component of our strategic plan.

Virginia continues to be the second-largest importer of power in the country.

The latest load forecast from PJM supports the need for at least 4,500 MW of new capacity over just the next 10 years.

Also during the year, we made significant progress on the construction of two new power stations -- Bear Garden and the Virginia City Hybrid Energy Center.

Bear Garden is expected to be in service during the second quarter of this year and Virginia City is expected to be in service during the summer of 2012.

The next phase of our generation expansion plan also came into focus during 2010.

We are proceeding with development of a power station in Warren County, Virginia, with about 1,300 MW of generating capacity.

This natural gas power plant will utilize three-on-one combined cycle technology and will be one of the most efficient gas powered units in the country.

We received the final air permit for the project in December and will file for a CPCN and rate rider for Warren County with the State Corporation Commission early next quarter.

As part of the air permit process, we reached an agreement with the National Park Service to close our North Branch power station, the small 74 MW coal plant located in West Virginia.

Our two major electric transmission projects, the Meadowbrook to Loudon and Carson to Suffolk lines are also nearing completion.

At May 7 analyst meeting we outlined our next major transmission project, the Mount Storm to Doubs line.

That project received approval from PJM in December.

The West Virginia commission has already ruled that no filings are required to reconductor the line.

We will begin road and tower foundation work in West Virginia this spring.

Last week we filed for approval for the Virginia State Corporation Commission to reconductor the Virginia portion of the line.

Mount Storm to Doubs is the next step in what will be a multi-year debt upgrade of the 500 Kv transmission loop that forms the backbone of our region's electric transmission system.

We also continue to optimize the value of our merchant generating portfolio.

During 2010 we installed a new economizer at Brayton Point Unit 3, which will improve the reliability and efficiency of that unit.

We also reached an agreement to sell the development rights to Phase IV of the Fowler Ridge wind facility to BP and are in the process of divesting our interest in the Morgantown Energy Center.

2010 was an exceptional year for our operating performance as well.

We experienced a record snowfall early in the year and one of the hottest summers on record.

Despite these challenges, we continued to improve our safety performance and service reliability, even with a midyear voluntary separation program which reduced our workforce by 7%.

All three operating business units reported their best safety performance in their history, an achievement for which we are proud but not satisfied.

2010 marks the seventh year in a row where generations nuclear fleet capacity factor exceeded 90%.

Our nuclear upgrade projects added more than 85 MW to our summer capability.

Fossil & Hydro's combined fleet achieved a near-record equivalent forced outage rate of 3.9% during 2010.

Virginia Power fossil fleet did achieve a new record at 2.9%.

Our Electric Transmission and Distribution group improved its three-year rolling average reliability measure by 3% in 2010 compared to 2009 and a 12% improvement over 2006.

We made significant improvements in our responsiveness to customer inquiries as well.

Dominion East Ohio replaced over 250,000 meters under the AMR rider program last year.

It also invested over $108 million to replace bare steel pipeline under the PIR rider program.

In conclusion, I believe that from both a strategic and operational point of view 2010 was an outstanding year for Dominion.

I will now turn the call over to Mark for a review of our financial results.

Thank you, Tom.

Let me begin with consolidated 2010 results.

Earnings in 2010 were very strong.

Operating earnings were $3.34 per share in the upper half of our original guidance range of $3.20 to $3.40 per share and 2% above operating earnings for 2009.

Favorable weather and higher rate adjustment clause revenues were the principal positive factors influencing earnings.

Interest expense were also lower than expected as strong cash flow reduced our need for external debt financing.

Partially offsetting these factors were lower margins from our merchant generation fleet and the absence of earnings from our previously owned Appalachian E&P business.

We produced operating earnings in the fourth quarter of $0.63 per share, level with last year's fourth quarter and near the midpoint of our guidance range.

GAAP earnings were $0.43 per share for the fourth quarter and $4.68 per share for the year.

The principal differences between GAAP and operating earnings for the year was a gain on the sale of our Appalachian E&P operations, the cost of the workforce reduction program, a charge related to the discontinued operations at Peoples Gas, and impairment charges on certain merchant generation assets.

A summary and a reconciliation of GAAP to operating earnings can be found on schedules 2 and 3 of the earnings release kit.

Now moving to results by operating segment.

At Dominion Virginia Power, EBIT for 2010 was $891 million, near the midpoint of our original guidance range of $866 million to $930 million.

The benefits of favorable weather in our [regulated ELOC] service territory were largely offset by major storm and service restoration costs and other investments to improve reliability.

EBIT for Dominion Energy was $862 million compared to our original guidance range of $852 million to $894 million.

Lower fuel costs for Dominion gas transmission were partially offset by a lower contribution from producer services.

Dominion Generation produced EBIT of $2.3 billion for 2010, above the high end of our original guidance range.

Favorable weather in our regulated electric service area more than offset costs from investments made to improve reliability.

Overall, we are very pleased with all of our operating segment results.

We have prepared a number of supplemental schedules that can be found on our website following the conclusion of our earnings call.

These supplemental schedules show quarterly and annual EBIT for the legal entity Virginia Power, which includes utility generation, electric transmission, and distribution operations, as well as quarterly and annual EBIT for our regulated gas businesses, merchant generation, and Dominion Retail.

Moving to cash flow and treasury activities.

The Company generated very strong cash flow last year because of both good results from operations and from divestiture activities, enabling us to fund our CapEx program, invest in our pension plan, reduce debt, and repurchase common stock.

Liquidity at the end of the year was $2 billion.

Our liquidity needs declined significantly when we sold our E&P business.

You may recall that in September we replaced and resized our credit commitments down to $3.5 billion.

We are very comfortable with this new capacity level given our current and potential liquidity requirements.

For statements of cash flow and liquidity, please see pages 16 and 43 of the earnings release kit.

We can't talk about financing plans for the next few years without first discussing the impact of the bonus depreciation provision and the recent tax bills enacted by Congress.

Many of the capital projects we have underway qualify for bonus depreciation, although there are still ambiguity as to whether some projects qualify for 50% or 100% depreciation.

Our best estimate at this time is that the cash benefit will be between $1.6 billion and $2.5 billion through 2013.

We have already used a portion of the cash benefit to make a contribution to the Dominion pension plan and will use future benefits to buy back common stock and avoid debt that otherwise would have been issued over the next three years.

As you know, there is a negative side to bonus depreciation.

The deferred taxes that are created as a result of this accelerated depreciation will reduce our rate base and it will reduce or eliminate the 199 or manufacturing tax deduction.

The share repurchases and earnings benefit of the pension contribution should offset all the negative impacts for 2011 and most of the expected impact for 2012 and beyond.

Now moving to our financing plan for this year, recall our previous plan, which was developed prior to the extension of bonus depreciation, does not include any equity in 2011.

With the benefits of bonus depreciation we now plan to repurchase $400 million to $700 million of equity this year.

On the debt side, we plan to issue between $2.2 billion and $2.7 billion of debt this year, including the funding of about $500 million in maturities.

While the financing plan for 2012 is far from complete at this early date, we have determined that we do not need to have a market issue of common stock in 2012 and will determine at a later date whether to issue new shares or use market purchases to satisfy the dividend reinvestment and other planned requirements.

We have already used $400 million of bonus appreciation tax savings to make a contribution to our pension plans.

Dominion's pension plans have been very well funded for quite some time and its funding levels rank among the strongest, not only in the industry but the entire Fortune 500.

With this latest contribution, Dominion pension plans have a funded ratio of 116% on a combined basis.

Now to full-year and first-quarter 2011 earnings guidance.

Our guidance range for operating earnings for the full year 2011 remains at $3 to $3.30 per share.

More details regarding our 2011 guidance can be found in the guidance kit that will be available on our website later today.

The principal negative driver to 2011 earnings compared to 2010 is lower realized margins from our merchant fleet due to lower commodity prices and higher planned outage expenses.

Other negative factors include a return to normal weather in our regulated service territory and a higher effective tax rate due to the decrease or elimination of the manufacturing deduction.

Factors somewhat offsetting these negatives include higher electric sales growth commensurate with the recovering economy, higher revenues from our various rider projects, and lower utility outage costs.

We have been saying for some time that 2011 represents the year in which our commodity-sensitive earnings bottom out.

We still expect to achieve the previously forecasted 5% to 6% growth in earnings per share beginning in 2012.

Dominion expects first-quarter 2011 operating earnings in a range of $0.85 to $0.95 per share, compared to operating earnings of $0.96 per share in the first quarter of 2010.

Positive factors for the first quarter of 2011 compared to the prior year include higher rider revenues and lower storm restoration expenses.

Factors offsetting these positives include a return to normal weather, lower merchant generation margins, the absence of earnings from our E&P business, and higher interest expenses.

GAAP earnings for the first quarter of 2010 were $0.29 per share.

For a reconciliation of operating earnings to GAAP, please refer to our GAAP reconciliation schedules contained in our earnings release kit.

As to hedging, we have added to our hedge positions at Millstone increasing coverage of expected output to 70% for 2012.

At our New England coal units our hedged position was unchanged from the prior quarter.

We also increased our hedge position at State Line to 77% for 2011 and 76% for 2012.

Our consolidated sensitivity in 2011 to a $5 change in New England power prices is now approximately $0.02 per share.

Our sensitivity for 2012 is now only $0.05 per share.

In addition, we have nearly reached our maximum hedge position for frac spreads each year through 2013 at levels that support our growth projections.

The update of our hedge positions can be found on page 32 of our earnings release kit.

Our hedge positions, coupled with current forward prices, and our regulated growth plan support our 5% to 6% earnings growth rate beginning in 2012.

So let me summarize my financial review.

First, we have achieved all of our important operational, strategic, and financial goals in 2010.

Second, our 2011 operating earnings guidance range remains unchanged at $3 to $3.30 per share.

Third, we expect that the cash impact of bonus depreciation will eliminate our need for market issuance of common stock for the next two years.

Fourth, we intend to mitigate the EPS impact of bonus depreciation through share repurchases and reduced debt issuances.

Finally, we have secured hedges on our merchant fleet which support our earnings guidance and growth targets.

We believe that our regulated growth plan, coupled with an expected total dividend increase of nearly 15% over the next two years, position us to provide strong returns for our shareholders.

Thank you.

We are now ready for your questions.

(Operator Instructions) Daniel Eggers, Credit Suisse.

Good morning, guys.

Just on the bonus depreciation number, it's an awfully wide range.

I guess if you could -- and I know there is still some uncertainty in their roles, but could you just help us think about the impact to some of the rate base growth numbers that you guys would have projected as far as if you were to block that out where you see the bonus depreciation, which projects or which businesses are going to be most impacted?

Benefited, I guess, is probably a better way of saying that.

No, I think that is fair, Dan.

This is Mark.

When we get the final clarification on this we are going to go ahead and by business segment show everybody the exact impact.

But as a general rule -- and the reason for the wide range for us is that, as you know, we have several very large projects, the biggest of which is the Virginia City Hybrid Energy Center, which is -- next year that is $1.8 billion.

Bear Garden, our gas facility, closes this year; over $600 million.

Brayton Point's cooling towers will come in this year and next.

So depending if they get 50% or 100% bonus depreciation that is the reason for the wide range.

I would say that the main drivers in terms of the businesses that would see rate base growth are really based on the riders in Virginia for [B check] and for Bear Garden, as well as for the two large transmission projects.

We are very comfortable with the bottom of the range at the $1.6 level billion.

I think the question will be, based on the final rules which should be available in the next several months, will that number approach the top of the range or will it stay at the $1.6 billion.

Paul Patterson, Glenrock Associates.

Good morning.

Just wanted to touch base with you on the impairment for the generation assets, what specifically caused that to $32 million?

I am sorry if I missed it in the release.

I went through it, but I didn't --.

No problem, Paul.

There were two issues there.

Earlier this year we impaired State Line based on the 1-hour SO2 rule and we had a small true-up to that impairment of about $15 million.

The other impairment, it's a small impairment we made to Salem based on analysis we did on future cash flows, and so that plant was impaired by about $19 million.

Paul Fremont, Jefferies.

Thanks.

First question would be it looks like the processing levels from midstream are going to be [180] to [190] in 2012.

Given the sizable expansion that is taking place, when would we begin to see material increases in that number and how much -- what would be the level of processing capacity that you would ultimately go to in 2013 and 2014?

Paul, I am going to let Gary Sypolt answer that question, who runs our energy business.

Really, it's driven by how quickly wells having high BTU are drilled, and we are seeing drilling occurring and success occurring with that the expectation of additional liquids coming.

Now we have announced the project at the Marcellus 404 which would be able to handle about 300 million a day, and fractionation of about 32,000 barrels a day.

We think that timeframe is probably 2014 to 2015 to get that -- more like 2014, I think, to get that into service.

So with that we would, hopefully, see the increase in volume that you see.

The numbers that you mentioned for 2012 is pretty much on target with where we would expect that to be.

Jonathan Arnold, Deutsche Bank.

Good morning, guys.

I have had a couple of questions; the first was can you give us any color -- in the hedging you did at Millstone was that sort of around-the-clock type product or was it more peak or off-peak?

Can you give us any insight there?

Jonathan, that was around-the-clock.

Okay, thank you.

And on the -- Mark, any color on sort of how you are approaching your open coal position given what is going on in the market?

I remember last time coal prices ran you were pretty confident you would be able to transact at prices lower than what we see on the screen, so just interested in any color you have this time.

Yes, as you can see from the hedge schedules, we haven't made any progress on our coal facilities in the Northeast for 2012.

We are still unhedged, and I know, Jonathan, you follow the coal markets closely.

They have honestly had, at least a temporary, run-off based on summer challenges in Australia and South America on international coal, which has also driven up Central App prices higher than what we believe are sustainable.

So we are going to be cautious on hedging our New England coal plants until we see some correction on coal.

It's no surprise that the dark spreads are very small in those units right now, based on elevated coal prices and depressed power prices, so we are going to be careful going in.

We did hedge a significant amount at Millstone over last quarter.

We really liked the prices there on the power that ran up; there was some pressure based on basis that helped the power spreads.

But on coal we are going to be cautious, and we still believe that coal prices, as we move through this year, in Central App will normalize down to a normal level.

Hugh Wynne, Sanford Bernstein.

My questions are around the merchant business.

I see that in the fourth quarter for the first time in many quarters the merchant generation margin was stable.

And you are mentioning, however, that it's likely to be a drag on earnings in 2011.

So I was hoping you might give some color about the extent of that drag and perhaps, most importantly, when do you think the earnings of that segment will bottom out?

We think here, as we said, that 2011/2012 is the bottoming period of that.

If you look at an EBIT basis from 2010 to 2011, we expect our merchant generation business to still drag year-over-year based on the open positions and previous hedge positions.

You will see in the guidance kit as we come out later today that it's a fairly significant drag in 2011 that is in our guidance.

EBIT around a range of $500 million or so.

But again, we see that as a bottom.

In one of the charts that we showed as we went through the script we think that that, based on current forwards, that is a bottom for us and we should start to see progress from there.

Michael Lapides, Goldman Sachs.

-- on your capital spending outlook at the subsidiary level or at the business unit level?

Mike, we missed the beginning of that question; I am sorry.

Can you just give an update on your capital spending and capital growth plans?

Have there been any changes since I think you last discussed at EI at the segment level or at the consolidated level?

Michael, if you look at 2011, we are looking at total capital of about $3.9 billion consistent with what we showed before and in 2012 about $4.6 billion.

The growth component of that is $2.1 billion in 2011 and $2.6 billion in 2012.

Again, I think these numbers are very consistent with what we have shown previously.

Steve Fleishman, Bank of America.

Hi, guys.

Just I guess two inter-related questions.

On the -- you mentioned, I know going back to your analyst meeting mentioned having a lot of outages scheduled for 2011 on the merchant.

I think at the meeting you actually gave a number for the impact of that.

There are five major outages.

Three of them are -- we have all three of the merchant nuclear units have refueling outages.

Brayton Point, the cooling towers that Mark mentioned, one of the -- part of it is done late this year, a little bit of it's in 2012, so Brayton will be out for a much longer period than would be normal.

The last is, because we have been running Fairless Works above plan, we have to do a maintenance outage on Fairless Works in 2011 which is earlier than was anticipated originally.

Okay.

And is there a number, a cost of all these that --?

We said in May and I think it's consistent, Steve, that you should expect [O&M] expenses to be up $70 million to $80 million year-over-year based on these outages.

Paul Fremont, Jefferies.

I just wanted to go back to, I guess, your opening statement on mergers and acquisitions.

What would it have been with respect to either Progress or Duke that would have made, in your view, a good fit potentially for Dominion?

And how should we sort of think about the types of candidates that you think would be a good fit, absent these two companies?

Well, thanks for your question but I am going to revert to -- I have said all we are going to say about M&A.

We, since I became CEO over five years, have never talked about it.

Not going to talk about it in the future but there was lots of rumors going around.

I appreciate folks' interest in it, but I think it's better just not to talk about it one way or another.

But I appreciate -- I understand your question.

Nathan Judge, Atlantic Equities.

Good morning.

Wanted to expand on your Cove Point comment, specifically what kind the CapEx opportunity are you talking about, and perhaps over what time period and what milestones there?

Thank you.

Nathan, you are referring, I assume, to the comment about potential liquefaction facilities.

Yes, yes.

We have done work around what its cost would be and we are not far enough along to announce what that would be.

We have discussed the potential for liquefaction facilities at Cove Point with a number of very major companies.

If you think about Cove Point, where it sits there in the Mid-Atlantic, a couple hundred miles from the Marcellus region, it has got all the facilities it needs other than the liquefaction itself.

The pipe is there, the terminals are there, the logistics [band] at the pier.

If the Marcellus is going to build out the way it is expected to reach its full potential, people are going to have to explore exportation of the gas.

Like the import facility, we won't enter into a speculative capital investment there.

If we go ahead with the liquefaction facility, it will be because it's tied to a firm supply for a long period of time and a firm customer on the other side for a long period of time.

We plan on -- if we do it, it will be acting like we do now as the middleman in between the suppliers and the customers.

[Randall Wriden], Barrow Handley.

Good morning.

My question is on Cove Point as well.

You answered part of it, Tom.

I am just curious; shortening the contract length from 18 years to 10 years seems like a pretty substantial concession with nothing else in hand.

Can you give any additional insight on, I guess, the criteria you are looking at?

And specifically, if you were to fund a multibillion-dollar project like this, how would it change anything on the financing front?

Thanks.

We are going to work with our partner at the Cove Point expansion in development of infrastructure out of the Marcellus region in other ways in addition to a potential liquefaction facility.

That period of time is about the period of time -- the length of time we are talking about, the 10 years, is what we need, we believe, to make sure this is going to pan out, if it is.

And we will have the flexibility to do that.

We are not far enough along on the financing issues in the costs and how it would be financed and who would be partners to talk about potential financing that would come out of it.

Paul Patterson, Glenrock Associates.

The electric sales growth that you guys are planning, could you give us a little bit more of a flavor for that?

Could you repeat that, Paul?

Electric sales growth.

Electric sales growth that you guys see.

Yes, Paul, we are looking next year -- I am glad you asked that question.

We look at next year at sales growth over weather-normalized 2010 of about 2.7%.

Now it may seem like sound like a large number so I want to break it down for you.

2.7%, about half of that growth is for specific data centers and base consolidation that we know will come online next year.

So the real sales growth for commercial and residential customers that we are looking at is about 1.3% year-over-year.

If you would -- to think about the last few years for us, we have been fairly flat in growth and so we think at 1.3% that is a fairly modest number that the growth would be this year versus last.

Michael Worms, BMO.

Thank you.

Can you just kind of give us an idea of the timing of the Warren County [plans]?

Warren County permit, as Tom mentioned, got its air per minute December of 2010.

It's out for EPC bid and we expect to get those bids in this quarter or early next quarter and evaluate those.

The commercial operation [date] would be probably early 2015, late 2014 time frame.

Thank you.

Ladies and gentlemen, we have reached the conclusion of our call.

Mr.

McGettrick, do you have any closing remarks?

Yes, thank you very much.

I wanted to take this opportunity to let everybody know that a key member of our Investor Relations team is going to move on to a new and challenging job in the Company running our Business Planning Department.

That would be Greg Snyder, who is the Director of Investor Relations for us.

He has been involved and interfacing with everybody on this call and many others for the past seven years.

He has done a fantastic job for us and we really appreciate the contributions he has made.

We wish him well in his new endeavors.

He is actually just going down one floor so we have a place to find him if we need help, but really appreciate everything he has done.

And then, finally, just to remind everybody our first-quarter earnings call is tentatively scheduled for April 28.

We appreciate the time and attention today on this call.

Thank you.

Thank you.

This does conclude this morning's teleconference.

You may disconnect your lines and enjoy your day.