埃克西爾能源 (XEL) 2017 Q2 法說會逐字稿

Good day, and welcome to the Xcel Energy Second Quarter 2017 Earnings Conference Call. Today's conference is being recorded.

At this time, I'd like to turn the conference over to Mr. Paul Johnson, Vice President, Investor Relations. Please go ahead, sir.

Good morning, and welcome to Xcel Energy's 2017 Second Quarter Earnings Release Conference Call. Joining me today are Ben Fowke, Chairman, President, Chief Executive Officer; Bob Frenzel, Executive Vice President and Chief Financial Officer. In addition, we have other members of the management team in the room to answer your questions.

This morning, we will review our 2017 second quarter results and also update you on recent business and regulatory developments. Slides that accompany today's call are available on our website. As a reminder, some of the comments during today's conference call may contain forward-looking information. Significant factors that could cause results to differ from those anticipated are described in our earnings release and our filings with the SEC.

I'd now like to turn the call over to Ben.

Thank you, Paul, and good morning, everyone. We are pleased to report solid earnings for the quarter, in line with our expectations. Bob will provide more detail and a regulatory update. That said, we are well positioned to deliver on our 2017 earnings guidance and remain committed to our long-term outlook.

We've made significant progress on our steel-for-fuel initiative this quarter and are executing on our plan to add almost 3,400 megawatts of new wind to our systems by the end of 2020.

Earlier this month, the Minnesota Commission approved our wind proposal to add 1,550 megawatts of new wind generation, which includes 400 megawatts of power purchase agreements and 1,150 megawatts of new rate-based wind, more than doubling our wind ownership. All projects are expected to be completed by the end of 2020 and will qualify for 100% of the PTC tax benefit.

Our Texas-New Mexico proposal to add 1,000 megawatts of self-build wind and 230 megawatts of power purchase agreement is currently in regulatory review. The proposal has received strong community support, reflecting the significant customer savings and environmental benefits. We expect final decision by the end of the first quarter of 2018.

Finally, our 600-megawatt Rush Creek Wind Project in Colorado is under construction, progressing as planned and is expected to go into service on time in late 2018.

Earlier this month, Colorado Governor Hickenlooper issued an executive order to reduce greenhouse gas emissions and joined other states that have signed on to the U.S. Climate Alliance. We are working with stakeholders to develop and advance a plan that will help Colorado achieve the governor's goals, and we'll keep you posted on potential developments.

Our steel-for-fuel strategy is about making investments that produce significant savings to our customers, which more than offset the capital costs. Another example of this strategy is our recent proposal in Minnesota and North Dakota to terminate 4 power purchase agreements. This includes the termination of Fibrominn, Laurentian and Pine Bend PPAs. If approved, these actions would result in capital investment of about $100 million and provide about $650 million in net cost savings to our customers over the next 10 years.

We expect that Minnesota and North Dakota commissions will review and decide on these valuable customer programs before the end of 2017.

Providing our customers with reliable energy supply continues to be a company priority, and our efforts were once again recognized by the Edison Electric Institute. Last month, EEI presented us with the Emergency Recovery Award for our outstanding restoration efforts after Texas winter storm, Jupiter, in January. This was the third consecutive year Xcel Energy has received this award.

I'm proud of the men and women that deliver for our customers every day on behalf of Xcel Energy. Our employees continually rise to the occasion to provide safe, reliable and affordable energy, frequently under tough conditions with adverse weather and during the holidays when they would prefer to be home with their families.

Finally, at Xcel Energy, we're constantly working to integrate new technologies into our operations to enhance public and worker safety, improve efficiency and generate additional savings. A really good example is our recent utilization of drones. We're pioneering the use of drones to inspect project sites, transmission lines, natural gas pipelines, power plant boilers, wind farms and storm damage assessment.

We're breaking new ground and have received preliminary approval from the Federal Aviation Administration to fly beyond the line of sight. I think this is just another example of striving to deliver on operational excellence.

So with that, let me turn the call over to Bob to provide more detail on our financial results and outlook and a regulatory update. Bob?

Thanks, Ben, and good morning, everyone. We realized another solid quarter of earnings of $0.45 per share in 2017 compared with $0.39 per share in 2016. The most significant earnings drivers for the quarter include higher electric and natural gas margins, which increased earnings by $0.07 per share, largely due to the impact of rate increases in nonfuel riders to cover our capital investments; lower effective income tax rate, which increased earnings by $0.02 per share. The lower effective tax rate was mainly due to wind production tax credits which flow back to our customers through a rider or a fuel [cost]; and lower O&M expenses, which increased earnings by $0.02 per share. Offsetting these positive drivers was increased depreciation expense, largely due to capital additions, which reduced earnings per share by $0.05 per share.

Turning to sales. On a weather and leap year-adjusted basis, our year-to-date electric sales improved 0.8%, reflecting approximately 1% growth in the number of customers across most customer classes and jurisdictions, offset by lower use per customer. Natural gas sales increased 1.7% year-to-date on a weather and leap year-adjusted basis with a similar story, continued growth in the number of customers, partially offset by a decline in use per customer.

While it's too early to call this a trend, it's nice to see that both year-to-date electric and natural gas sales are growing a bit better than expected.

We continue to make progress on managing our costs. Quarter-over-quarter, O&M expenses were $19 million lower, largely driven by timing of planned maintenance at our power plants. On a year-to-date basis, our O&M expense is $10 million lower. We're focused on keeping our cost low and are on track to deliver flat O&M expenses for the full year.

Next, let me provide a quick regulatory update as we've made significant progress during the quarter and continued to execute on our plan. In the second quarter, the Minnesota Commission approved our multiyear electric rate case settlement agreement without modification. This multiyear plan covers 2016 through 2019 and provides the company and customers with revenue and price certainty. It also includes an annual sales true-up and continued use of all existing riders.

In Colorado, the Commission approved our advanced grid proposal and a decoupling mechanism with some modifications. First, the Commission approved our advanced grid settlement. The project includes installing advanced metering infrastructure and communication networks, which will enhance grid reliability, improve the customer experience and enable new programs and rate structures. The settlement spreads the capital investment over a longer time frame than originally proposed, deferring about $120 million of capital investment beyond our forecast.

Second, the commission approved total class revenue decoupling for residential and small commercial customers. The decoupling adjustment will be based on actual sales, which eliminates the impact of weather. The Commission modified our decoupling proposal. We plan to file for reconsideration of the decision to calculate the decoupling based on class revenue rather than revenue per customer.

We also filed rate cases in Wisconsin and Colorado. In Wisconsin, we filed to increase electric rates by $25 million and natural gas rates by $12 million. The filing is based on a 2018 forward test year, a 10% ROE and a 52.5% equity ratio. We anticipate a Commission decision in the fourth quarter and final rates to be effective January of 2018.

In Colorado, we filed a multiyear natural gas case, seeking new revenues of $139 million over 3 years. The filing is based on a series of forward test years, an ROE of 10% and an equity ratio of 55%. We expect the Commission decision and implementation of final rates in February of 2018. We're also planning to file electric cases in Colorado, Texas and New Mexico over the next several months.

With that, I'll wrap up. Overall, it was an excellent quarter. We received regulatory approvals for a multiyear electric case and our wind proposals in Minnesota. In Colorado, the Commission approved the decoupling mechanism and our advanced grid settlement. We filed proposals with the Minnesota and North Dakota Commissions for termination or modification of higher-cost PPAs, which will provide significant reductions to customer bills.

Finally, we posted strong financial results for the quarter and are well positioned to deliver on our 2017 earnings guidance range of $2.25 to $2.35 per share, our 4% to 6% earnings growth objective and our 5% to 7% dividend growth objective.

This concludes our prepared remarks. Operator, we'll now take questions.

(Operator Instructions) And we'll go first to Ali Agha with SunTrust.

Ben or Bob, when we go back -- your original base CapEx plan, '17 through 2021, was $18.4 billion. So when you look at some of the projects on the wind side that have been approved, you had mentioned some delay or a push-out, I should say, on the EMI in Colorado, net-net, what is that $18.4 billion looking like right now?

Yes. Ali, we haven't updated our capital guidance based on the updated wind and the effects of ages and other capital impacts, and we expect to do that in normal course, as we usually do, in the third quarter.

But there's obviously moving parts. I mean, so as we've said last quarter, you can't expect it to go up to full amount of what's been approved. But -- and we've obviously added the biomass opportunity in there, but there are some moving parts. And as Bob said, we'll have a full updated CapEx forecast third quarter.

And if I just recall from previous disclosures, the incremental new wind projects, if all of them get approved, if I remember correctly, was roughly about $700 million. Does that sound right?

Yes.

And of that, Bob, just to be clear, the ones that you have gotten approved for Minnesota, how much of that $700 million is now officially blessed by the regulators?

Ali, I think that the approval of our 400 megawatts build-own-transfer wind projects in Minnesota would realize all that $700 million.

I see. So that's all done. And if I heard you right, Bob, you also said, in Colorado, there's about $120 million that has been pushed in outer years on the EMI spend.

That's correct.

Okay. So those are 2 distinct data points that are incremental -- among the other numbers you were mentioning, at least among those, is there anything else incremental to keep an eye on from our perspective?

No. Nothing discrete at this point, Ali. We're just working through the normal process of updating all of our capital plans for all of our operating companies.

And obviously, Ali, we're also waiting for approval of the SPS 1,000 megawatts, which is approximately $1.5 billion to $1.6 billion of CapEx.

Right. Right. So that's not in there yet. Got it. Second question. The 12-month earned ROE -- operating ROE, I do believe, was 8.98%. If my math is right, that reflects roughly about a 60 basis point lag. Was this authorized? Does that sound about right?

Yes. How many points did you say?

60, 6-0.

Yes. That's right.

And Bob, is the goal -- I mean, given fictional timing issues, et cetera, what's the sort of the theoretical maximum you can push that? Are we pretty close to that right now?

Ali, we've been committed to trying to close the lag in our earned to actual ROEs. We first started talking about this, I think our consolidated allowed was closer to 9.8%, and we were earning closer to 8.9%. So we've obviously brought the bottom end of that number up. The top end has come down slightly. Our weighted average authorized is closer to 9.6% now. I think in our first quarter call, we provided guidance that we were looking to be around where we were last year, and we hope to close that gap sometime in 2018.

Okay. Okay. And last question. As you look at these CapEx spending opportunities and I know you'll scrub it all out and give it to us in Q3, but clearly, the bias is towards more spending in renewables. There seems to be support for that -- the wind project, et cetera, you talked about in SPS. So when you put it all together, are you still looking at a 4% to 6% EPS CAGR? Is there some share issuance dilution that keeps you there? Or I mean -- or should we assume that as CapEx is going up mathematically, if shares are not going up, that should cause EPS CAGR to go up as well?

Well, Ali, this is Ben. I mean, we are certainly pleased that we got the approval in Minnesota. We continue to look for opportunities to add new wind. I think the Minnesota Commission is comfortable, if we can bring them good projects, [they're] going to do more. Still got to get the approval down at SPS. That's a big part of that CapEx upside. So all those things happen. I think we're pushing towards the upper end of our range, but -- and we don't have to issue equity. I think that's important to note. I mean, there is some debt that goes with that, but we don't have to issue equity. So I think we're well positioned to be at the top of that 4% to 6% guidance range particularly for this forecast period, but we haven't changed the long-term growth rate at this point.

We'll go next to Chris Turnure with JPMorgan.

I wanted to follow up on the SPS wind project approvals. I think in the past, you'd stated that you were hoping to get approval by year-end in both New Mexico and Texas. And at the very least, you could get recovery of those projects through a general rate case filing, but you would also consider asking for some kind of rider mechanism to get them. Could you just kind of walk us through the specifics of upfront, what you need to hear from both commissions before you will greenlight the projects and when you expect that?

Yes. Sure. Can do that. Let me just say, I think it's going to be more like the first quarter of 2018 for the final approval. We're on the ground getting a lot of community support, legislative support. I think these projects are very popular for their obvious economic benefits. So this is about a $1.6 billion spend. I believe that increases our rate base in SPS by about 40%. As we know, we've suffered from some pretty significant lag at SPS. So our proposal is that we need concurrent recovery. The benefits are going to flow immediately to our customers. They're going to be significant. We need to get immediate recovery. And I'm cautiously optimistic that we'll get that, and we're going to need to get that. I mean, this is too big of an investment to put into place and suffer the historic lag we typically have. So that's what it's all about, and that's what we're working on right now.

Okay. And your conversation so far with the various stakeholders, commissioners and other intervenors are leading you to positive conclusion so far?

Well, I've -- we haven't heard anything that would suggest that we can't work through a settlement. And that would be the ideal outcome, but these things take time.

Okay. And then I was pleased to see the announcement of the PPA buyouts today. Relatively small numbers overall in the scheme of things, but certainly an attractive opportunity going forward. Are there more of these? What's the magnitude? And could you maybe give us a little bit of color on the counterparties there and maybe why, in your opinion, they were willing to take upfront cash in exchange for a stream of cash flows over time that they would have otherwise gotten through the PPA?

Yes. Let me just first step back and say I'm really excited about this. It's not a big capital investment for us. But $650 million of net cost savings, that's pretty significant to our customers. And I think if these all are approved, even after the cost to buy out the projects and all the other things you have to do to get the deals done, I think you're looking at about a 3% rate decrease for our customers. And that's great. And that's consistent with what we're trying to do is continue to reduce carbon emissions while keeping rates flat and improving the customer experience. I think that's the right mix and that's the right approach. And that's -- this is more evidence we can get it done. How many more opportunities are out there? I think that remains to be seen. It's -- I don't think there's a ton, to be honest with you. But we're going to continue to look for anything we can do that helps save customers money and provides us investment opportunity at the same time. I would say that -- what's the rationale for the counterparties to do this? I would look at the Fibrominn plant, which is the largest of the 3 projects I mentioned. This was a project that had emerged from bankruptcy. It's always been a project which is very expensive to the customer, but I think razor-thin margins, if not worse, for the counterparties. So I mean, it's an economic proposition from their end to -- when they do their NPDs and discounted cash flows. And it's obviously positive for our customers. So it's a real win-win for everybody.

Chris, it's Bob. As Ben said, the reason and the rationale for the counterparties is really to the benefit of the customers as a fuel cost. The owners of the assets aren't making significant margins on the assets. The benefit to the customer is to get rid of a significantly high fuel cost that is relatively a pass-through to the other side's owners.

Okay. And do you recall the original motivation of the PPA signing from your perspective? Was it part of PURPA? Or was it something else, RPS, et cetera?

Chris, do you want to take that one? This one dates back quite a ways.

Sure. This is Chris Clark, President of NSP-Minnesota. This dates back to the 1994 legislative proposals in Minnesota that allowed us to store spent fuel at our nuclear facility and required us to enter into 125 megawatts of biomass power purchase agreements. That was later revised to 110 megawatts. So this has quite a history.

We'll go next to Paul Ridzon with KeyBanc.

These -- the SPS turbines, are they qualified for 100% PTC?

Yes, 100%.

And that's a big chunk of intermittent capacity to drop in the market. Does the existing fleet have the ramping capability to follow that? Or is there a follow-on opportunity around rapid-ramping gas plants?

We believe we can integrate that into our existing system with the existing portfolio of resources. I mean, this is -- and obviously it's -- when you pencil it out versus firing up gas and coal facilities, it makes economic sense. So we have looked at that very closely, Paul, and believe it works.

And the $1.6 billion, how is that apportioned between the different jurisdictions?

The plants that -- the wind farms, there's 2 wind farms: one is 478; one, 522. You should consider the total capital dollars being split roughly on that ratio.

Well, I think you're talking about what jurisdictions, Paul? Is that what you mean?

Yes.

The percentage?

Yes.

Let me get me some help here. I think our whole -- I think Texas is about what, 60%?

Texas is about 50%. SPS -- or New Mexico is about 20%, and wholesale is about 30%.

Yes. So that's how it'd be allocated.

And then New Mexico can be troublesome. My words, not yours. How have the discussions there gone?

Well, again, I think the stakeholder outreach has been incredibly supportive. And that's, I think, going to be helpful, Paul, as we try to get the concurrent recovery that we need to do this great economic benefit for our customers. We all have to -- shareholders have to participate in it, too. So again, as I said in the -- previously, I'm cautiously optimistic, we'll get this over the finish line with the kind of recovery we need to make it successful for all stakeholders.

And if you get to that point, do we need to reshuffle the capital deck and push more projects out or -- I mean, I think you have tremendous support for equities if you need it for these projects given the economics?

I appreciate that support. But at this point, we don't need equity.

We'll go next to Travis Miller with Morningstar.

I was wondering, as you add all these wind farms on and all the capacity here. Kind of a follow-up to Paul's question. What additional investment do you need that might not already be anticipated? And kind of if you go back to previous projects you've had, what have you found, either in terms of operating costs or capital costs, that were needed in addition to the price tag for the actual turbines and installation?

Yes. Well, listen, let me just -- let me take this 2 ways. I'll answer your question directly. When we price out the economics of these wind farms, we assume any kind of incremental ancillary cost that might be occurred. And we -- I think we do a very good job of realistically looking at that, the additional transmission build-out, et cetera, Travis. Wind is fuel, and hence, steel-for-fuel. And I do think that opens up the opportunity to have dialogues with our key stakeholders around the retirement of the some of our fossil plants, principally coal plants. And if you look forward, I think what that does for us is the opportunity to do more steel-for-fuel and more steel, frankly, as we get beyond this forecast period. I mentioned in my remarks that Governor Hickenlooper issued an executive order in Colorado. I think that's going to create another wave of opportunities for us to add more renewables to the system as we start to look at the potential retirements of some coal plants. But again, this tranche of renewables, wind, we can integrate into our system with some ancillary costs, which are baked into the LCOEs that we're quoting to our commissions.

Okay. And at what level do you think you'd start running into some of those integration issues? Although in terms percentage of wind or other renewables on the system intermittently?

Yes. So we are going to continue to advance carbon reduction, and we're going to do that with affordability in mind. I think we're uniquely positioned to do that. I'm really pleased to see some of my colleagues are doing the same thing. I think it's the right thing to do. And when we start to get to those next incremental tranches and we start looking, I think, more at solar and wind, then you have to start looking at potential coal retirements, replacing that with a portion of backup gas, most likely CT, to make sure we have the reliability and the other things we need on our system and the ramping capacity. So Travis, that's probably in the 2020s that we will start to really aggressively do that. I am really excited about it. I think the energy future for our jurisdictions is going to be a bright one. I think we can achieve remarkable decarbonization goals, and I think we can do that with affordability in mind. And that's what we're striving to do every single day.

We'll go next to Angie Storozynski with Macquarie.

So what does it mean, concurrent recovery? Is it a rider? Is it a forward test year? How do you envision it for SPS?

Well, Angie, I think we can be pretty flexible actually, how we get that concurrent recovery. And there's a number of different -- we -- I think we made a suggestion in the filing, and we're open to the ideas. But the important thing is that we don't suffer the lag as we traditionally have done. So those settlement discussions are taking place, and there's different pathways we can take to achieve those outcomes. We're not really wedded to anything as long as we get what we need from real-time recovery.

And this -- the -- would you need any legislative actions in order to get it done?

No.

Okay. And now -- so I know that nothing is happening in Washington. But what if there were to be a change in the corporate tax rate? How would it play into your plan for adding renewables? Would you ever consider maybe using tax equity investors to help you monetize the tax benefits of the wind farms?

Well, I mean, that's a really great question, Angie. We are -- while nothing seems to be happening in Washington, we're spending -- I know I am, with some of my colleagues, making sure we advocate for the right kind of tax reform if it were to happen. And that basically we don't believe the trade for 100% capital expensing in exchange for nondeductibility of interest expense is a good trade at all for shareholders or customers. And frankly, we've told them that bonus depreciation isn't a good trade if that means a higher effective tax rate. So -- and I think, by the way, we've gotten a lot of good traction on that. So I think our industry is being recognized by legislators as unique. Where tax reform goes, I don't know. I mean, that's -- I mean, I've said that all along when this was all talked about that we'll see where it goes. I think we'll always be opportunistic. And if things like tax equity makes sense, we would look at it. But that's not our plans right now.

And I'm asking, something because when you calculate the benefits, right, to the customer, the present value of that benefit is highly dependent on your ability to monetize the tax credits. No?

Well, I mean, we have...

Well, the time frame over which you can monetize it.

Yes. Well, these projects have a lot of tax benefits associated with them. So the effective tax rate does matter. But even if you stress-test this to the max, these projects are still going to be good projects. And I think that's the key. So I mean -- and ultimately, I think as the technology improves, they'll continue to be good values the next -- and when we talk fast forward 10 years from now, I think these technologies, even without tax benefits, will compete very nicely with fossil fuel alternatives. So that's always something we have to be aware of, and we are. We track it. But right now -- and I mean, they're deeply in the money for our customers.

We'll go next to Joe Zhou with Avon Capital Advisors.

It's Andy Levi. A very good quarter for you, guys, as always. Just very quick, a similar question that was asked earlier that I've asked in the past. So as -- it's obvious, you're trending towards -- very easily towards, I think you said and some other callers towards the high -- I think it was Ali -- towards the high end of your 4% to 6% growth rate. I guess, it's somewhat, I don't want to say, in the bag. But at what point -- and I've asked this on every call over the last couple of quarters. Does -- do you really take a look at changing that growth rate and, at the very least, eliminating the low end?

Well, we'll continue to look at it, and I'm pleased with the progress we've made. We've got some more things to do, Andy. We don't have the SPS wind deals approved. We've got to watch and see how some of the rate cases that Bob mentioned proceed. So I mean, there are still some moving pieces. I'm comfortable letting you know that we're trending towards the top of that range. And that's what our goal is going to be. And as I said before, as I can't really add anything new to it, we'll continue to look and evaluate what our -- we think our long-term growth rate is. I do agree with you that the actions we've taken and the success we've had so far would probably indicate that there's certainly much more opportunity to hit the 6% than there is risk that we'll only be at 4%. I hope people can be comfortable with that.

And if everything kind of on the regulatory front kind of goes your way, do you see yourself exceeding the 6%? Or is this -- the 6% kind of the max?

Well, that's the kind of the analysis we have to continue to do. And at this point, we're saying 4% to 6%, Andy. So I just got to -- I think I just got to leave it there.

Okay. And then just more of an industry question because kind of looking at what you guys are doing and then, obviously, the big AEP announcement as well and giving just thoughts at a very high level. But clearly, the utilities are being much more aggressive -- extremely aggressive in kind of building out their own renewable footprints versus, let's say several years ago, PPAs. So what do you think that means for kind of renewable developers whether -- I mean, obviously, NextEra has an outstanding renewable business and is growing in leaps and bounds? So maybe they're not as effective. But then you have kind of marginal players like AGR and other smaller developers as well. So just kind of your thoughts -- is the market big enough to support them all? Or do we continue to see this trend, whether it's large utilities like yours, or Alliant as another example, kind of just doing it on their own because economics are good and you're able to?

Well, Andy, I guess, I would look at it this way. I mean, I think the overall pie is getting bigger. As renewables compete directly and win on economics versus the more traditional fossil alternative, that means we're going to have a lot more renewables on the system. And we certainly are. And when I look forward to 2030, we're going to continue to advance smart renewables, large-scale renewables that save customers money. Now how that happens, I think that depends. I do think NextEra is well positioned. I mean, they do a good job. There's others that do a good job. But if you notice, even in the megawatts that we're going to own in this -- what we talked about with wind, there's some significant component of build-own-transfer. And so I think you're going to see more and more of that from all developers, where this is a prime time type of asset to own. And I think utilities are going to want to own these assets. And they're going to be looking to either self-build, as we've done, or contract with developers who own those once they are getting ready to go into service under a build-own-transfer concept. But I think you will see less PPAs. But if the overall pie increases, I'm not sure everybody doesn't have a chance to participate in the market, at least the good ones.

We'll go next to Paul Ridzon with KeyBanc.

So a follow-up. Ben, you've obviously been on the forefront of renewable. Where are you with regards to storage and willing to put capital to work there?

Are you talking, like, specifically batteries?

Yes. Yes, sorry.

Yes. We -- well, we are continuing to look at how batteries can be deployed on our system. And I think the prices have to come down more on our system. We're relatively low cost compared to other regions of the country. So -- but I think they will come down, Paul, and I think battery technology will play an increasingly bigger role on our system. You can -- and you see stuff where renewables paired with batteries are coming in at a pretty good price point. You can have some of that. I don't believe that you can -- that renewables combined with batteries replace CT gas turbines completely. I mean, you still need that 24/7 backup capacity. You still need spinning mass on the systems. There's a number of things like that. But I believe that you'll see us, when the economics are right, be ready to deploy batteries. In the meantime, we're doing it on a pilot basis to really understand all the value streams, how they stack up and how this can be a resource going forward. To me, it's not unlike solar where solar was 10 years ago. And as it gets ready for prime time on our system, we'll look to invest in it.

Maybe prime time on your system a little bit later because you're already in such a good place on a price standpoint?

Yes. I mean, it will be driven by economics. But that said, I see that day coming. So we will be positioned to be there when it's ready.

This will conclude today's question-and-answer session. I'd like to turn the call back over to Bob Frenzel, CFO, for closing remarks.

Thank you all for participating in our earnings call this morning. Please contact our investor relation team with any follow-up questions.

Ladies and gentlemen, this does conclude today's conference. We thank you for your participation. You may now disconnect.