The operator introduces the CenterPoint Energy Second Quarter 2024 Earnings Conference Call and states that there will be a question-and-answer session after management's remarks. Jackie Richert, Senior Vice President of Corporate Planning, Investor Relations, and Treasurer, will be leading the call. Management will discuss projections and forward-looking statements, and will be using non-GAAP measures. The call is being recorded and a replay will be available on the company's website. Jason Wells, CEO, will now begin the call.

In the second quarter, the company reported GAAP and non-GAAP EPS of $0.36 per share and reaffirmed their full year and long-term guidance. The focus then shifted to the impact of Hurricane Beryl, which caused power outages for 2.3 million customers in the Houston area. The company began preparing for the storm nine days in advance and activated over 15,000 mutual assistance crew members. Hurricane Beryl made landfall as a Category 1 hurricane with heavy rains, flooding, and strong winds.

The company has taken proactive measures to address the impact of severe weather on their distribution system, including increasing vegetation management spending and doubling resources. They have also set a goal to trim or remove trees near 2,000 miles of their system by the end of the year, representing a 50% increase from their original plan.

The company has begun vegetation work to improve customer outcomes and address concerns with emergency response. They have a comprehensive plan with three pillars: resiliency investments, a customer communications program, and strengthening partnerships with government and community leaders. They will use advanced technologies to harden their distribution system and launch a new outage tracker to provide customers with timely information. They also plan to improve their partnerships with government and community leaders.

The company plans to hire an emergency response leader and develop partnerships with the community to improve their emergency preparedness and response. They will also be taking additional actions and providing updates on their progress. Their goal is to improve in all areas of emergency response and continue making customer-focused investments. The company's CFO will discuss their financial plan to support these efforts.

The speaker covers three main topics in their presentation: second quarter financial results and guidance, progress on regulatory calendar, and capital deployment and storm costs. They reaffirm their full year 2024 non-GAAP EPS guidance and discuss their expected growth through 2030. They then provide details on their second quarter earnings drivers, including rate recovery and favorable O&M expenses.

The article discusses the financial performance of the company in the first quarter of 2024, highlighting the impact of rate recovery in O&M and unfavorable weather and interest expenses. It also provides updates on the company's regulatory calendar, including approval of a final settlement in Texas Gas, filing of a rate case in Minnesota Gas, and a non-unanimous settlement pending approval in Indiana Electric. The company plans to engage in settlement discussions and has a new statutory deadline for a final order in February 2025.

The company is working with stakeholders to reach a fair outcome in their pending rate case in Houston. They have abated the schedule for their system resiliency plan and will file a revised plan in the first quarter of 2025. They will also be filing a notice of intent for a rate case in Ohio. Despite storm costs, the company has invested $800 million in base work for the benefit of customers and communities in the second quarter of 2024 and is on track to meet their capital investment target of $3.7 billion for the year. This reflects the company's conservative approach to planning each year.

The total spending associated with the May storm events and Hurricane Beryl is estimated to be $1.6 billion to $1.8 billion. The company plans to securitize both the capital and non-capital portion of the distribution costs to limit the impact on customers' bills. They also anticipate filing for securitization in the fourth quarter of this year. The company's FFO-to-debt ratio was 13.3% in the second quarter, and they remain focused on the balance sheet as they continue to fund growth in Texas. They have evolved their approach to financing plans for the rest of the year, taking into account the impact of the storms.

The company is committed to maintaining their current credit metrics despite facing incremental costs. They plan to pull forward $250 million of equity from 2025 into this year and incorporate higher equity content into upcoming debt issuances. They are confident in their long-term execution and are making progress on the sale of their Louisiana and Mississippi gas LDCs. The majority of the proceeds from this sale will be used to fund capital investments at Houston Electric for the benefit of customers. The management team is committed to delivering for all stakeholders, including customers, communities, regulators, legislators, and investors. They are now ready for Q&A.

Jason Wells and Shar Pourreza are discussing the impact of recent events on the ongoing settlement negotiations in the Houston Electric rate case. Wells acknowledges the need for improvement and continued investment in the system's resiliency. He also mentions plans to ramp up resiliency spending in light of the recent events and commitments made to move forward with the resiliency plan.

The speaker mentions that they are considering different versions of hybrids to increase the equity content in their financing plan. They also mention a pull forward of $250 million, which will not change the overall plan but will help position the balance sheet until anticipated securitization proceeds come in. The speaker also mentions that the rating agencies are reacting positively to the event and updated plan.

The speaker is discussing the company's plans to respond to the recent storm and prepare for future ones. They mention ongoing conversations and actions being taken to improve resiliency and securitize costs. They also express confidence in their ability to respond to future storms.

After a severe storm, the company has been working to improve their outage tracker platform and communication methods. They are confident that they will be better prepared for future storms and can provide customers with more information. They have also been investing in resiliency measures, which proved beneficial during the recent hurricane. While it doesn't help those affected by the storm, the company is confident that their investments will have a positive impact in the future.

In this paragraph, the speaker discusses the impact of their work on the distribution grid and how it has saved over 150,000 outages in communities. They highlight the importance of continuing this work to minimize future outages, and address the issue of trees outside of their right-of-way causing outages. They mention their efforts to work with property owners and authorities to address this issue. The speaker also mentions the possibility of pulling forward equity from 2025 to 2024 and doing equity content financing, and discusses the one-time issues in their 12-month episode of debt. They are asked about their base year and their current plan.

The different methodologies used by S&P and Moody's have resulted in slightly different ratings for the company. The company expects to improve its FFO to debt ratio in the third quarter due to a one-time item. They are also doubling their efforts in tree trimming, but still plan to achieve a 1-2% reduction in O&M costs. The deployment of smarter meters on the gas side will help with efficiency.

The speaker discusses the company's proactive increase in vegetation management and their ability to achieve a 1-2% reduction in O&M costs. They also mention the securitization of distribution spending and their confidence in a $1.6-1.8 billion increase. This will be spread over multiple years and includes costs from the derecho and Hurricane Beryl.

The speaker discusses the primary driver of costs for their system and the impact on customer bills. They also mention the legislative outlook and potential initiatives being explored to improve resiliency, particularly in regards to vegetation management.

The speaker discusses the unique aspects of the Texas market and the need for customer contact information. They also mention the potential for changes in policy and the timeline for getting back to the target FFO/Total debt level. A question is then asked about the accelerated equity in 2024.

Chris Foster, the CEO of the company, discusses the positive offsets to the pressure points caused by recent storms, such as additional operational expenses and lost sales. He also reaffirms the company's outlook for the remainder of the year, thanks to the effective restoration efforts and ability to maintain the base CapEx plan. The use of mobile generators for localized outages and vegetation management is also being evaluated and will be included in the company's resiliency filing.

The legislation passed in 2021 focused on load shed events and the utilization of larger units tied to substations. Since then, there have been 115 instances of tight system conditions and the company has increased the number of small units to 18 out of a total of 30. They also borrowed 12 units from utility peers for storm response. The company manages a diversified portfolio of assets to meet various risks, but will adjust if the state's policy objectives change. The system resiliency plan is estimated to cost between $2.2 billion and $2.7 billion, with the plan on slide 3 falling within that range.

The speaker discussed the company's plans to accelerate work in 2024 and the potential for undergrounding to become a more prominent solution for outages. They also mentioned the current penetration of underground lines and the need to balance undergrounding with hardening overhead lines. The Q&A session has ended and the call is concluded.

This summary was generated with AI and may contain some inaccuracies.