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CMS Energy Corp  (NYSE:CMS)
Q3 2018 Earnings Conference Call
Oct. 25, 2018, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, everyone, and welcome to the CMS Energy 2018 Third Quarter Results. The earnings news release issued earlier today and the presentation used in this webcast are available on CMS Energy's website in the Investor Relations section. This call is being recorded. After the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time. (Operator Instructions) Just a reminder, there will be a rebroadcast of this conference call today beginning at 12:00 p.m. Eastern Time, running through November 1. This presentation is also being webcast and is available on CMS Energy's website in the Investor Relations section.

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

Srikanth Maddipati -- Vice President, Treasury and Investor Relations

Thanks, Rocco. Good morning, everyone, and thank you for joining us today. With me are Patti Poppe, President and Chief Executive Officer; and 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.

Now, I'll turn the call over to Patti.

Patricia K. Poppe -- President and Chief Executive Officer

Thanks, Sri, and thank you, everyone, for joining us on our call today. We're looking forward to Halloween next week, but there are no tricks here only treats; our predicable financial results. With that I'll begin with an overview and a focus on our triple bottom line, and Rejji will follow up with more details on our financial results and outlook.

With another great quarter behind us, we're pleased to report adjusted earnings of $1.93 per share to the first nine months of the year, which are up 16% from our 2017 results. We're also pleased to announce that we're raising the bottom end of our full year guidance by $0.01, with 2018 adjusted earnings guidance now at $2.31 to $2.34 per share, which further demonstrates our confidence in our ability to deliver again this year, giving us our 16th year of consistent industry-leading financial performance.

Now, as I've stated previously, when we moved to 6% to 8% growth from 5% to 7%, we were signaling that we raised the midpoint of our range from 6% to 7%, showing our confidence in continuing to deliver 7% as we have for 15 years in a row. Last year, we delivered a strong 7% which was toward the high end of our 6% to 8% 2017 guidance. So we will be disappointed if we did not deliver toward the high end of our guidance again this year.

We're also initiating 2019 adjusted earnings guidance at $2.46 to $2.50 per share which reflects 6% to 8% growth, no resets or surprises here. As we typically do, we'll revisit our guidance based on our actual results during our fourth quarter earnings call. And we're reaffirming our long-term goal of 6% to 8% with a bias toward the midpoint.

Slide five is a great reminder of how much work we're doing day to day, quarter to quarter and year to year, to provide the consistent financial results you've come to expect. We focus on prioritizing reinvestment opportunities in periods where we experienced better-than-expected cost performance or weather benefits like we've seen throughout this year. In times like we saw last year with poor weather and significant storm activity, we'll rely on our lean operating system and our ability to optimize work, and maximize safety and reliability for the benefits of our customers.

Since 2013, we've reinvested millions of dollars at the utility such as low-income support of $24 million that helps our most vulnerable customers catch up on energy builds during hard times, and reduces risk in our uncollectible accounts for all of our other customers. Right now, we remain focused on the work that can be done this year to derisk next year, while providing the immediate benefits to customers such as tree trimming in the electric business where we expect to spend $54 million, and our gas pipeline integrity and reliability programs, where we'll spend around $37 million this year.

This strategy allows us to deliver on our financial results this year, while providing a longer runway for us to deliver the growth you've all come to expect in the coming years. The blue line that you see on slide five represents the volatility that we manage year after year to ensure that you continue to experience consistent financial results shown by that straight as a narrow green line. In short, we ride the roller coaster, so you don't have to.

Our gas business is a perfect example of our triple bottom line thinking. We commit to a safe and reliable gas system, one of the largest in the country with over 28,000 miles of distribution mains, and nearly 1,700 miles of transmission lines that serve our 1.8 million gas customers. We protect our customers and the planet with every dollar we invest in our system. Our investment in the gas system will be about half of our total capital plan over the next five years. That's the triple bottom line in action.

The skilled workforce serving our gas customers is a critical enabler to our ability to execute our plan. Not that long ago, we couldn't find qualified candidates for many of the positions we needed to fill. So, we started our veteran boot camp in 2016. To date, Consumers Energy has hired 116 gas workers from the program with a 94% retention rate. It's a three-week training program followed by a 90-day internship, and then full-time job offers. The program accounts to 47% of the talent hired into that role over the last three years.

This program is far more successful than the previous hiring plans, where we typically saw 50% failure rate with a physical DIG assessment, which eliminated the candidate from further consideration. In fact earlier this month, I was at our new employee orientation, and I asked for all the veterans in the room to stand. I was overwhelmed to see that over half the room was filled with those who have served our country. I am so proud to have these veterans on our team and putting their skills and knowledge to work for our company and our customers.

My co-workers are enhancing safety of our system by replacing older services and mains that are source of gas leak. These necessary replacements not only improve the safety of our system, but also reduce potential methane emission rate. We are proud to have reduced our methane emissions by over 15% in the last 10 years, but we are never satisfied, and we have an internal methane reduction task force dedicated to improving our performance.

All of this needed work requires capital at a time when the commodity price of natural gas has never been more stable or affordable. Now is the time for us to invest in our system in a way that customers can afford. Ultimately, these affordable investments lead to attractive returns for you, our investors, and we're thankful for your support in enabling this work and for making Michigan safer.

Our consistency and predictability are the hallmark of our financial results every year. Part of what makes us consistent is our ability to adapt to changing external conditions. With the gubernatorial elections next month, I know many of you may wonder what will change in Michigan and for CMS Energy. Regardless of who's in office, we have proven that we are able to work with everyone. When we stand for Michigan, people want to stand with us. While we can't predict the results, I can tell you we know the candidates well, and look forward to working with new governor to serve the citizens of Michigan.

As slide seven shows over the years, we've seen governors from both parties in the makeup of our commission change, and have experienced varying economic and weather impact as well. But regardless of all those sectors, we have an ability to deliver consistent financial performance year after year after year after year.

With that, I'll turn the call over to Rejji.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Thank you, Patti, and good morning, everyone. As Patti mentioned, we're pleased to announce our strong results for the first nine months of the year with adjusted earnings per share of $1.93, up 16% in the comparable period in 2017. On a weather-normalized basis, earnings per share for the first nine months were down 6% versus the same period in 2017, partially due to the execution of operating pull aheads over the past few quarters, given the weather driven and cost savings upside realized to date.

Patti touched on a couple of examples already, such as tree trimming and our pipeline integrity program, which delivers safely and reliability benefits to our customers. We've also pulled ahead additional gas pipeline maintenance work, improved the reliability of our system and minimized gas leaks while opportunistically refinancing select bonds apparent (ph) among other customer and employee initiatives to derisk 2019.

For the third quarter, we reported earnings per share of $0.59 per share compared to $0.62 per share for the third quarter of 2017. As noted, given our solid performance to date, we've raised the low end of our 2018 adjusted EPS guidance range, and our revised range is now $2.31 to $2.34 per share. All in, we are well ahead of our plan and we'll continue to look for reinvestment opportunities in the fourth quarter, including both operating and non-operating pull aheads to improve our likelihood of success in 2019 and beyond.

As you can see on the waterfall chart on slide nine, weather has positively impacted our year-to-date results by $0.42 per share, with more than half of that coming from last year's full weather rolling on. As you'll note, the cost savings bucket is strong from $0.10 per share of positive variance through the second quarter to $0.03 per share for the first nine months due to the aforementioned reinvestment strategy and heavy storm activity, but we continue to see lower benefits expense and other operational efficiencies.

The weather and cost performance related upside have also been supported by $0.06 of higher rate relief, less investment cost relative to 2017. These sources of positive variance have been partially offset by the absence of favorable tax benefits realized in the third quarter of 2017, and by lower non-weather sales, largely driven by our expanded energy efficiency programs. It is worth noting, that reductions in customer usage attributable to our energy efficiency programs are trued up in rate cases through updates to our sales forecast.

Given our sizable reinvestment opportunities this year, we have highlighted some of those levers that we have already pulled and some that are in process in the table in the right-hand side of this chart. But needless to say, we always proceed with caution in this regard, particularly late in the year in the event we have mild weather and/or unforeseen storm activity among other risks.

As we look ahead to the balance of the year, we are not awaiting any further regulatory outcomes in 2018, given the recent uncontested settlement of our gas case in August with $11 million revenue increase and a 10% ROE. So, as mentioned, we will be acutely focused on operating and non-operating pull aheads for the balance of the year to the benefit of customers and investors.

As we turn the page on the regulatory calendar for 2018, we continue to parallel paths three major items. There is our pending electric case where we filed a revised revenue request of $44 million as part of the rebuttal down from $58 million, largely due to a decrease in contingency estimates for select capital investments and lower realized debt financing costs. As always, we're eager to pass on these savings to customers to minimize the amount of our rate reflect.

We expect the proposal for decision or PFD from the administrative law judge in late December, and a final order from the commission in March of next year as soon as settlement. In regards to the IRP, when the evidentiary phase the process, the MPSC staff and other interveners recently filed their testimony in mid-October, which we found largely constructive, and we expect a final order from the commission around the second quarter of next year.

Lastly, we'll look to file our next gas case with the revenue request of about $245 million, which reflects our continued prioritization on safety and upgrading our gas system while we remain in an environment of historically low natural gas prices.

Slide 11 highlights some of our key gas infrastructure projects and the significant investments we will continue to make to improve the safety an d reliably of our gas distribution system. We had steady ramped up our focus and spend in this area by building a skilled and dedicated workforce as Patti noted, by identifying and prioritizing key areas on our system that are need of upgrading, and by finding ways to offset much of the build impact to customers by capitalizing on a low natural gas prices and through other cost reduction initiatives.

As part of our pending gas rate case filing, we plan to replace approximately 25,000 vintage service lines in roughly 140 miles of distribution mains among our programs. We're also planning to inspect and remediate if necessary over 950 miles of pipeline. It is worth noting that many of these maintenance and inspection programs that we have in place are routine annual activities and have been incorporated in previous investment recovery mechanisms or trackers approved by the commission. Lastly, we'll be expanding our capacity to deliver gas in our system to accommodate customer requests in future load growth.

Slide 12 illustrates our emphasis on gas as evidenced by our five-year capital plan of $10 billion, roughly half of which is comprised of gas infrastructure investments. We continue to focus on the needs of our aging gas systems as reflected in the forecasted material increase in gas as a percentage of total rate base to 40% from 30% over the next five years, as highlighted in the chart on the right-hand side of the page. The balance of our five-year capital plan consists of substantial electric distribution investments in accordance with our five-year electric distribution plan filed in March and increased investments in renewable generation as per our integrated resource plan or IRP.

Our capital investment needs remain significant beyond the five-year period as well. As we look -- as we work through regulatory proceedings in our financial planning cycle, we expect that the longer-term capital mix will continue to evolve and we look forward to providing an update to our 10-year capital plan in 2019 once we had better visibility on our long-term capacity plan.

As we've highlighted in the past, the primary constraint on the pace at which we invest capital is customer affordability, and we are confident that we can continue to deliver cost reductions to minimize customer bill increases.

On the gas side, our numerous capital investment programs will enable reduced maintenance costs on items such as leak repair among other benefits, reduced gas O&M cost coupled with our expectation of relatively flat natural gas prices that are minimized through our purchasing and storage strategy among other cost reduction initiatives keep customer bills affordable. We've experienced such success in the past as evidenced in the chart on the lower right-hand side of slide 13.

Since 2013, our gas bills have declined by over 25% relative to inflation despite approximately $4 billion of aggregate investment over that period. In the electric business, we will benefit from high price power purchase agreements rolling off over time, while also realizing fuel and O&M expense savings as we retire our coal fleet.

Our power supply related savings will be supplemented with continued electric system upgrades which will reduce service restoration expenses among other benefits. For the consolidated entity, our efforts on waste elimination through the CE Way continue to bear fruit across the organization, and we continue to benefit from attrition management in non-operating savings from opportunistic refinancings and tax planning.

Speaking of taxes, on October 1, we filed a proposal to return approximately $1.6 billion of deferred taxes to utility customers over the next several decades, in accordance with the federal tax code. As a reminder, the total impact of federal tax reform will deliver an estimated 1% rate reduction opportunity, and every 1% reduction in customer rates generates about $400 million of incremental capital investment capacity for the benefit of customers and investors.

As we look prospectively at the consolidated business, unsurprisingly our growth continues to be driven by our utility with its robust capital needs on both the gas and electric systems and forward-looking filings such as the IRP, and our five-year electric distribution plan provide long-term transparency to the MPSC and other key stakeholders, which should provide more visibility regarding regulatory outcomes in the future.

Outside of the utility, we'll continue to operate our existing enterprises fleet with a low risk mindset and take advantage of its attractive contract and renewable opportunities like the recent wind PPA with valued customers like GM. When we couple our utility earnings contribution with contracted non-utility growth and prudent financial planning, you can see why we have confidence in our ability to continue to grow at 6% to 8% over the long term.

And with that, I'll turn the call back over to Patti.

Patricia K. Poppe -- President and Chief Executive Officer

Thanks, Rejji. In summary, our investment thesis is driven by a large and aging system in need of capital investments, a growing and diverse service territory, a constructive regulatory statute, a unique self-funding model that is enhanced by the CE Way and tax reform, and a healthy balance sheet to fund our plan cost effectively. We are confident in our ability to deliver consistent industry-leading growth and superior total shareholder return over the long term as we do the worrying for you and adapt to changing conditions.

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

Questions and Answers:

Operator

Thank you very much, Patti. (Operator Instructions) And our first question today comes from Michael Weinstein of Credit Suisse. Please go ahead.

Michael Weinstein -- Credit Suisse -- Analyst

Hi, good morning.

Patricia K. Poppe -- President and Chief Executive Officer

Good morning, Michael.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Good morning, Michael.

Michael Weinstein -- Credit Suisse -- Analyst

What's the -- I'm certain as to what's the base the 6% to 8% for 2019 is based off of?

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Yes. So, Michael, this time of the year when we give guidance in Q3, it's always predicated effectively on the midpoint of our revised guidance. And so, as Patti noted, our revised 2018 guidance is $2.31 to $2.34 per share, and so that's what it's driven off of. But as you know as we get actuals over the course of the fourth quarter and provide our fourth quarter earnings call, we'll likely revise that number.

Michael Weinstein -- Credit Suisse -- Analyst

Got it. That's off a midpoint now of the end in other words, right.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Precisely.

Michael Weinstein -- Credit Suisse -- Analyst

Right. And then can you just give us kind of an overview of what you intend to update at EEI this year? What are the categories of things it will be updated at that point?

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Yes. It should be more of the same, Michael. I mean, we generally try to avoid surprises. And so if I could characterize some of the topics that will likely come up, we'll talk a bit more about the progression of some of our regulatory items. So there is the pending gas case which should be filed at that point. There is electric case which continues to progress. And then there is the IRP which is in the evidentiary phase.

So we look forward to providing updates on that. Always happy to talk about the capital mix, and what we're seeing there, and then opportunities to continue to save costs and reduce our cost structures to perpetuate the self-funding strategies. So those are, I think, the variety of topics we will cover, and we'll have visibility at that point as well on the electoral front and what's taking place in the political side in Michigan. So I think all those will be things we will cover, but I don't expect a whole lot new beyond that.

Michael Weinstein -- Credit Suisse -- Analyst

Are there any significant impacts that you should perceive from the election, if it goes one way or the other, or do you expect -- you work well with no matter who wins at this point. And one thing I've heard is that property tax might become an issue in legislature during potential lame-duck session. Is that something you understand?

Patricia K. Poppe -- President and Chief Executive Officer

Yes. So there's a couple of things. First, on the elections themselves, as we said we're very comfortable with either the gubernatorial candidate. We do have term limits in Michigan, so it does result in a lot of turnover in the house and the Senate. But good news is we passed that statute in 2016 and with large bipartisan support. So the idea of revisiting that would be a pretty long thought I would suggest. But the governors -- the new governor will obviously be able to appoint a new commissioner when Norm Saari's term ends mid-year next year. And the way the statute is written that establishes our commission and our commissioners and their term really prevents what I would describe as shenanigans as a result of elections.

We are very comfortable with the terms that are in statute there, the number of parties represented on the commission as in statute. So the idea that the new governor would replace norm is very predictable, and they're six months into their new term, and so we will have an opportunity to help understand what the requirements and needs are of that new commissioner. So we're just not too concerned with any effect of the elections.

On the property tax, yes, we've been working with the Senate. They passed a bill proposed on what's called PPT, personal property tax, in Michigan. When this Michigan tax reform happened, I think, back in '12, the utilities were exempted from the reform on PPT. And so we're suggesting that future increases would be capped. And so we're working on that. I think, it will be good for customers. When we think about the cost tax for customers, taxes are in there. So any time that we can reduce the tax liability actually for our customers, it is good for Michigan. So that's why we are working on that. I wouldn't hazard to guess that whether we will or won't pass, but it is something that we think will be good for customers, so we are for it.

Michael Weinstein -- Credit Suisse -- Analyst

Got you. Okay. Thank you very much.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Thank you.

Operator

And our next question today comes from Jonathan Arnold of Deutsche Bank. Please go ahead.

Jonathan Arnold -- Deutsche Bank Securities, Inc. -- Analyst

Good morning, guys.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Good morning, Jonathan.

Patricia K. Poppe -- President and Chief Executive Officer

Good morning, Jonathan.

Jonathan Arnold -- Deutsche Bank Securities, Inc. -- Analyst

Good to know that you're riding the roller coaster for us. So just thank you.

Patricia K. Poppe -- President and Chief Executive Officer

That's right. Rest easy, Jonathan.

Jonathan Arnold -- Deutsche Bank Securities, Inc. -- Analyst

Question, Rejji, you mentioned that you would potentially, I forgot the exactly word you used but you know you would perhaps update the 10-year capital plan next year once you have some of the regulatory proceedings further along. Would that -- are you talking about sort of rolling it forward because it will be further out in time sort of fleshing it out or potentially it might change sort of in some quantitative fashion?

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Yes. So it's a little of both. There would be a roll forward of the timeframe, but also we would likely increase the capital plan. We just don't know the extent to which it will increase. We talked about in the past the benefits of tax reform and how it's created incremental capital investment capacity to the tune of about $1.6 billion, but we also think that the IRP as well as other capital investment opportunities across the gas and electric distributions create opportunities as well.

And so we know that there's a nice backlog of capital investments. But as I said in the Q2 call, we want to make sure that we can afford, and I say, we, meaning our customers as well as our investors in the balance sheet can afford to accommodate capital investments, let's say, something in excess of $18 billion which was the old plan. And so we want to make sure we get the math right, and also get visibility on some of the regulatory proceedings that I covered. So that's really the gating item and then we'll effectively cover with a new capital plan.

Jonathan Arnold -- Deutsche Bank Securities, Inc. -- Analyst

Okay. That was really all I had. Thank you.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Thank you.

Patricia K. Poppe -- President and Chief Executive Officer

Thanks, Jonathan.

Operator

And our next question today comes from Stephen Byrd of Morgan Stanley. Please go ahead.

Stephen Byrd -- Morgan Stanley -- Analyst

Hey, good morning, and congratulations on continued good results.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Thanks, Stephen.

Patricia K. Poppe -- President and Chief Executive Officer

Thanks, Stephen.

Stephen Byrd -- Morgan Stanley -- Analyst

We had a terrible explosion in the Northeast earlier this year, and I was just curious if there were any lessons learned or any changes in thinking in terms of gas safety spending or any other sort of operational adjustments you would make or updates you'd make based on lessons that may have been learned from those explosions.

Patricia K. Poppe -- President and Chief Executive Officer

Yes. Thanks for asking, Stephen. Obviously that was a serious situation and we have been very closely linked. In fact, we have about 30 folks who are out in Massachusetts right now assisting. I understand they're going to be coming home safely to us today. So we're wishing them a safe trip home. But we've looked closely. Our system configuration has one distinct difference between medium and standard pressure. We have relief valve that would prevent in an overpressurized situation, overpressurizing that low-pressure system. And so we do think that it's an important feature that we have designed into our system.

I would say from an investment standpoint, however it is -- the enhanced infrastructure replacement program, which is our investment recovery mechanism for gas investment for our mains and now our vintage services. It's critical to this part of the system. And so we would -- in fact, a couple of years ago, we established our own public safety goal -- breakthrough goal that we've been working to replace more vintage services and we do more inspections than are required by PHMSA on both high consequence and non-high consequence areas just because we know that safety of the system is so important.

And given the commodity prices now customers more now than ever can afford these investments to make the system safe. And it's really a unique point in time where we can do the right thing for the systems and we don't have to trade off affordability for the magnitude of investments that we're doing. And so, again, we're thankful for our investors who make it possible to do that work here in Michigan.

Stephen Byrd -- Morgan Stanley -- Analyst

That's really helpful color. And Patti is it your sense that the gas utility industry as a whole is going to respond with a number of proposed changes that could sort of result in a wave of updates of spending or is this more sort of each utilities going to approach this based on their own sort of unique circumstances? How broad, I guess, is my question in terms of updates or changes that you see from the industry as a result by these explosions?

Patricia K. Poppe -- President and Chief Executive Officer

I think there could be revised regulations particularly as it relates to PHMSA and remotely controlled valve configurations. Right now, a lot of times on our distribution systems across the country, it's not remotely controlled. We might have monitoring in place, but we can't control. And so there might be some potential regulations that would result in added investment across the country and across the system.

I think for us when we think about our six to eight, it would have to -- it will fit into our existing capital plan. I don't think it changes anything about our outlook. We would be prioritizing. Obviously, safety is always number one in the investment prioritization and meeting all regulatory requirements. So, I think, again it all hinges on the fact that safety is the overriding priority and potentially new regulations I think are possible, Stephen.

Stephen Byrd -- Morgan Stanley -- Analyst

That's really helpful. And if I could, maybe just one last one on electric vehicle infrastructure. Patti, I was just curious if you wouldn't mind giving us your latest thinking on the pace of that spend, the sort of the regulatory steps or any other sort of thought you might have about how you're going to rollout EV charging infrastructure.'

Patricia K. Poppe -- President and Chief Executive Officer

Yes. So this is the near and dear subject to my heart, Stephen, is the culture on the EEI electric transportation committee. I have been obviously paying close attention nationally, but here at home, we filed for $7.5 million infrastructure. So for EV and our latest electric rate case, the commission did a great job of convening parties ahead of that filing, so we could have some alignments about it. And so I'm thankful for their hard work on that and the conversations that occurred ahead of our filing.

We feel good about it. But as I have shared with you, Stephen, and with others, the idea that electric vehicle infrastructure is a huge capital play, I don't necessarily agree with that. I do think that it's an important component of the electrification strategy. And as long as EVs are not charged on peak, then it net and net reduces the unit cost of energy for all citizens. And so there's benefit for all for enabling the EV infrastructure. But I'll tell you in the Detroit Free Press, there was an editorial this week, or maybe it was Crain's in Detroit. There was an editorial of a guy who bought an electric car and all his angst of getting around Metro Detroit to get charged. And in fact, he had his wife following him in his car, so he didn't run out of charge. So there's infrastructure required for sure. It hit the press this week and so I'm sure we'll have continued support to get that infrastructure built out. And faster is better. Emission-free vehicles fueled by emission-free power is really our long-term vision.

Stephen Byrd -- Morgan Stanley -- Analyst

Very good. Thank you very much.

Operator

And our next question today comes from Greg Gordon of Evercore. Please go ahead.

Greg Gordon -- Evercore Group LLC -- Analyst

Thanks. Good morning, guys. Hi, Patti.

Patricia K. Poppe -- President and Chief Executive Officer

Good morning, Greg.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Good morning, Greg.

Greg Gordon -- Evercore Group LLC -- Analyst

Most of the -- I think that the hugely salient questions have been answered. At EEI, are we going to get a 2019 visibility on what you're thinking about DIG?

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

No. Greg this is -- so you mean in terms of whether we'd be in the utility or just performance --

Greg Gordon -- Evercore Group LLC -- Analyst

I mean the slide 22 has the '18 guidance and then the aspirational guidance, but it doesn't give us insight into what you're actually seeing and how it's contracted or what you expect market revenues to look like for 2019.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Yeah. So we generally have pretty conservative assumptions around capacity sales at DIG which do make up a decent portion of its revenue. But I'll say that the majority of its revenue is already locked in through energy sales forward through 2023. And so we tend to believe that there will continue to be a little bit of softening on the front end of the bilateral capacity market, and so we have pretty conservative assumptions around kilowatt per month assumptions.

And then, generally because of the pace at which I'll say the decision around the local clearing requirement in Michigan is progressing where we're now filing appeal from the Court of Appeals' decision that the commission didn't have an authority to set the local clearing requirement. We think it's going to be a while before you see outcomes like we're highlighting on the right-hand side of that chart, where you're seeing $4.50 to $7.50 per kilowatt month. And so, I'll say, our expectations are tempered, but as you think about our 2019 EPS guidance of $2.46 to $2.50 per share, we generally -- I think, we'll get about $0.01 of contribution from enterprises that supports that growth. And so we do still expect decent growth from enterprises, but we're pretty tempered in our expectations around capacity sales. Is that helpful?

Greg Gordon -- Evercore Group LLC -- Analyst

Yes. Thank you very much. And then the economic conditions and market conditions, interest rates, et cetera, obviously they don't really have a direct impact on how you plan for the utility, but can you tell us what's going on in EnerBank and whether -- I know it's also a very small contributor, but the bank stocks have been behaving like economic conditions for their business have worsened. I just wonder what you're seeing there?

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Yeah, I'd say in general, EnerBank continues to perform well. And so we assumed in our guidance for 2018 about $0.15 of contribution from EnerBank. We think they are in that ZIP Code. I will admit that the competitive environment has intensified a bit in that sector. And so we are feeling a little bit of pressure associated with that. But if you look at the quality of their portfolio in terms of average FICO scores, the annual growth and then our expectations going forward, we still think the business will continue to perform as it has in a variety of different cycles. And so EnerBank continues to trend along nicely, and we haven't seen much erosion in terms of the portfolio of FICO scores or any of that stuff you see when competition intensifies.

Greg Gordon -- Evercore Group LLC -- Analyst

Thank you. Have a good day. See you.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Thanks. See you.

Patricia K. Poppe -- President and Chief Executive Officer

Thanks, Greg.

Operator

And our next question today comes from Andrew Weisel of Scotia Howard Weil. Please go ahead.

Andrew Weisel -- Scotia Howard Weil -- Analyst

Thanks, good morning, everyone. Question for you on the reinvestment, there is a lot of detail, and a lot of impressive numbers here with the $0.24 that you flagged out in the waterfall chart on page nine. The question is when I think about reinvestments relative to weather, it looks like versus normal, the weather year-to-date impacts has been around $0.20 benefit. So maybe you could talk a little bit about the budget perspective there, where those extra $0.04 are coming from and I believe that's outside of cost savings, maybe you could just elaborate a bit more on some of those reinvestments and how that might impact 2019?

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Yes. So, a couple of things I'd say. So we're -- obviously at this point, we're well ahead of plan. I'd say we're over $0.20 ahead of plan, and so we have been busy putting a lot of dollars to work as we have really started in Q2 once we had a very nice winter for the gas business early in the year and then a very early start to the summer. And so with that upside, we put quite a bit to work. And so that $0.24 that you see on the right-hand side of slide nine, it represents spend that we've put to work in some regard and then spend to come. And so we expect by the fourth quarter, you'll see a pretty significant expansion of operations and maintenance spend attributable to those pull aheads.

And so that offers a couple of benefits. So one obviously it reduce potential cost in 2019. That's the definition of pull aheads. You're spending money now that you don't have to spend next year. So there's risk mitigation in that. But also as you think about the bridge that allows us to grow another, let's say, $0.16 of thereabouts when you think about our guidance in 2018 versus our guidance in 2019. Those are now all sort of discretionary, I'll say, items that we're pulling ahead this year that we may not have to go and do next year.

And so when you think about the path to delivering another year of 6% to 8%, you're going to lose the benefit of $0.20 of good weather that we had in '18, and we plan for normal weather. But that will be offset by rate relief net of investments which should give us about $0.10 to $0.14 of upside based on our expectations. You'll get about as mentioned about $0.01 from enterprise, about another $0.01 from EnerBank for growth. And then you're going to have about $0.24 of discretionary activities you took on in '18 that you don't need to take on in 2019. And so all of that should bridge us very nicely to a very good glide path of 6% to 8% growth.

Andrew Weisel -- Scotia Howard Weil -- Analyst

Got it. That's very helpful. Thank you.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Thank you.

Andrew Weisel -- Scotia Howard Weil -- Analyst

This might overlap with that question, but the same waterfall chart, usage, enterprises and other year-to-date is down $0.24 year-over-year. But when I look at the reconciliation at the end, it looks like enterprise is a kind of flat and corporate and other is kind of flat. So I can't imagine $0.24 of usage impact. Maybe you could elaborate what else is going on in there?

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Yes, there's quite a bit, and it's a bit of catch-up. But I will say that $0.24, about half of that is usage. So, call it, $0.13, and that's because we have seen at least a little bit of softening in our non-weather sales performance. But it's interesting. I think, the data that we highlighted in our, effectively, the last page of our supporting financial document is a touch misleading because it's weather normalized which is an imperfect science.

And so just to go through the numbers, when it comes to non-weather sales, we're about 0.5% down year-to-date. But remember not only is that math weather-normalized, but it's also shown net of energy efficiency. And so if you think about the programs we have in place for energy efficiency, we're compensated to reduce customer usage about 1.5% from the prior year. And so if you gross up that 0.5% for the effects of energy efficiency, we're actually up about 1%. And then within the customer classes, we actually see pretty favorable mix which has been the trend we've seen over the course of the first three quarters. So, residential is up about 0.5%, again weather-normalized net of energy efficiency. And so when you grow setup, we're actually up about 2% year-to-date, and that's higher margin of course of our customer classes.

Commercial is flat year-to-date. And so if you gross that up again, we're up about 1.5%. And then admittedly the laggard has been industrial, which is our lowest margin portion of customers and that's down over 2%. But grossing that up, it's down about 0.5%. So I think industrial is one place we've underperformed and that's what you're seeing, and some of that customer usage that's flowing through that $0.24. But even within that, I think the key question you asked on the industrial side is our underlying economic conditions in our service territory softening, and the quick answer to that is we don't believe so.

We continue to see good economic factors in the Grand Rapids area which is in the heart of our service territory, and I always look at the cycle build sales, particularly in our most energy-intensive segments within again our electric service territory. So food manufacturing is up year-to-date about 9%. So that's trending quite well. Transportation equipment is up approximately 6%, and then fabricated metal products is up over 4%. And so again some of our most energy-intensive sectors within our service territory continuing to trend quite well, and so I still think the economic conditions are quite good. And so even though we've been a little disappointed in non-weather sales, I think there's a nice come back story. And so we continue to do well and we expect the future to look quite bright as well.

The other thing that's in that $0.24, and then I'll pause and breathe is that we have the absence of a tax benefit that we realized in Q3 of last year. That was about $0.07, and so that is obviously no longer flowing through and that was impacting the cons. So if you take the absence of the tax benefit coupled with non-weather sales, those two really represent the vast majority of that $0.24.

Andrew Weisel -- Scotia Howard Weil -- Analyst

Great breakout, and certainly good from a mix perspective when you talk about the different customer classes. My last question is the rate case filing coming up early next year, I believe you set a $245 million rate increase, but with a bunch of offsets. Can you maybe elaborate a little bit of maybe what the total impact the customer bills might look like and how much of that comes from the lower commodity versus cost cuts versus whatever else might be in the plan?

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Yes. So, we are still finalizing the case, but we do think obviously on a base rate perspective before you take into account the commodity cost, you are going to see an increase in base rates. We're still working through that math. But when you do take the commodity cost into account, we do think that you'll probably see a customer bill impact that may be a little higher than inflation case relative -- with this case relative to the last case. But at the end of the day, the impact on customers bills, particularly at the residential level is about $2 per month. There is something of that ZIP code. So, at the end of the day not material increases for customers.

And when you think about the benefits of those capital investments, as Patti highlighted, we prioritize safety and reliability. And so we do think it's certainly worth the cost to make sure that we're being very proactive in our pipeline maintenance as well as our vintage service programs and enhanced infrastructure replacement programs. So we think the cost is certainly worth. First, we don't think the cost is a great deal, but we think the benefits certainly exceed the cost.

Andrew Weisel -- Scotia Howard Weil -- Analyst

Sounds great. Thank you.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Thank you.

Operator

And our next question today comes from Julien Dumoulin-Smith of BoA Merrill Lynch. Please go ahead.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Hey, good morning, everyone.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Good morning, Julien.

Patricia K. Poppe -- President and Chief Executive Officer

Good morning, Julien.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Hey. So I wanted to follow back up on the IRP filing here. And I know we chatted about it a little bit. Just wanted to talk a little bit more with respect to age. So, logistically, the timing when you think in 2019 will come up with the next update. If I look right, like the second quarter '19 with an order there, you would imagine you'd be in a position by third quarter to get an update there?

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

We will -- Julien, we'll see. I mean obviously we expect to get a decision here. We're going to get a decision within 10 months. So that will be in April time frame and then we get an opportunity to react to that. So we should get a resolution on the IRP in June of next year, but we'll also get some visibility prior to that. And so I don't want to sit and represent that we'll provide guidance on a new capital plan in Q3 maybe sooner than that. And then we'll also have to see how things are progressing with our pending cases. So I think it's a variety of things we'll have to see on the regulatory front that will dictate the timing. I would like to think it's Q3 at the latest, but it may be sooner than that. So we'll see.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Excellent. And can you elaborate a little bit more about some of the nuance of the IRP docket a little bit, maybe some of the changes and how you think about the needs assessments moving around? And I supposed if you will, like any of the nuances that you'd be paying attention to there?

Patricia K. Poppe -- President and Chief Executive Officer

Well, we're very excited about the IRP, Julien. It's a great construct the way it's designed. So we filed the IRP this fall where and as Rejji mentioned 10 year -- 10 months out, we'll get early indicators from the commission on the record, and then we have 60 days to expand and we can make adjustments. What we filed in our IRP has very little financial impact in the first three years of the IRP, but it does include an important resolution to PURPA, here in Michigan.

And setting of weighted costs for PURPA is important across the country, but the commission has stated clearly and reiterated most recently that the IRP is a vehicle that they will use to establish a mechanism for setting of weighted costs for PURPA qualifying facilities and for establishing whether a utility has a need, therefore qualifying facilities would be added to the system. And so our competitive bidding proposal combined with the financial compensation mechanism are earning on a PPA will get concrete feedback from the commissions through this filing.

And so, we're looking forward to hearing that. The staff's position recently published shows support for the thinking. Of course, there's a range in the financial compensation mechanism between the staff's position and our own. But that's not unlike a range in an ROE between the staff position in the company. There's a process and potentially a settlement on the table to be able to come to resolution on that issue. So we're excited about what it holds for Michigan and we're excited about the future, because of what we've been able to publish through that IRP.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Got it. Right. So I think, I just heard it from you. Do you think you can settle that issue?

Patricia K. Poppe -- President and Chief Executive Officer

It's possible. Settlements are hard sometimes. Particularly in this IRP, there's a lot of parties, there's a lot of people engaged. I think we have a proven track record on settlements, but this one would be complicated. And frankly, the 10-month time clock is just fine with us, and so I would say, I wouldn't put in over or under on that. I would just suggest that we'll work toward a settlement, but if we can't get one, we are very comfortable going to a commission order on the IRP.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Excellent. All right. All the best, guys.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Thank you, Julien.

Patricia K. Poppe -- President and Chief Executive Officer

Thank you, Julien.

Operator

And our next question today comes from Praful Mehta of Citigroup. Please go ahead.

Praful Mehta -- Citigroup Global Markets, Inc. -- Analyst

Thanks very much. Hi, guys.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Hi, Praful.

Patricia K. Poppe -- President and Chief Executive Officer

Good morning, Praful.

Praful Mehta -- Citigroup Global Markets, Inc. -- Analyst

Good morning. So again, lots of questions are answered which is great. I guess, I wanted to touch on the weather impact, and weather normalize clearly there is like on slide eight I see $0.47 versus the $0.59 that you had with the weather benefit. I guess given the rising temperatures and the impact of just some form of continuous increase in heat, it's a definition of weather-normalized something that will change you think over time, and does that impact you guys at all, if the assumption of load just changes given weather. Is that something you think about?

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Well, certainly I have been critical in the past of just the calculation itself. I think, as I've said before it's a very imperfect science to weather-normalize, but yes, I don't think the work we do to weather-normalize our performance or across the sector will change anytime soon. And obviously, when it comes to planning, we do plan for normal weather. And when we say that, we look at the last 15 years, and so we don't just take a couple of years, we look 15 years, over a decade, around a decade and a half of weather trends to make sure we're thinking the right way about our plans for the future. And so, you know, yes, we've been wrong, and we've outperformed in some cases. In some cases, we've underperformed and that's what averages represent. And so, again, we feel like we have a pretty long-term point of view when it comes to weather normalization, and we'll try to be mindful of the near-term trends, but not overreact to them. Is that helpful, Praful?

Praful Mehta -- Citigroup Global Markets, Inc. -- Analyst

Yes, no, that is. But I guess what I'm also thinking about is if the definition changes as and if the weather-normalized number just goes up over time, is that an impact to you guys from an earning potential perspective given the denominator that the regulators use to kind of define rates just goes up?

Patricia K. Poppe -- President and Chief Executive Officer

Praful, I would suggest that if you look back, you don't even have to go back as far as 2015 or 2014. You see dramatic weather differences the opposite direction. So, it really isn't -- I wouldn't suggest that average temperatures are rising. I would suggest that there is temperature variation and we can see that in our actual results over the last couple of years. You don't have to go far back to see a mild winter and a hot summer, or a mild summer and a hot winter, because we're gas and electric. Weather has a longer-term effect on us, and sometimes evens itself out between the two commodities.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Yes, and the only other thing I'd mention, Praful, is remember when we file our rate cases we do take into account sales forecasts. And because of the nature or pace at which we file, which is really on a serial or annual basis, we do reflect our latest sales forecast. And so you just have that natural true-up or correcting mechanism every time we file rates and get rate orders.

Praful Mehta -- Citigroup Global Markets, Inc. -- Analyst

Yes. No, that's a great point. Thanks for that. And I guess just quickly, it won't be complete without a question on EnerBank. You already mentioned EnerBank is performing pretty well even through this at least uncertain time for banks. I guess, is there any view that if CapEx plans increase and the opportunity to grow the utility side increases, again, I'm just asking the strategic question, the fit on EnerBank and if that is something that would be considered at some point?

Patricia K. Poppe -- President and Chief Executive Officer

Yes. As we've said before, Praful, EnerBank, nothing has changed with our point of view on EnerBank. It is in the same place that it has been. We don't put additional dollars into EnerBank itself growing and it plays its role in the system. Someone would have to pay the right price for us to sell EnerBank.

Praful Mehta -- Citigroup Global Markets, Inc. -- Analyst

Fair enough. Well, I appreciate it. Thank you, guys.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Thank you.

Patricia K. Poppe -- President and Chief Executive Officer

Thanks, Praful.

Operator

And our next question today comes from Travis Miller of Morningstar. Please go ahead.

Travis Miller -- Morningstar -- Analyst

Good morning. Thank you.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Good morning.

Patricia K. Poppe -- President and Chief Executive Officer

Good morning, Travis.

Travis Miller -- Morningstar -- Analyst

I was just wondering on the electric case, you talked about the settlement possibility in IRP. What about the settlement possibility in the electric case and how far apart do you think you are in terms of reaching a middle point for a possible settlement?

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

So, we have been having, in fact, I think we have another iteration today, and so we've had very productive settlement discussions today. When we think about the numbers where we are right now, as I mentioned in my remarks, we're at $44 million of deficiency. That presupposes a 10.75% ROE, the staff is at almost a $100 million difference at $44 million sufficiency. And so when you think about that delta of $100 million, it seems like you could drive a truck through it. But if you normalize for ROE and just go to the current ROE, and I'm not conceding that 10.75% is not what we think the ROE should be, but let's just say hypothetically do that math, you close the gap about $60 million.

And then if you take capital structure into account, we're at 52.5%. I think the staff is just under 52%, and kind of normalize that to where it is currently across gas and electric that gives you another almost $10 million. And so you normalize for current ROEs and current capital structures, you close the gap pretty materially. And so because of that, we are cautiously optimistic that there could -- that we could settle, but as Patti highlighted in the context of the IRP, any of the electric-related proceedings are quite complicated. There are a lot of moving pieces and there are a lot of interveners. And so we are cautiously optimistic, but much too early to spike the football at this point. So, we'll see where we go.

Travis Miller -- Morningstar -- Analyst

Okay. Great. And then you talked a little bit here about regulatory outcomes in the near-term that impact your capital spend outlook. What is that kind of -- if you get a good decision, what does that mean, if you get a bad decision, what does that mean just in terms of range of potential capital plans over the five-year or 10-year period?

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Yes. So I think the absolute amount of capital investments we have whether it's five or 10 years, I think that will certainly on a five-year basis remain consistent. So right now, we're kind of just over $10 billion across the next five years. What will change as a result of regulatory outcomes is potentially the composition of that quantum of capital that we plan to invest over the timeframe.

And so for example, if we see and I don't foresee this, but let's say, we get a gas outcome that we view as sub-optimal, well then that may increase our emphasis on some of our renewable investments or potential electric distribution investments and vice versa. And so it really is a function of how we're trending on the various regulatory fronts which could change the composition of the capital investment program, but not so much the quantum.

And then as I think longer term, then obviously the quantum could expand as I highlighted earlier, and so we think that will certainly be above the $18 billion, 10-year plan that we proposed in our September of 2017 investor conference. And so that number will come up -- will go up, but again it's a function of how we trend in the longer-term items such as trackers, the IRP and so on.

Travis Miller -- Morningstar -- Analyst

Okay, great. Appreciate it.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Thank you.

Operator

And our next question today comes from Vedula Murti of Avon Capital. Please go ahead.

Vedula Murti -- Avon Capital -- Analyst

Good morning.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Good morning.

Patricia K. Poppe -- President and Chief Executive Officer

Good morning.

Vedula Murti -- Avon Capital -- Analyst

I apologize if you addressed this. You may have, I think, in your discussion with Julien. But what's your current feeling about the prospects within the IRP process to achieve the type of tracker that you've been seeking? As I recall, I think the initial staff testimony was not particularly supportive of what you were requesting if I'm correct about that. If you could please address that?

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

So, Vedula, are you referring to a tracker or is it -- because we don't really have a tracker embedded in our IRP, is it some other aspect of the IRP that you --

Vedula Murti -- Avon Capital -- Analyst

Then, I apologize if it is outside the IRP, I was referring specifically to the tracker, capital tracker.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

The five-year --

Patricia K. Poppe -- President and Chief Executive Officer

Maybe you're describing the five-year distribution tracker we filed for in our electric rate case.

Vedula Murti -- Avon Capital -- Analyst

Yes.

Patricia K. Poppe -- President and Chief Executive Officer

So, again as Rejji was just describing, we're working toward settlement on that. We've had a lot of regulatory filings in Michigan as a result of the energy law in 2016, not necessarily rate filings, but regulatory proceedings. And so, there has been a desire to find a way to go in less often. And so we offered to stay out of rate cases just for a couple of years with the implementation of this long-term tracker on our distribution system. It's a $3 billion proposal. That's the pretty big ask for the commission to approve all of that spending.

So we're not -- I wouldn't put my bets on getting that full tracker approved. The staff has expressed our concerns about that full tracker, but perhaps a portion of it much like our gas, in our gas cases, we have an enhanced infrastructure replacement program tracking mechanism. And that has worked out very well. It allows us to do longer term contracts with our contract providers. We're able to do a work plan that's more robust and reliable. We can eliminate waste in the system because we can plan ahead more effectively.

So we're a fan of that kind of tracking mechanism. And we think that the detail provided in our five-year distribution plan was sufficient to support and maybe a portion, maybe it would be substation maintenance or maybe pole replacements or something like that as a first step toward longer term getting to a full capital tracker. But certainly, we support the idea of the full capital tracker, but I wouldn't expect that it will fully be approved.

But just keep in mind, that just means that we continue to come in annually like we do. We have good outcomes from our regulatory filings and we're continuously improving our quality of those filings and we've seen good outcomes, and we feel good about going in annually if we need to, to make sure that we can make the necessary investments on behalf of our customers, and pass along cost savings that we realize throughout the year.

Vedula Murti -- Avon Capital -- Analyst

So, you seem to be expecting that you could achieve a portion of this, but that it would still entail probably coming in annually as you have been?

Patricia K. Poppe -- President and Chief Executive Officer

Yes.

Vedula Murti -- Avon Capital -- Analyst

Okay. Thank you.

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Thank you.

Patricia K. Poppe -- President and Chief Executive Officer

Yes. Thank you.

Operator

And this concludes the question-and-answer session. I'd like to turn the conference back over to Ms. Poppe for any closing remarks.

Patricia K. Poppe -- President and Chief Executive Officer

Thanks, Rocco. Thanks again, everyone, for joining us this morning. I wish you all a very safe Halloween, and we look forward to seeing you at EEI.

Operator

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

Duration: 57 minutes

Call participants:

Srikanth Maddipati -- Vice President, Treasury and Investor Relations

Patricia K. Poppe -- President and Chief Executive Officer

Rejji P. Hayes -- Executive Vice President & Chief Financial Officer

Michael Weinstein -- Credit Suisse -- Analyst

Jonathan Arnold -- Deutsche Bank Securities, Inc. -- Analyst

Stephen Byrd -- Morgan Stanley -- Analyst

Greg Gordon -- Evercore Group LLC -- Analyst

Andrew Weisel -- Scotia Howard Weil -- Analyst

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Praful Mehta -- Citigroup Global Markets, Inc. -- Analyst

Travis Miller -- Morningstar -- Analyst

Vedula Murti -- Avon Capital -- Analyst

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