CNP - Earnings call transcript Q3 2019 | CenterPoint Energy, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to CenterPoint Energy’s Third Quarter 2019 Earnings Conference Call with senior management. [Operator Instructions]

I will now turn the call over to David Mordy, Director of Investor Relations. Mr. Mordy, please go ahead, sir.

David Mordy

Jumeirah. you, Thank everyone. Good morning, our third conference to XXXX quarter call. Welcome earnings and and Scott our Liu, results other CEO; Executive President areas. third highlights key Vice XXXX discuss Xia will and Prochazka, on CFO, President quarter provide and members with will management, portion our be Also Q&A who call. the of are during this morning of us several available

In can website, the under on our be centerpointenergy.com. our Investors we be will call, with found conjunction using which slides, section

to today’s call, in on public For in a and that providing Investors calls, non-GAAP website. future, review news our material earnings used of you our use news announce using information note and post slides to refer reconciliation continue earnings please to the release conference the communicate important measures these section releases, Please encourage our channels information we our our of to the may website. SEC to guidance In and website. filings, will webcasts, we

Today, are and including contain management risk currently management. will discuss are factors, factors forward-looking These could filings. and or Actual actions, differ forward-looking upon our on economy, subject available the results beliefs, based in information based materially information to uncertainties. statements regulatory will prices assumptions and SEC projections risks management’s to weather, certain commodity topics that noted that other

We will also discuss guidance for XXXX.

rate and completion potential release, The pending prior and XXXX fees January guidance severance costs of certain merger; including of merger including provided press financing such Electric basis the and variables impacts integration to merger our excludes in to EPS transaction-related Houston expenses, the range and in impacts case. as and the impacts as achieve; other

as well through performance certain in any current as considers potential Electric rate factors and filings impact rate our impact weather, as operations slides, of release earnings normal commodity other Infrastructure case Houston work that may assumptions in significant Services for of customer invested cases XXXX growth, contracted rate such the from and and throughput, including prices, our date usage recovery the press The range to and variables described capital guidance volume and but excluding business.

XXXX. or savings guidance The of provided Enable XXXX as and as third on a anticipated on of of assumes range earnings Midstream Enable’s of in also which, lower the Enable; Energy merger unusual or from related does range and from of securities CenterPoint timing those ZENS Partners’ the end call considers this including not earnings the the cost mark-to-market losses result period. excluded quarter guidance and X, effects diluted value with November In the impacts with guidance, in uses Services items, applicable impacts Energy change changes accounting non-GAAP the along rate business, the reported providing potential potential in such other company’s share per pending could standards a results as or have that consider GAAP impacts accounting measure earnings for Houston associated the a the material merger the adjusted Electric on impact certain of case,

the a losses predict not value various gains management’s as outside CenterPoint of ZENS related to of they estimable earnings highly because mark-to-market in of quantitative the share diluted unable adjusted from Energy or are Energy reconciliation per is and and factors changes the control. present difficult and are business company’s securities to variable Services forward-looking to resulting due

on can to mention now replay the like Scott. access that this begins, how recorded. the be is website. Scott over Before I to Information to call found I’d on our to call turn being would like

Scott Prochazka

an to Energy. we I’m morning, very report good gentlemen. and Thank in had David, excellent today, us joining you you, for ladies your interest and for and you pleased quarter. Thank thank CenterPoint

in $X.XX per the X, third third adjusted guidance with $X.XX quarter reported Slide earnings XXXX. basis share we on morning, a of excluding merger to quarter of Turning compared impacts, this diluted

to Given upper will the guidance full end of performance, of our expect $X.XX greater cover basis this EPS our near range year guidance be to Xia shortly. $X.XX. strong EPS detail in we financials

Turning that sets service have beginning on on today of Electric rates. update We growth weather to XXX,XXX for is customers transmission not Houston city including but XX%. begin including by $X Houston resiliency, Since storms, to with Hurricane Houston we utility yet hard added billion sharing day, $X.X and pace the customers, every customers needs investment for what billion work increase apart. the Slide of my Electric our this to has safe, distribution has helped address keep and and me Electric reliable, close reliability invested an To and more infrastructure, Houston value-added X, the numerous than let is approximately over decade, this of in serving Harvey. provide of enhanced

of for In Award restoration Harvey incidents. Recovery XXXX, the we Edison our were and recipient storm following Institute’s Emergency the Electric severe other efforts Hurricane

to credited among utilities. system. made have to to our ranking the investments harden we’ve investor-owned able the advance and Our while been rates keep low residential Meanwhile, performance be satisfaction customer we largely achieving can highest

the of decided process, be Moving a or PUCT. forward of the by put decision, let judges. will Electric now an document PFD, is administrative Texas the This the of case, step in Commission by and for Utility status Houston rate or proposal ultimately commissioners to the the interim law the Public on me outcome comment

the current was request show $XX or our our base reduction if from amount prior over we anticipated to $XXX in we proposed five-year earnings million operations, in million have off as PFD our On to would the growth The to rates income nor XXXX FFO, X, operating income of in our EPS were guidance of and full. projection. not reduction rate in FFO write almost and reduction in Slide and from operating compared compared the adopted the funds

in which of already being billion been our We in capital heavily increase from full capital $X inconsistent XXXX and was filing, recovered our reduction that expected customers a not by is rates. income of service has operating rate our recovery proposed put reasonable investment. rates earnings in a is recovery today’s for of driven through The in with but over yet

is you not remind an me PFD that from the Let PUCT. order the

faith hopeful have that will operations case. and of process full decision resolution to Electric investments its customer forward allow will of quality, in financial and recover We its and Houston the capital credit commissioners make and service. high-quality maintain all a balanced to remain a constructive look the We current this integrity regulatory

After We estimated an will necessary, continuing, order, PUCT anticipate XX into at final case for PUCT the issues outlines open if going be case meeting go XX X meeting. later. Slide new December XX at our the and forward. addressed line the initially will rates on November time the effect next the open days

also Our businesses gas natural are distribution well. performing

legacy CenterPoint decade, nearly Looking since the at customers XX% Slide over $X invested by gas of increased have beginning infrastructure. utilities X, billion and this Energy on

merger as safe, addition, X hard We utility to year. customers customers In utility, the value-added reliable, combined our from earlier added $X Today, for this gas every million billion. to our over gas expected investments a work services provide over we XXXX is day.

the from have utilities Additionally, highest and customer region low. Power large rates among southern J.D. achieved we kept satisfaction ranking residential

an as last aggregate call, shown Our the on for have since XX, approval increases. received we natural revenue of Slide annualized of gas $XX million distribution,

receiving rate a revenue settled million annual the in increase we $XX requirement. the Ohio Specifically, case,

of Arkansas, filing and We distribution million resulting also million, formula received rate in relief and annualized approval plan respectively. in filing rider in $XX Ohio for rate replacement our $X

$XX for Additionally, bonus a general mechanisms Minnesota. in proposed as approved requesting $XX Furthermore, a the million revenue Minnesota case go of requirement million rates well Louisiana effect interim $XX we the next to a year. conservation million filed Indiana incentive at beginning into of in annual plan rate was recently and and in in as increase

this Texas our rate case Lastly, later a we year. anticipate division filing general for Beaumont/East

the XX, year. on Integrated track second continue filing or developing with the we anticipate IRP, Slide plan to and are quarter Turning next of Indiana to in Plan, we Resource our during

We a put and plan that carbon forward reduces grid emissions, provides for maintains integrity are rates to customers. reasonable eager

we IRP to Commission Utility Following new plan the a reflects request will investment the IRP, completion the outcomes. the Indiana submit Regulatory that of

highlights Enable’s let call on noted you Slide yesterday. earnings me On XX, some give

First, focused including Merge, Run executing and project. STACK the Gulf transportation growth they on SCOOP Arkoma, are projects, and

support rig decline help Second, despite the to continue in efficiencies rig count, volumes.

strong forecast coverage strong to a for distribution Enable cash they generate flows, and Third, XXXX. continues

their $XXX income million net of to of $XXX guidance Enable attributable XXXX million to Lastly, common announced units.

ownership utility On amount billion we and Slide XX, common infrastructure units, cash its Enable end efficient billion our has we support the by to to Enable than CenterPoint, of our of – $X in provided an source more show $X.X from approximately through The distributions of total formation, provide that to to grow to since distributions expect investments. cash XXXX. the

XXXX. performance that Let I’m me very anticipate and the in quarter to saying our a third strong close with finish by pleased

from part increased Slide outlined continue contribution call; on proceedings, merger last our and quality integration improve on earnings noted executing I As earnings XX, strategy areas our utilities, our utilities. as overall regulatory invest focus O&M continuing to on to of through the we in to managing and on the relative

delivering cash, regulated progress to financial forward we territories. which serve the fund forth. the to I continuing investments and set Our service on helps provide merger continue updates on to goals our nonutility to businesses our look needed provide

Now Xia? update. let me financial the for turn to Xia

Xia Liu

guidance will the and I Slide you, drivers quarter-over-quarter EPS Scott, to Thank good on basis turn consolidated everyone. morning, now XX.

$X.XX for delivered we quarter the for compared impacts, year. $X.XX quarter, same share the last merger Excluding diluted with per

positive $X.XX a Our utilities variance. provided

like highlight areas utility’s four to performance. strong would I our to contributed which

provided for lastly, O&M of Electric positive customer rate the operating growth a weather First, Vectren of for utilities income impact $X.XX added warmer-than-normal of provided impact a relief in positive approximately quarter; $X.XX; the quarter. savings second, $X.XX; our territory the positive Houston third, provided of service acquired variance and $X.XX

this pleased continue Our are we strong deliver quarter. results, their utilities with and performance very to

provided negative combined primary Services $X.XX Services variance provided and effective offset Merger variance tax rate. positive of the $X.XX. negative a $X.XX quarter-to-quarter. by Infrastructure $X.XX Energy income as remaining the Our nonutility positive lower businesses interest Midstream for providing and a expenses by a driven of $X.XX partially expected, are variance Investments drivers performed a positive financing variance of variance. of

some third which customers approximately on our performance growth. Houston quarter. businesses’ Electric let utility Turning strong me provide than in to Slide year-over-year, the XX,XXX X% added you XX, to color more additional equates

merger, X than gas customers. than is XX,XXX our distribution by more the customers legacy Our added million in which growth. customer now customers approximately utility jurisdictions, acquired natural X.X% business business distribution second gas to more the over gas X.X count, our largest year-over-year equates from Including the million serving nation’s natural

momentum As from see we on to Scott management. O&M mentioned, our continue focus

going focus This $XXX O&M XX, and discipline approach regulated X% a Slide year-over-year be jurisdictions. combination efforts. represents to for management positive across million savings This a at general variance O&M will reduction. our Looking XXXX close expense of to This we our forward. of year-over-year continue are is all forecasting XX merger holistic

terms natural utility The million In approximately work expect to Electric $XXX year and to related be modernization Houston investment, pipeline higher we gas of replacement XXXX for is originally our capital than full increased at system investment businesses. distribution planned. additional

As we discussed will amount for be maintained of call, investment the on five-year levels XXXX anticipate the to utilities XXXX previous at plan. period the the our in overall from last capital

capital comprehensive swing, in update planning the call. process capital on our plan fourth a is full provide to we on Our and quarter program earnings investment

affordable We must reliable businesses our clean, safely strong customers. focus our more become in maintaining while infrastructure services investing to and and efficient our provide operating on safe, to

managing expenses, ROEs. close our and focused capital allowed remain allocating to on earning will We efficiently

remainder and period performance through higher to a have per diluted EPS XX, of basis guidance September, XXXX. expectations the $X.XX will On merger we year. of Slide breakdown same a impacts, compared the excluding see you year-to-date to consolidated Turning the guidance delivered last $X.XX basis for and share, diluted

the as Energy from XXXX and acquired a O&M operating from of to Services. than is businesses utility as by Services our expected from Energy higher the Services an well forward by weather decrease Looking income driven to end by driven relief, Services primarily $X.XX $X.XX Infrastructure be last is newly $X.XX year, Operating jurisdictions. the Infrastructure management, from customer increase year expected than offset higher year, for rate income $X.XX the to be growth, newly acquired

is our deliver from some XXXX In by earnings of performance interest slide, $X.XX short other are guidance variance lower positive the guidance Investments around full expect top on surrounding tax. from year, potential developments XXXX Enable’s basis of attributable the of excluding offset EPS forecast. range. by last variability, investors as to clarity noted be guidance guidance of for growth the I variance We the the $X.XX negative of expect summary, end impacts to end this eager $X.XX to and result near we The and of partially hear to our $X.XX understand earnings expense year. merger Midstream year EPS a as a remaining to $X.XX financing driven reflecting $X.XX

provides earnings months. XX plan, months, resulting high-level Slide case, the provided further expect few over Enable a guidance. and of integration rate next plan. key several Yesterday, refinement capital pending In coming the outlining clarity line on time financing activities the technology we costs Houston including their XXXX the the five-year Electric

thoughts how share guidance on on some the quarter me fourth plan provide Let to we call.

merger-related all, of First to we synergies, on our million anticipated for year-over-year targeted already year, $XXX $XX for exceed XXXX. respect are with And approaching synergies for O&M given on million this to we’re XXXX. the track reduction is our target

management synergies rather year, than from Following O&M discussing management. general this we consolidated focus separately on will O&M

be merger million to between to expect respect Second, cost achieve XXXX. integration for million and we’re track to $XXX $XXX total to on with

the an updated fourth to quarter integration for to of on process beyond technology finalizing and provide cost XXXX in We’re earnings our estimate achieve expect plans the call.

costs reflective we these ongoing going earnings that forward. are potential, intend not of guidance continue achieve exclude to Given cost from to to

intend from Separately, earnings. the based earnings provided. will Enable public we earnings an they to Enable range CenterPoint have provide on guidance we guidance Third, businesses excluding for XXXX provide

utility provide as multiyear rate capital targets. In plan well highlight of better many associated with We requirements aspects addition, this to businesses, as will base believe the EPS our programs. we rates utility expenditures, growth important capital financing including growth approach

business you sound. our with growth Customer fundamentals our let our service XXXX some steady remained are While open in are issues to remind core that territories. still me respect outlook,

investments safety, reliability, needs in service We utilities continue and capital resiliency service our our address make to to growth, customer across territories.

shareholders. we solid that investment-grade We in maintaining a continue and quality firmly credit providing our to as customers to to be balance value committed long-term strong fundamental sheet believe is

and guidance top confident conclusion, In our in of strong range. quarter end the another we remain EPS near delivered achieving basis XXXX

synergies. We are executing our merger plan and achieving

business. focused efficiencies driving our throughout on are We

significant our needs. customers’ deploying We’re capital to meet

We the needs. are businesses to fund capital cash our from utility nonutility using partially

anticipate of the to XX% Finally, deliver expectations. commitment make performance on earnings our our we reinforces up effectively approximately ability utility overall manage earnings business shareholder year. This will and and this

David. turn to I’ll now back it

David Mordy

Xia. you, Thank

the We and interest now I’ll one will the call open to follow-up. you In time, to question of yourself limit a questions. to ask Jumeirah?

Operator

you. [Operator Instructions] Thank

Ali from Agha first and Our SunTrust. question is

Ali Agha

you. Good Thank morning.

Scott Prochazka

Ali. Good morning,

Ali Agha

reiterated call longer long-term the to believe which now? consolidated X% I growth for at off as rate Scott, Is morning. recent actual was Good the it CenterPoint operative X% of as last earnings had base. you a XXXX no that

Scott Prochazka

until growth Ali, rate we rate around we have we postponed talk I the that CEHE about the Enable. get clarity talking indicated Xia also excluding the going about intend on think forward, And earnings to growth case.

pieces proceeding. the have entered So getting But really two, those two those that into equation the are the clarity the Electric is biggest rate on now. Houston of

Ali Agha

it – slide to I some become us put in Okay. relative does you expectations, And some to decision in big final proposed on a sense how should But least you markers laid out negative it be? of some the the give this rate us can at if – give know of deck. proceeding, can you context,

Scott Prochazka

whereas in we billion-plus you rates. service that in put an has that a the not be the assumed of investment where It’s not in additional the $X that. PFD to least the If current a so were, Maybe if that would recovered to investment, it about increase, would We’ve that we suggested one think rates over communicate clearly, – Yes. – will, piece, way that PFD good recovering we’ve have at is already just is is from outcome. be relative yet decrease. rates, we the to tried we

that’s a a – notable is difference. or sizable that a So

not FFO well. Additionally, in the anticipated reductions as were

the a commission the to more We hopeful process better will describe and of And balanced as look on a the just while facts. want impacts PFD to be as reach in and the weigh is yet decision has the I confident in position commission remain get clarity. to this, they challenging, that actual that the in we will at we reiterate,

Ali Agha

the Are Right. committed still as quick businesses? Are far one concerned? follow-up. considered all they And you’re still as to nonutility you just core

Scott Prochazka

is figure each activity our of to that cash businesses out continue We for evaluate of basis. that the to look just continually at businesses cadence to they are ongoing I’ll The generation source us regular call, shareholders, providing reiterate, we utilities. on of if mentioned nonutility and a and That’s our them. value the an do possible we maximum on for our to are last how

Ali Agha

Thank you.

Scott Prochazka

Thank you, Ali.

Operator

Our next Credit is question Weinstein and from Suisse. Michael

Michael Weinstein

Hi, good morning.

Scott Prochazka

morning. Good

Michael Weinstein

your you plans Services divestiture on full a at comment Are a strategic Infrastructure them do are you bit Or business businesses, you forward? to to the Could going the particularly we point? for hold term? nonregulated long about little at intend some looking –

Scott Prochazka

a that of best whether had shareholders of at those can. I businesses. providing of utility does on for a businesses maybe is what evaluate look businesses that to think regular investment part they as is answer source to as way we a see mentioned maximum course are just the in a I our regular value basis, that cash to of management, our and reiteration Ali, possibly today Board. as we And we And the as

continue maximization. an with in eye value that our we context to think towards So businesses about

Michael Weinstein

found about review, ahead I’m speaking are just Have future? you’re the And the you And if Xia, surprised far? going review $XXX what wondering of quarter O&M – it about pleasantly Or with so so like – you for the optimistic generally finding? wondering are – just if million looks how’s of you reductions far. fourth you worth

Xia Liu

expected, which year. a we that It’s set of $XX-plus is going forth million very the target well. $XXX this of the The we what million is synergies part

ahead that. are we of So

from on focus good to costs we where to day team synergies. out getting continue has rock done and basically find see think I a one the turning every job additional can really

done synergies. the same the really overall O&M processes So we has achieving good time, reiterated improving At team efficiency this year and focus on focus. a job our

So continued quarters, over that. focus results the the the seen have past on from we several

looking I commitment in think can the more all are have make their spending doing to and we basically at made businesses we efficient. become everything overall sure plan

utility about the optimistic allow very aspect. continue I focus time, the think would it same infrastructure. and about grow us deployment to that future, on on I’m At focus our capital to So continued our

Michael Weinstein

Thank you very much.

Operator

from Shar is question next Our and Pourreza Guggenheim.

Constantine Lednev

Hi, here on to quarter. guys a good I Shar. It’s you for Constantine good just wanted congratulate morning. actually

Scott Prochazka

Hi, Constantine.

Constantine Lednev

at couple here. on capital plan, you’ve questions of outlook little color of of utility but kind seen an time of Or it’s does A growth the there can a expectations? give Understanding this versus incremental? is kind how that early to any And correspond early pieces outlook anything that you the keeping that can moving address bit prior you of kind on that intact?

Xia Liu

we five-year expect expect we is The period, increase $XXX Sure. the shared be amount the The you I XXXX plan. factor similar Yes. now, with different, XXXX the be and previously – shared the you to prior to compared it what to for as – IRP. from we over to that for the one overall XXXX key what about And for could – we million aggregate timing just with from of year. communicated

IRP the in Indiana. finalizing We’re

the of timing well from will new the gas. utilities continued incorporated our So and from as legacy the be that as acquired need

the from an years. maintain aggregate we see similar level say will next would overall, a we that for five I standpoint, So at

Constantine Lednev

so a of point? utility you of outlined you can kind Does the this of of strategic kind objective at with kind this of how of objectives color organic of have a that kind kind the growing a that bit plan fits it little earnings? gets as And formulated, purely give

Xia Liu

about try be focus on management O&M Grow and to try allowed to continuing Yes. achieve our and to allocating utilities, capital ROEs. closer to smart

Constantine Lednev

that. just one And quick follow-up on

of there where so kind specific from pretty sitting. of like the it we’re Is of kind of call, on? some And can, So you the that of you of see of that management deep the going moving And if kind how past see any pool? kind with kind going O&M forward XXXX? programs kind you kind good savings of statements nature kind on highlighted just on program recurring the numbers of that looks do you

Xia Liu

good answer expect we with future point similar think we’re are to projected will that year-end way is where discipline, continue the pleased into best forward. far, the the pleased as numbers. that starting a so we’re And we very the be think and going we momentum And apply about to I we a years.

Constantine Lednev

Perfect. Thanks.

Operator

Julien from Merrill America Our Bank next is Dumoulin-Smith of question and Lynch.

Julien Dumoulin-Smith

team. morning good Hey,

Scott Prochazka

Good morning, Julien.

Julien Dumoulin-Smith

follow-ups of couple a So here.

the about about think here But at mean against? how utility the say Enable want specifically XXXX I I sure to Also, do decisions needs? slides I raise I ex address sheet balance you into capital this are square here, table ex to have sheet follow-up. On just potential needs to the potentially five-year other about obviously make them and I understand. Enable. balance think you we are businesses to on think strategic your can also a outlook, it, thinking Or if how the then a being And point? I

Scott Prochazka

way would a and cash for right? said about Julien, we nonutility businesses I’ve the nonutility are non-Enable the businesses Today, So is us – it the think I today. of source earlier, what

one it. we the way So would a it providing to That’s going portfolio look excluding be about Enable. about when for think forward, talk

part to another question. had your You

Xia Liu

The balance sheet

Scott Prochazka

The balance portion. to the balance sheet talk let sheet. I’ll Xia

Xia Liu

be to number rate in itself the of Yes. important needs Julien, yet impact the very the not will equity part Scott we FFO case financing credit because reduction, component financing share decision. reason the similar metrics. that’s that that the CEHE why to And ready mentioned, like of a maintain would are

to Continuing ready priority. another to the not ways that credit is we’re So our balance is yet, maintaining that sheet very address quality we’re strengthen find to fully but quite important. aware

Julien Dumoulin-Smith

right. then, indeed. utility pending I going do forward? potentially you cuts this that a case. this earned across that do and think think forward? year gap going the understand Can briefly kudos about you how big Got narrow returns How about cost again, year you continuing I it. that. enough. business obviously, rate into same next the how got you Fair All think gap? about about the mean, talk And to that we’ve narrowing and time, At on

Scott Prochazka

Julien, say sizable Yes. the new very around starting today continue which discipline start year new as still from a gains force the a to want that forward. make this intention expense We merger, focused will was be The from to point but of add. have we’ve our out, and continuing driving date Xia move going expense we every to I manage we managing that management. a that the work. as expense. our the us I’ll to on we of equation to we’re maybe may had would we working think savings And which establishing see those actual but numbers made level to associated, allowed

Julien Dumoulin-Smith

can, if we prospectively today if what you versus of that briefly, will? talking clarify kind can gap we to But are achieve, you about

Scott Prochazka

From an O&M perspective?

Julien Dumoulin-Smith

Yes.

your As some from much in cost mind, the there a talking of given to is perspective, gap in reduction narrow – an that of about? or how earned return we’re

Xia Liu

think year, our I – – just are good every job. versus some so to the related expected returns, from isn’t to doing a particularly same. – trying Julien, really the focusing allowed gas businesses the this we headroom of returns natural are on Yes, And – the dollar we closed

to – at will the provide do you know deploy itself to DCRF, incremental that the of safety, So that time, make we filing reliable really continue we where TCOS smart have timing CEHE, a dollars. sure where about service, in the same the At and lag. being deploy – next

versus For we the is in September. is instance, the you delay. and three-month rates a the revenues, TCOS receive in time filing DCRF there April And file time getting

on continue I inherent there. will close give going some focus completely to could the don’t that same is ROE, will we the the time, think allowed a ability. continued the focus to At us forward. lag be for but us gap definitely I think regulatory So O&M the

Julien Dumoulin-Smith

Thank Got All Fair right. it. enough you. guys.

Scott Prochazka

Julien. Thanks,

Operator

is Insoo Kim and Goldman question from Sachs. next Our

Insoo Kim

billion base guidance into starting be Thank there’s that provided that’ll weren’t lot original you. guess, Maybe trying February. I to XXXX the you But mentioned and getting recovery then you $X operating $XX operating current million and in I of also If the rate parts had the take rates. difference from math income the the the PFD, put result the would small billion the of we’re the the in $X – the some just in income that guidance, case. I when of would just decrease that’ll about, that I go just else included PFD on, $X.XX, CEHE was – the in your pieces being difference. that imply? the would midpoint, rate return I about a like and original something PFD guidance $X.XX Scott, the moving the calculate had million how in when together, a spend what $XXX think understand which All equal, CEHE with should way of is and would

Scott Prochazka

example, thinking. associated reduction needs That with could and A for the is accelerate maintain equity, right to current Xia the things, the though. metrics. doesn’t side. couple impacts about significant kind of math reduction FFO in FFO. talked in thinking That’s the I earlier the – for of the you’re the think the line earnings of the Insoo, way just include a

So on include depending the does outcome. doesn’t management we that outcome, it what effects I what include it nor response negative of take would actions because would mitigate consider to the we help consider an can

what’s And yet this. parts lot And commissioners to commissioners we the isn’t not of here. appropriate. on opined there’s PFD the and we’re about trying that’s while different will are process view I moving But have hopeful want what why reiterate of over, to that I just the the very clarity says, said a a provide have

Xia Liu

the aware XXXX nonutility another issued add their component related and guided was in expectations the Enable this Enable. just range. the quickly, to just other the also guidance. the lower on about of in That Insoo, original end they guidance to guidance, And particularly and the original we I’ll development year, had you’re They businesses.

Insoo Kim

sticking Yes. with secondly, that. on I other of And to may pieces. the the moving CEHE. your of all PFD forward totally make investments on may thoughts can a the the not given how want do If utility? going capital just the understand the up with hold rate you results didn’t make, open disallowances, of all Maybe – spend related moving that little impact does the future type Appreciate at to current parts. worms associated what I decision? or case

Scott Prochazka

needs we the little large, that our have about look, by capital in community. There our the are service serve of still spend obligation bit the customers drive discretionary say, a thinking is and perspective. to I’d our needs But territory, capital. needed of capital customers ones ultimately is an the serve the to timing Well, the and from we of a

by need to proceeding. So example, before – go we that the community would here. the of for – of is take some – were it’s on going making driven down outcome have of spend. we disallowances of necessarily views be action primarily to to would the there – driven we what the needs one to the by spend the But upheld, by be That’s itself acceptable have get the we opposed capital path example to clarity around the if management would as

Insoo Kim

you Thank very much. Understood.

Scott Prochazka

you. Thank

Operator

JPMorgan. next from Our question Instructions] Turnure [Operator Chris and is

Chris Turnure

the have part at, of with the discussion where I they’re now just Houston far got right the was agencies? When last all if credit kind update that these Electric metrics, in interveners question for had only on outlooks. been so where with of And from Texas? at you you’re The guys of kind at left including you an

Xia Liu

rate Our transparent We where we from keep are standpoint. the case very of CEHE and are communication fully aware the open them. with rating agencies

the from like final I us, be are, find ruling. PUC out to think they the eager what will just outcome

thing, But constructive is recommendations. is said we final of the times, other So that aware remain more Scott balanced hopeful of that the like a outcome PFD couple one the are thing we outcome. and

depending the agencies the I rating So will outcome, with on think rating about we are. agencies communicate where again the

Scott Prochazka

shared relative concerns, Chris, in the views information as of well add, very views think as as the commission the I also part and agencies, rating the the CEHE’s proceeding frankly, been this and of about around interveners that – others certainly process. to of condition quite the I – the have is and the are would rate have aware

Chris Turnure

have the Okay. their Because case layer things. as of and certainly, processes part some rate of other there discussions recent in equity had your authorized that around peers

Scott Prochazka

our Yes, of part discussion. it’s absolutely

Chris Turnure

Okay.

versus but So focus other lack it of changed has terms in on there that the the part also certainly focus discussions like prior cases nothing discussion, or rate Houston. sounds for of of in

Scott Prochazka

information the periods the we we this. Well, can in respond subject made But our information that’s comments, is judge’s around of how provide by associated going to weigh we is has again, own which think issue. the only in and about out and have rate it the factors. this the comments metrics yet issues very caused of The throughout clear, different come commission to case of into credit this to on with the particular PFD. about far piece That’s so only view

the everyone key So very is – aware all of issue. parties very this are

Xia Liu

that to consideration. Chris, your the take point, ALJ recommendations didn’t the from into

Chris Turnure

Okay. Helpful Thank guys. you color.

Operator

Our next Charles Morningstar Fishman question is Research. from and

Charles Fishman

week. the next reached is make a something decision week? what a for on? Is X, Or everything Scott, not to to be you might your might waiting still – on is seem not they they’re that why seems there make But next decision. like it commission up decision queued Slide imply

Scott Prochazka

Well, debate they it XXth. are going be that full would of things. There a asking a the the number issues could work pushed this on. may decision meeting. a like at upcoming of There’s make timing they And meeting. for through to standpoint, it to kind while just a one at be through obligated the just decision, and it make example, our issues of following everything, them number – of we’re a It gets get that we not on. perhaps They’re and meeting on and be, to that every number them opine to could things a there’s don’t agenda, a from of

to So be that’s and also it dialogue the be the could debated they possible size meeting. could but just and will It think to issues point, it would another than of it’s agenda think us possible number to they get make why other end is of the an we that push pushed. begin nothing

Charles Fishman

technical more any administrative like Sounds then than thing.

Scott Prochazka

the Yes. to way of That’s think it

Charles Fishman

the second from – acquired the positive utilities Services the or Energy And from basis first nine on guidance business. XX, then earnings, my I operating Slide from If in question. utilities $X.XX the – $X.XX merger, being the say a merger math is months looks $X.XX right, earnings unfair O&M months? from financing. transaction that dilutive Or that’s credited negative merger? of $X.XX some nine first to this Is the On and yet pretty that for towards $X.XX the should the management be

Xia Liu

Yes.

Some should credited the of merger. the towards be management O&M

$X.XX. the think around I financing itself merger is

added of the then the $X.XX, Indiana be added Vectren jurisdictions, from Infrastructure and management Electric gas the credited legacy $X.XX, Services pickup year-to-date O&M acquired the you $X.XX, to added the variance. If some should add

compare to You the parts moving financing. merger those should

Charles Fishman

Okay.

O&M least if through point, at transaction breakeven. So take the some first credit this for nine is I management, the at the roughly months,

Xia Liu

think about That’s good it. to Yes. way a

Charles Fishman

all Thank I you. That’s Okay. had.

Operator

question is Ashar next Verition. from Khan and Our

Ashar Khan

Good start forecast end, assume in are said I get business how utility morning. for if we for to good I And scenario? on to wanted year just earnings. XXXX? to CAGR much Can you the the that ask the this out we upper you at be Good base can would a providing wanted just based come earnings the be off will and with idea. that the utility

your what the would So for XXXX, guidance be? under utility current guidance

Xia Liu

is itself. based And the But tax think items expectations. roughly, to the XX% our today’s mind, of repeat the expected necessarily XX% the roughly some not about parts of are income is be there, in construct. that’s – earnings of It’s utilities. also moving the We is it might to we regulatory earnings and there. there favorable from in weather – several utility had that had on in favorable CEHE Keep way

outcome… the So

Ashar Khan

Okay.

and Could XX% weather take tax those how the $X.XX, how quantify if say items? much So would $X.XX. I much be? of just those it’s you is And would year-to-date, you

Xia Liu

Yes. to. happy Yes,

positive, a $X.XX roughly weather, year-to-date, So little $X.XX. over

Ashar Khan

Okay.

Xia Liu

And the $X.XX. favorable alone is item this tax year for roughly

Ashar Khan

Okay.

running Would $X.XX be weather a this year it’s base number? for as fair that So for we taxes utility. – the and approximately normalized are

Xia Liu

close to. Yes,

Ashar Khan

you much. so Okay. Thank

Operator

Crowdell last and Anthony Our Mizuho. from is question

Anthony Crowdell

process like Houston, the easy – like hearing? long the Hopefully question. What’s motion time on an I clarity the Good the morning. And for frame? Hey. guess on in the motion how for rehearing

Scott Prochazka

want me? here do to and for Jason, down answer this you come

Jason Ryan

Sure.

Scott Prochazka

expert down make correct to the timing. me regulatory on doesn’t our have sure here bring to to he going I’m

Jason Ryan

Jason Good It’s Ryan. morning.

commission, the the process rule after XXX then the for due. of order So issued to is passage commission up on the they’re couple their rehearing rehearing motions overruled days to motions or for a has of weeks by of just the And by for from rehearing that time. are order the date

Anthony Crowdell

through that any orders when been like maybe Is something of have preference you have in or changed have Texas you guys historical rehearing? disclose? Do can

Jason Ryan

rehearing So depending motions that they and for on raise. denied are granted the issues

ruling Sometimes changing rehearing item are versus rulings. the motions are the substantive purely at for a granted correct changes sometimes administrative substantive there a to

Anthony Crowdell

– new the after Slide stated into days stated effect on that Does the X, going XX becomes PUCT the you you rates order final.

a for the that for motion denied, file for or when either is that motion is you rehearing, the final final date? If rehearing date? is When granted

Jason Ryan

Yes.

Anthony Crowdell

it. questions. all my That’s Got Thank you.

Operator

this this remarks questions. time to back time. are closing David over I any it turn at And there at for now no will further Mordy

David Mordy

many CenterPoint of interest Institute Energy. We everyone to for you you in Thank shortly. your forward the Electric Conference look at Edison seeing

a call. now will day. our conclude XXXX Have third We earnings great quarter

Operator

earnings conference participation. third This Energy’s XXXX you concludes call. for Thank your CenterPoint quarter

You may now disconnect.

CenterPoint Energy (CNP) 7 Nov 192019 Q3 Earnings call transcript