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BKH Black Hills

Participants
Jerome Nichols Director, IR
Linden Evans President, CEO & Director
Richard Kinzley SVP & CFO
Ryan Greenwald Bank of America Merrill Lynch
Michael Weinstein Crédit Suisse
Brian Russo Sidoti & Company
Call transcript
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Operator

Good day, ladies and gentlemen, and welcome to the Black Hills Corporation First Quarter 2020 Earnings Conference Call. My name is Daniel, and I will be your coordinator for today. [Operator Instructions].

I would now like to turn the presentation over to Mr. Jerome Nichols, Director of Investor Relations of Black Hills Corporation. sir. proceed, Please

Jerome Nichols

Good First Daniel. Welcome Black to Thank XXXX morning, Earnings Corporation's Quarter Conference Hills you, everyone. Call.

Leading the You can our Relations today under at Rich Evans, Officer; Officer. President Senior this call earnings and heading. are Investor Chief Linn find materials Financial website Vice for at President our Chief our discussion quarterly and Executive morning Kinzley, www.blackhillscorp.com and

and make Exchange discussion today, and in by some may we contain earnings comments defined inherent forward-looking our a During the are the Securities Commission, there uncertainties number as statements of of comments. such

XX-Q that expectations earnings website We believe direct we investor materially Slide XX-K with are could Commission Although our materially. Form of actual most Exchange and and of our to the differ Form that the a our factors Securities our release, based assumptions, to from on on our for reasonable you differ X beliefs results recent the may list cause expectations. future some filed results of and and presentation

now the to over turn call Linn Evans. will I

Linden Evans

its COVID-XX business. this the Good morning Thank us for addressing joining time spend I view bit anticipate Thank we'll our of you Jerome. morning, quite and this our everyone. pandemic a you, impact morning. upon of and

and let partners and the priority by communities health serve. So me we customers, acknowledging safety business please, that highest is of our the start, that our our our coworkers, proudly

to mentally our financially Hills unimaginable of and and your and impacted and as guess, by Black this Our families would people either our physically, of healthy I and unique really, truly people. this most I some each I are pandemic hope ways. sympathies important are out go assets affecting who in that culture safe, Sadly, pandemic. all is you are scores our describe

post each with I we be will what certainly know call are and you, there virus. of a hearts Our

particularly are essential professionals and want the by to on extraordinary We're out the responders and medical response. especially times the these. energy inflicted first team's lines reliable by and upon, for of and safe customers especially depend our like the caring the virus. our our who those effort proud I'm I in of maintaining delivery front call dedication this

implemented pandemic, a response virus simultaneously. we everything thought-out we are team well the do actions mitigate of quickly in set to comprehensive the of ensuring Our can to help the spread doing

We confirmed cases are among Black have very fortunate no team. Hills the to

if say and ago service populated traveled the We few a as the fewer the they they have cases to country. generally of a were areas urban having had coworkers reported virus I'm than recovered. the after pleased have Also, few positive year, more much the in months who virus has our treated had around earlier territory

coworkers to We are hardship helping by individuals, especially we and virus customers with our focus true communities to remain highly values and financial relief donated on in assistance, particular the a our with and providing we assisting also payment on the have amongst hungry. efforts of our reducing as suspending disconnections Being and company a our customers. spread engaged the focused and and as

through We situation, and response health our our business fully we closely and as are professionals our with are operations industry guide continuing to monitoring and we engaged the help virus. groups local other migrate authorities, this

deliver help energy. protocols, we ensure We've to safe also processes programs reliable various our implemented or and changed and to maintain our ability

with this values they provide economies. thank our and our need the doing so, we rebuild By stepping customers navigate future. coworkers, are sequestering mission-critical I sequester currently we and of are energy the in to make conditions for they're warrant prepared representing doing folks up. some so coworkers local should us sure place and pandemic in example, to helping these our critical additional For we our

positioned And monitor our well capital COVID-XX plan impact our and near course, flexibility were successfully in financial have before customer key we future. flows, arise of program. retaining that contractor obviously, to such in our should fund operate might deployment and drivers and closely a to our also continue liquidity for projects. perspective, financial uses we capital, financing key market for usage, cash of our sources We're the times emerged, lead opportunities we to take as business availability and strong From of materials favorable conditions advantage

overview pandemic I'm early an and our acted quarter. especially Moving of response execution. X, of and to decisively solid operational the proud the provided how they financial and to Slide I'll team provide and and first in

our affected to how quarter. going discuss has our it deployment our capital our customers, Although earnings we for COVID-XX shortly. expectations Rich forward is to serve and first minimal impact the

are after we We equity earnings. delivered liquidity issued quarterly strong and a February quarter, solid financial the the $XXX for our into year. million And taking We equity on fulfilling the during XX mild weather of in impacts first position. needs on account

improve effective the and That consolidation teams Wyoming, both pain X. finalized I and regulatory operations our outstanding continued stakeholders. of regulatory and statewide on improve to allow X and Our reflects an to in of near-term a positively that of efficiencies utilities rate us a that constructive strategic there. we work continue Wyoming on was for our environment single gas really new and appreciate structure willingness March regulatory through long-term natural We consolidation their short-term all service progress to the customer enjoy to initiatives. under complexity result

energy in of We solutions renewable electric also our X to advance all utility territories. continue for our customers

Utilities. with first quarter. X. to start the on Slide Moving It detail provides more Gas our I'll

Colorado, Nebraska, review and We a In of on utilities customers within in investments and the state. completed and X for continued earlier. we mentioned we Gas January consolidate I legal that customer recover Utilities Wyoming, efforts prepare to to X, consolidation filing as for consolidate midyear rates Nebraska continue to Natural rate

in filing, of the we're are timing pandemic We a Nebraska staff constructive -- considering our the having and dialogue ongoing Nebraska regarding decision. with the the with that

gas that consolidation recommended open Colorado decision. consider administrative regulatory the an filed for to result and judges ALJ's and adopted ALJ would the in commission The investments. accepted The to response the In of to were rate of on that decrease. return the except the meeting Unfortunately, from commission law for recommend X.X%. recommendations, the exceptions safety-related rider in on equity, all a recommended rate commission ALJ also our recently denial decision review which Colorado, X.X% the held adjustments requested nearly reduced that of the

disappointed in may commission's next that, be Of When and we're steps the waiting what final course, Colorado. receive decision, are our we we'll in determine we order. for the then

Last XX.X utility application it and electric currently budget. Wyoming Corriedale The the purchase segment, for Generation end the other on megawatt track Renewable this the application, schedule on filed by that our under a in near Project confident is hearing now projects monitoring been FERC February to Moving Dakota parties. our for power time Wyoming new discussions. on We've project, are closely, both to joint project course, public currently of August, subscription energy on for XX, Power a Electric year. of we Utilities Power On FERC Generation. and project asking with continues for our in very for ongoing of agreement. the Cheyenne. and Ready South and also completing and is the ordered settlement held deliver in Construction advance, discussions ordered the The chain Wind of customers hearings settlement supply outcome amongst pending this and the for our in approval Program

for electric requested our our are bids energy Colorado Advantage Colorado our in renewable working through to We Renewable program. customers. also expand megawatts XXX energy up serve We of renewable mix generation to to

are June. those We bids with recommendations next currently those and independent submit track in the help evaluator, on of to commission month we're the to evaluating an

Again, to while item credit that we investment Ratings ratings. BBB structure page grade this on of well corporate on our maintaining note solid our I'd were the objective XX, like pandemic, I think is affirmed affirms S&P a in final this our capital credit solid The into rating. Global April

over it for our to Rich? turn update. Rich I'll financial Now

Richard Kinzley

on Linn, Thanks, I'll everyone. good and good. X. Very morning, start Slide

expectations. solid performance As we quarter met financial our Linn delivered noted, that first

$X.XX to year's was much year's normal. quarter than as $X.XX QX driver First was as quarter than adjusted was first normal, milder the this Weather EPS quarter last in big colder compared affecting results first year-over-year and XXXX. was

and financial solid. results our For estimate impacted by compared normal Despite EPS to on to $X.XX QX. unfavorably compared $X.XX QX impact weather, QX by weather XXXX XXXX, for our we was limited had to unfavorable COVID-XX XXXX. start

year, given However, adjusted Slide more basis, discuss our anticipated pandemic each an XX I'll prior weather, remainder share from $X.XX guidance. from $X.XX combined in XXXX end first earnings on our of and unanticipated $X.XX quarter revised guidance the on detail assumptions the XX. we earnings over through our to impact impacts impacts decrease on guidance to pandemic the range of per of the mild a

performance to we We impairment special earnings privately in non-GAAP XX, and $X.X better first This million our and In or same as were both the GAAP do $X.XX earnings. Slide futures impairment a to triggered pretax deterioration On of recorded of communicate represent last third-party decline we gas held to we that the items the and earnings a quarter X the recorded related company. In the believe earnings investment. slide significant adjusted we quarters investment tax performance. by a our this ongoing price the gas demonstrates and oil impairments earnings displays seasonality in isolate third These of an in XXXX, an of of related after reconcile a per to measure. noncash share quarter the XXXX, company. natural

exposure on oil ongoing XXXX basis. and indicative investment this of them direct The in not value and an we accordingly, performance, $X.X XXXX our book remaining in the million our gas to as-adjusted are reflect only is Our industry. of and impairments

Gas the rates a of largely add customer Slide at earnings high impacts. QX gross XX was results detail our to this margin from despite Gross chart All Utilities weather benefited I'll year-over-year of our was from drivers flat growth, our to margin but waterfall illustrating amounts in new chart prior unfavorable on are by XXXX. Electric segment a which level, year Slide and offset taxes. QX XX, the Utilities net XXXX unfavorable is by weather. on more primary

expense Depreciation additional was year O&M stock from increased investment Interest for prior our and Our by by by due than of our Total to reflecting program. management. as tons at Mining expense year cost solid Other a lower to favorable slightly prior plant expense customer-focused result income plan nonregulated nonqualified margin relatively segment. flat. our than sold driven declines. was benefit reduced service market the lower the X%, driven increased less was capital primarily

our in year. can you in find segment and release On the additional in the income that Slide margin will are prior on and later operating first gross I'll comments expenses year-over-year we today. to make operating file compared here, details few earnings changes for results quarter XX, QX and XX-Q our a

Utilities, At margins $X.X sales. X% our depreciation energy due expenses power to higher our rider the XXXX. and expense. lower at $X.X higher decreased Electric unfavorable timing operating were expenses QX normal municipalization outage lower contracts, higher year, Pueblo, expenses on Operating prior XX% QX compared the to million degree XXXX. compared marketing and increased and quarter the employee for XXXX were due higher flat costs, Electric Gross to income reflecting Utilities year million QX by wholesale related over weather by and efforts to days gains below in mark-to-market off-system Heating offset generation margins than last QX for to

Heating QX flat operating to margins and benefits Utilities Gas unfavorable customer degree million offset driven days Utilities, weather benefiting the income normal our at XXXX. new below and territories XXXX. rates, largely commodity higher gains last QX Operating increased from for for Gas were were our higher on growth depreciation. by by compared was lower million, by increased service XXXX contracts. than our QX These quarter $X.X in expenses year. to At Gross by XX% X% $X QX mark-to-market

we last due property year. at assets. and included wind new these the credits earnings higher our the of and generation generation bottom taxes the below half operating due credits tax new these on decreased wind to the $XXX,XXX benefit income expense was from tax XXXX comes receive in federal through XX, reduced are On Operating from Revenue line primarily higher income depreciation assets These expenses numbers. wind in Power The primary from Generation to income increased our not new increased Slide projects. year-over-year. added tax segment, projects from operating production

planned the Operating demand million. income at tons lower XX% segment year Mining timing decreased Current prior year due our compared year. lower to the revenue than was and at by sold due of Wyodak outages plant to prior decrease $X.X the a in to

our ratings and lens flexibility. shows capital financial the credit structure, financial XX Slide position through of

a from shape good and liquidity perspective. in debt maturity are We

Fitch and remain a stable BaaX at credit at all agencies. and X both BBB+ at outlook with ratings Our Moody's S&P at

ratings. our committed are maintaining to We strong investment-grade credit

As to help BBB+ stable a our on Linn investments mentioned, affirmed equity And million our XXXX strengthen with in outlook of balance capital sheet. rating issued and we February, April support S&P XX. $XXX our

remained year this this also we closely short-term don't available to push facility. We April equity to any XXXX are revolving million. from maturities of if position. we debt will position on million into and index-eligible expect flows liquidity in capacity our $XXX to XXXX. that enhance We further issue the the had While liquidity our debt flexibility XX, in and favorable. monitor pandemic, cash our on hand don't on March to capital out And an cash conditions we liquidity investment do would of program support any credit But market later XXXX. given more offering On material $XXX late term XX, may and until we position. during have approximately look issuance our liquidity excess our our issuance We have issue debt

I'll a that was March at debt-to-capitalization our XX.X%, also XX, year-end. basis from net improvement point note ratio XXX

the -- mid-XXs We long continue cap in over debt-to-cap total the a to target ratio term.

the and XX most trends our lines averages events Thus few below they far, XX and financial jobless unemployment Electric typically stable than as from illustrate insulated crisis as our swings metropolitan the more I'll and our to of our average. operate have has territories service more decade compare Gas The that and Utilities months. major the claims not in such areas. service for the populated well note states graphs been Slides rural states are a densely pandemic in more major the impacted economic over how national show national severely rates in as territories coast in major the ago, regions. past that and past

and We the to crisis, we in will will be are optimistic cautiously that this territories. with continue monitor trends case our closely

we on XX guidance With our with the COVID-XX, in of but by weather, our unfavorable COVID-XX stable range. share. by this from trends revised and to of $X.XX be the range I'll regional the expectations to expected guidance $X.XX compared revised to includes EPS we we $X.XX move our slide, bridge discuss to guidance. guidance On the prior reduced during from guidance. the impact each end mind, first per to earnings normal position financial for weather the of remainder combined the mild are Due currently The Slide to to the quarter impacts first $X.XX which estimating driven quarter, it's net between largely year,

assumptions. details around provides revised earnings XX guidance Slide our

remainder from eliminating Aside known XXXX. the for guidance. with in needs QX, our of in previously equity negative assumptions forecasted the COVID-XX weather our These remain consistent impacts further issued any

to X for depending major service we've X% generally year. than said, seen commercial utilities at usage to during lines very a territories with March to At on residential the we've I'll We're X% electric at color. April, give our end modeled loads profiles. impacts customer some closely we've more territory. years through basis. up and that down and little in customer weather-normalized load Usage impact Electric varied speaking, watching remain expected events, our impacted overall high be the essentially a Utilities April, I'll major a the less metropolitan of X% the prior XX%, shows past of COVID-XX on our usage in Again, and areas. XX loads That emphasize coast tend seen and our the has Slide usage balance but consistent level, our

Dakota Colorado. usage few don't largest modeling Industrial from assumes XXXX, from Utilities impact to who customers Electric down more the electric in And a of impact remainder significant usage and our XXX in and impact the We've and the have few at them, slightly over usage The was in both expect been regular our industrials than reduced fact, but on reduced get in earnings a net of industrial a we are year forecast we in South for we there Colorado, actually gas. covering with side. have up electric although will customers, overall. customers our residential commercial the contact pickup are

quarters. comes as At our off-peak we're expect load Utilities, a March with most natural residential in essentially to lower usage gas season to remain Similar first in usage. years, compared Gas through decreases increases the and the QX and the our April overall usage seen weather-normalized through commercial heating basis, QX Electric be to and the impact and prior fourth our of season steady customer we've and through Utilities in of on

year Electric We compared have our through negative but minimal some Gas Utilities. it's impact Utilities, of the assumed the balance overall our at to

We're with also associated near-term the incurring extra costs the in pandemic.

X mission-critical more the electric are personal protective technology cleaning our are our We of to our on. supplies, utilities into and throughout ready protocols additional and have so spreads are sequestered do costs for deeply generation There territories. virus support so equipment, employees to incurring if we sites work-from-home at

assist -- we -- to we've do to work we We're while coming them steps increase our months. expect While not with delinquencies expect over taking limited to challenging proactive seen times. the date, limited delinquencies we've in customers do these to

determine certain savings cost-saving, expenses we costs. offsetting hiring, further other appropriate closely through partially tracking travel, in closely working with items, treatment We're we're planned outside training that O&M We're COVID-XX-related to services managing and our XXXX. slowed program. costs for our these and and our we continuous improvement were as on these of pandemic-related We've states are leverage regulators

the the it have and local service early Obviously, in customers difficult of duration our it's the crisis, economies will the in and on the and event it's to predict still territories. impact

is operating effect the $X.XX $X.XX assumption margins and of Our to of pretax expenses $X net equivalent to million, XXXX income by impact that lost to combined million $X will EPS.

While we or our less impacted be surrounding the year. on other navigate change remain of territories remainder our could we either our positively pandemic impacts the parts negatively country, assumptions optimistic, will than of as earnings the

economic of recent evidence we've rate illustrates track future other a through XXXX, in our disciplined our track growth and at in with XXXX, confidence and consecutive events. management increases $X.XX XX dividend record, XX on in XXXX dividend years our the historic We're demonstrating in to our increasing earnings grown years dividends deliver Slide strong potential. of annual

we XXXX, the for our payout dividend While may earnings XX% of slightly growth to above ratio go long-term ratio XX% payout long-term in confidence maintain we our EPS, XX% of prospects. target our demonstrating

With Linn. that, it back I'll to turn

Linden Evans

Thank you, Slide Rich. I'm XX. on

and our pandemic. to and allowed I well operating to responded, think, Our very planning us solid team's business we and the strategies be ready,

near-term commitment focus challenges. Our strategy and through our work our while our believe drives shareholders. excuse and long success strategy will customer-focused value our We to term the growth customers me, our these both now sustainable deliver for for for we community -- long-term

investing in are our overall reliability, for resiliency, positive customer safety, growth experience. an customers' We and needs

people, infrastructure, processes, long-term growth the and our expect the We above system serve and are our to utility average. safely technologies we aligning expansive our and on based to our customers the across more our deliver needs analytics better earnings

to opportunities growth expect realize along incremental from way. and generation other larger also projects the We

earnings and our the the diversity streams. our business seasonality illustrates of of strategic XX utility Slide

during of all positions through us stakeholders. stability diversity fuel we and our greater alongside as these geographic headwinds for uncertainty Our work

As has shareholders and added we've opportunities to Black providing value large invest. a and for diversification efficiency scale for territory, geographic of our grown, Hills customers through

Electric and of more businesses flows predictable from Gas earnings. total and and also consistent complementary Natural cash seasonality delivers Our mix

economic value times, other is from diversity utilities. differentiates which especially evident The us difficult of during

the immune of not diversity, While scale our with greater diversity and certainly geographic coupled our fuel pandemic, from this our provide us system we're impacts stability.

and population COVID-XX losing our our experiencing rural months. certainly allows The the currently jurisdictions largely low over the impacts of business Fortunately, lower cases. and impact on our not or things sight while of incidence our of reduced diverse demand density remained is further mix nation, territory many service in pandemics. much Also, businesses of a total operation for industrial perhaps past COVID-XX by open tempers to caused of of few relatively our territory of have like commercial residential, levels

growing large While we short-term the such this support customers, demand pandemic. closures near-term businesses through of results, -- levels centers, as of many our attributes continue business data the impact to our

large again, Slide XX our illustrates, infrastructure.

and Our across upgrade gas addition, maintain, significant our states require And to expansive opportunities. delivers systems strong presence a natural also to and of customers. electric serve investment growth in modernize geographic base our X

Slide capital plan Our XX. on investment illustrated is

on next customer X forecast $X.X and growth. will our initiatives customer that and primarily maintain the projects safety focused billion years, reliability is and Over foster

XXXX, After which our X and on largely the for will supplies or times capital managing forecasted experiencing than are investment earnings growth. we we currently through In availability uninterrupted. in result contractors far deploy track months, remain Our disruptions future more depreciation, exceeds are of not lead key in pandemic projects. now to the for components planned and materials

necessary, but on We closely adjust, and supply remarkably if are will we chains, capital deployment our is and now, our track. for can monitoring

to at recurring of utility systems across continue base for in expect supporting capital, We million primarily and safety utility large growth. and normal $XXX maintaining customer our least integrity a

include occur approach expectation. our the base capital prior capital then support in will opportunities period, forecast. we over as a we in capital noted certain clarity projects to and incremental years. are we around recurring gain to We especially customer as capital relatively we plan relatively take comfort As And in that our the We are quarters, conservative investment growth. likely add outer opportunities more that additional anticipate represented

our Slide focused This plan XX. timely illustrates of utility these is on with recovery capital to most investments. Moving

category, our of our with quarter, utilities transparency improve is continued rider-eligible XX% recovery, part lag into We've detail XX% previously. adding category. forecast these in getting XX% minimal from X-year forecast capital as You'll with up capital this included the note which that investments capital our timely of a of is was which to previously

and total X-year driven forecast, which is capital integrity. approach, rider focused our our of As system programmatic more by safety, customer and than X/X on you see, reliability is this capital can is

to XX. Moving Slide

We are operational serving customers. focused in our on excellence

better continues average. utility performance safety be than team's the Our to

of On Effort the recognized were success or Index. This under that utilities the right our Business and top XX% the recognized recently we Utilities Do one achievement Easiest exceeding to customer side of meeting working customer a as With, Customer several this that scoring goal slide, we recognition the the and experience years. our we've transform are to the expectations, confirm on helps past for been of

long-term customer-focused Slide XX executing illustrates of returns. results strategy, total shareholder delivering our strong

XX, Slide service, year see group our major categories: growth, initiative valued our X to then every you'll And better XXXX customers. scorecard. great into and And you, We publish every ourselves and scorecard workplace. day goals our our hold shareholders accountable to major our profitable we a to strategic

let our very operationally, strategically, of to mild responded earnings, quarter I'm we recap to I of except year. successful first weather and me by quarter when and financially the we how that impacted compare think So a proud of quarter had experienced for the impacts quickly team especially last during saying, very weather this adapted we COVID-XX.

team ensured up, to we safely Our both customers reliably. and we continue serve and our stepped

our our position on financial kept also investment and we track. Importantly, maintain program strong capital

Looking reopen sure we make their local economies, states energy we've available start support to those to seen forward, the and we'll communities and have already efforts.

questions. our That to we're entertain prepared happy concludes remarks, and

Operator

Instructions]. [Operator

with Dumoulin-Smith comes first Bank America. from Julien of Your question

Ryan Greenwald

is on Ryan This for Greenwald Julien. actually

So start going Colorado. with a Obviously, could maybe if on we lot there.

gas be the And a to here, your the or recovery you bit provide you it thinking from guys Colorado kind impact assumptions? more around how can then As RRR an of are another whether the options written and file for rate hearing, CapEx embedded order your granularity of case? we're about waiting

Linden Evans

that we -- before, the said important would are to decision. rate It us Ryan, we waiting for of for terms the In be review, as we're read decision.

decision, of review indication there now, once review with nature. at we're there ALJ I were for months and a trying that reviewed As many was the which just that haven't resolve to or some I issues of rate things too consolidation that couple

the for important actual how -- order, you be us, not think if going to to written a see maybe very or -- lay if I tries it's the So path will. commission whether out to

into So that take we'll consideration.

we And several have options. as you indicated,

but acronym called RRR kind We decision. get to have of an opportunity of the to SM option. won't reconsider the back their what's right, it's to I a That's go in review commission Colorado. one

-- kind Another third Office court see option and rate only they to to through that of do in after what course, the lay file again, us. best is may OCC, another Counsel, you be option would already, review, of order, appeal could then well what might as which decision perhaps Ryan, and before as a going indicated with, read certainly state commission's we then, with we've, a determine Consumer and Talk of staff of path course, be steps forward. the

the are capital, to respect With we reliability. and capital for investing we that think is prudent the customers' safety

intend growing of state to that is in is that continue state Colorado, to a invest us. capital watch it for the we certainly will But capital We closely. which

Ryan Greenwald

in guys of rider there, And eligible? are Got you it. then terms that assuming recovery becomes assumptions your

Richard Kinzley

Ryan. This is Rich,

approved the denials ALJ the that of rider. was One is that made and the

rider wouldn't we So mechanism get to it in that place, until eligible. move

Linden Evans

true. It's

Ryan Greenwald

you the could participate touch expectations And early well as on terms enough. your of the in in And just play ability early any to as today? then your then blow Fair thoughts renewables? vote on

Linden Evans

did We bids. bids RFP. low bids the Renewable would receive relatively, I The Advantage in solid very say, were

again, money on report. seen then company have At to of adding save those anticipate this we that final we renewables. the our personally, we But we not in participate expect will behalf -- don't opportunity customers. So point,

Ryan Greenwald

And play it. that early terms thoughts in things of are then blow, that Got any you're today? hearing

Linden Evans

the vote. Yes, final day the early today is thoughts. of Well,

turnout. in understand that mailed strong ballots in. been heard lots We ballot, have it. We a strong It's mail-in have so interest very

allows customers We XX continue are as that serve hopeful us future. years the for into to foreseeable we a have for the past to decision those

hours, question. perhaps, that an XX, XX we'll next to maybe answer the in So have

more much come to there. So

Ryan Greenwald

Got it. of in have while Wygen lastly, discussions on just And resolution terms settlement a going been for know for here. then timing here. I

constructive a options of your in terms latest resolution. not and you're then timing, spots-on just reach to if So able

Linden Evans

you for Thank Yes. question. that

We are now. negotiations in

in I well those So to I we and negotiations We say. cautious should want go think to continue to proceed. very be what

involved a are FERC, we're we So is who in parties, all the including with discussions, overseeing those. settlement judge the assigned by And participation active in that. in

question. we're if more think may fact that settlement that I closely, reach shouldn't other probably we a all aren't should able to except the have I So much we options I to and need pursue probably that the to side beyond speak very that's that that. watching on we say,

Operator

next question Andres Our comes from Crédit Sheppard Suisse. with

Michael Weinstein

a rate bit speaking. is of focus talk kind filing? -- that about this going Could this on What's Mike Weinstein to that the summer? you little Actually, what's Nebraska

Linden Evans

focus will number we the the It's of made several case primarily had years. recovery the over filed filing rate since investments years last a in upon Nebraska. that That we been

invested we've is the Colorado. utilities are the with of in X do It have -- into capital to years over trying there customer bit and now to respect to consolidating similar to one support a quite rates single growth. Tariffs we Wyoming in utility. also on and So focuses accomplished what

intend year pandemic. with the So said focus have We case we quarters there? for to file the that several will be what that this mid

I And those be productive. We continue at understand Nebraska. with conversations to visit to continue staff

to when may well. a understand, would as it's our for a the final we being team, file. say made business a I filing sensitive of in is and what's when timing However, we've would particular to as as decision that customers we and good matter file so and that a not company I Nebraska case the largely, as prepared,

Michael Weinstein

quarter recover What bit maybe electric about guidance. Understood. could it. the if and second improve, after impact And gas quarter the and response you Right a much the assumes now, Got does second guidance the period little of usage have throughout year-end? more year. that happens How will talk guidance more we be -- would the an much extended continue more not of throughout to pandemic would on affected? you the your how

Linden Evans

planning. And and scenario of a to about Good me question, let talk Rich Mike. I'll ask high kind level, at our respond

lot scenario As Rich his in indicated planning. a done comments, we've of

like response has doing, been that been feeling, they're in In fact, oil caused industries, gauging -- the territories, of the largest how prices. their XXX recognizing things other we've what our and spoken to customers pandemic by to and trying gauge pandemic have our oil across low different they're to over what

of gas Now and but don't plants things serve we the serve nature as ethanol an oil we and directly, that industry example.

done scenario we've of bit a So planning. quite

will. electric our that the AMI, I we're to And then the daily. think, we business. essentially essentially the peers so coast. what on importantly, there. territories, electric seen on if utility daily you on we side the watched get AMI all listening home, XXX% of what side, we're And we're as to attention have seeing paying what closer to We reports We're as in We essentially they've get across experiencing, our

operate. very we, So put preparing team on focused early under pandemic, our on might the which we scenarios different very

we of we're the not X% what that third with to through then said and not have begin And of second we've loads. knows. this quarters is rebound of real predict, epidemiologists, the We idea to and forward. we in may We We them, go as things in anticipate well the we low the stay watching we'll and to a everybody early as tried We've fourth have while there essentially did decline kind to closely going to not load quarter. think anticipate -- And that we to kind that is listen we a are nature. we rebound. XX% emerge be

I if detail a give approached planning. of can analogy, middle the have And kind would about used will, you you fairway, the of analogy like take the with how please. So scenario little maybe sports more of the we've our pardon that, I Rich,

Richard Kinzley

Yes.

on to gave fully the One reduction. commercial just good at to not that to the what we've he least upside. load. offset prior and very That's clarify, I really in basis. thing, March on a April seen there. partially, do if is more on load overall on That's weather-normalized XX% side We load to pretty flat think expect said residential X% the really has been completely Linn optimistic a years overview that

Now looked variety a at different our scenario we of scenarios. planning,

Certainly framed year. the we've probably of as the one. some then we how it quarter second into through get middle Linn's rebound think impact as expect road analogy the and third That's a best of up. of the continue continuing kind We we the through is quarter. slow well I do

Linden Evans

all if to will, the ahead try curve. territories, pandemic authorities we got our flatten you curve as on of, the the In the

at largely, we've discounting been low some And But in for, certainly so relatively who cases you ill, other in relatively Arkansas all. argue, except virus, has had our relatively, anyone not positive and for states territories, not could the Colorado. But unimpacted.

able or to it's be nature, So businesses lot our pace, now at the have our we of official a reopening, economic And the been slower to economies. will. intentionally the continue a you to as impact interesting closed happens within just it's territories, very over week next two been more what Mike. because an of if see rural with have And our going of

helps that you. hopefully, So

Michael Weinstein

guidance quarter say, right. your be you're doesn't All gas of assuming in would any though, fourth that load, a because issue by reduction that include right, mostly that. kind to recovery fair Is a it and

Linden Evans

that's think I Yes, fair.

Richard Kinzley

third probably some you it We way quarter coming I think we're impact by by fourth side fourth that quarter, a gas in and said the minor do the and and year-end. quarter back It's on the in is anticipate second the the bit fair. little but

Michael Weinstein

many Okay. What midpoint the payout of that kind internally XX% Is ratio? you timing out? have -- to dividend for years achieving XX% that how of do

Richard Kinzley

We haven't disclosed that.

haven't better anything a think in yet think of that. terms way about guidance. I Obviously, beyond we XXXX to earnings disclosed

payout answer earnings support that So my that I long-term said what won't script, I ratio. just growth directly. reiterate in prospects I'll our

Operator

Instructions]. [Operator

Russo question Sidoti. next Our from comes Brian with

Brian Russo

the answered. to was quarter? A have my used million of million $XX been in curious, asked and $XX questions of first lot in that guidance, much But PTCs how just of your the

Richard Kinzley

actual things through quarter. year. actual credits. accounting, credits of proportionally comes each have it to hours of The kinds produce those through the FIN those But megawatt generated occurs the with our generated production we recognize that income those XX tax actually evenly pretax Well, to in

recognized year's tax we production in -- first make those the of sense? the full XX% expected credits. year's production that XX% quarter. of full The Does really expected about So

Brian Russo

COVID-related be at $X.XX might all what then of And great. what's to net between the $X.XX related sales Okay, expenses? headwinds, down could you versus break that

Richard Kinzley

utilities. that. I and all not that kinds we're intentionally models have bad those But of detailed obviously, calls And us just other mean, there. guess things. doing We have intentionally all at loads, we our in We're all because debts is on best. opinion, disclosures, that other too throwing darts not get the we're internal real at both done pandemic. -- People our that early we've looked from the in the

frame we've So approach. up chosen that in bucketed to it

Brian Russo

I look it's net And little imagine $XXX of million -- debt-to-cap it's Got because then it. would offering down the come Obviously, Understood. to you cap. equity range? a in into take of bit. debt completed the of for how When February. years, XX% low to you we that through do couple the get mid- or XX% to long going next it's think to

Richard Kinzley

to the equity mid-XXs. first biggest couple years. the want It more earnings is Yes. in earnings issuance of retained helped. And out. just is quarter Obviously, dividend We get the the quarter first a $XXX -- to beyond our take that contributes then should biggest to one paid the quarter fact our our million

years going answer point basis XXX it's to X that to where take your to want be. drove But to reduction. really question, X, that more So we get

Brian Russo

and that the plant? about volume What demand reduction Just year? the get Wyodak trying for out in feel Is first Is just in the to decline the a year-over-year. reduction -- outages. I the we time electricity? of And planned it. the XX% for that to should volumes just due throughout kind quarter and a -- be Got Mining planned understand on segment, expecting

Linden Evans

fact primarily there been constructed are in the been wind has reductions so state the of that much related Wyoming. have Those to

So it's dispatched first.

in And operating where transmission at it's full oftentimes or capacity. so position put of constraints the not the transmission Wyodak lack a can

of demand the we'll as on a of the is little -- electricity the a going less state in with see it on So renewables for a increase goes reflection of It's reflection how the that forward. it's Wyoming. less

Operator

further ahead, With back remarks. Go return will Linn for Evans call questions, I the to closing no sir.

Linden Evans

Again, Thank we'll everyone to Please face-to-face for safe look our joining continue as you, soon we stay can. well, be you to thank us as everyone call. Daniel. actually and forward to seeing on and today

us joining so much thanks So today. for

Operator

concludes for your participation in you today's the This Thank conference. presentation.

now disconnect. Good may You day.