ETR
#Sure, <UNK>.
With the growth in investment and rate base and resulting earnings growth at utility parent and other as we have been mentioning for some time, it is our objective to provide a glide path into a consistent more predictable dividend path.
As we have mentioned in the past, we have taken more of I guess a lumpy approach to it where we raise it 29% one year and then we take a few years off and then we raise it $0.10 or something like that.
So as we look out into the future consistent with our expectations around the growth in the utility, parent and other segment of the business, we are kind of on a glide path so we would hope to provide a consistent growth that will work its way into that payout ratio over the next few years.
Correct, correct.
At any given time we might be over or even under depending on how we are growing the business and then obviously it takes into consideration the reinvestment that we have and the opportunity in the Utility for all of the items that I outlined that we have put in the disclosures.
First, <UNK>, we take the operations of the fleet obviously the safe, secure, reliable operations of the fleet very seriously.
We did have a couple of issues that compounded on each other at both facilities to get us into Column 4.
We would anticipate that this is not going to happen anywhere else and that we will work our way out of these judiciously and expeditiously with the NRC over the coming couple of years.
No.
I can't really comment on that, <UNK>.
We did work to try and come up with some way to extend the life of Fitzpatrick and we weren't able to do that.
It is in everybody's best interest but it just wasn't possible.
But the state officials worked just as hard as we did as I mentioned in my script to come to a solution.
Some things are just difficult as you saw from the disclosures, there is a lot of money lost at the facility and that is certainly a difficult thing to overcome.
We certainly aren't out looking for any kind of political issues.
Thank you.
This is <UNK>, <UNK>.
From a cash flow perspective, we are going to be cash flow positive over the next few years consistent with the disclosure there of to $225 million to $275 million and so that is the biggest piece.
I think that comes from the fact that we are basically operating at a loss there and we are also ---+ would be incurring costs associated with capital and refueling going forward.
So I think those are the biggest things from a cash perspective.
From a net income perspective, there is a lot going on.
Because of the impairments you are going to see the costs associated with the refueling outages and the fuel and expense that we have, those are going to be reduced considerably obviously.
The depreciation is going to come way down.
The one thing that is a little different for Fitzpatrick is the decommissioning costs, the decommissioning expense, that is currently the fund is still sitting over with NIPA and so we won't see any changes there until a point where we actually get the fund and the liability over to us.
So that is a little different than Vermont Yankee and Pilgrim going forward.
So those are some of the main drivers that you will see I think as we are thinking about the income statement for that business.
I think $225 million to $275 million is ---+ that is materially accretive to me in terms of cash.
The earnings piece is going to be accretive but it is not going to be hugely accretive up front.
There will be some accretion in 2016 and then in 2017 we will start incurring the decommissioning costs and stuff like that.
We are going to provide some better transparency around what we think the drivers are at the EEI Conference next week.
<UNK>, this is <UNK>.
You mentioned the 5% we were guiding to.
I think we started the year at about 4.4% for 2015 and what we have seen is our new and expansions have come online, they have come online as we said a little slower.
Some have been delayed.
The ramp ups have been slower than anticipated but what we have also seen in the first two quarters of 2015 was we saw some volumes, lower volumes with our existing customers and as you recall in the first couple of quarters, that was really had a big impact on the lower than expectations in terms of the industrial sales.
As <UNK> mentioned in his script, we saw a comeback relative to that in the third quarter especially in the petroleum refinery area and from that perspective in that particular segment, we expect to see that returning to the levels we somewhat expected as we go forward.
He also mentioned in the fourth quarter we have both an existing probably in the chlor-alkali sector that is going through some outages and we won't see ---+ likely not to see the volumetric changes in the fourth quarter that we saw in the third quarter but again, those are outage related.
And as <UNK> also mentioned you generally don't see a relative relationship in terms of revenue change, relative to volume change when that happens with existing customers.
In terms of the drivers, I think we are seeing some things that others are experiencing, stronger dollar, kind of weaker commodity prices and it is challenging our expectations.
As we said before, what we see happening primarily is delays in some cases and as I said earlier, ramp ups not happening as soon as we had thought but we will provide more color around that at EEI in terms of really diving more into what we expect to see in 2016 and going forward.
This is <UNK> again.
I will start and <UNK> may also have comments relative to this.
But if the two are related, the growth as we all know in this business is really driven by rate base at the end of the day and from our perspective our investment thesis is still intact and we see the opportunity as we've laid out in the past to continue to make the investments that we have talked about.
And it is not so much dependent upon the level of sales.
Sales is an opportunity for us to mitigate the impacts of those rate base growth changes and clearly with our sales volumes, we have the opportunity to mitigate that probably much better than maybe some others that you see that don't have the level of robustness as it relates to sales growth.
Again, the volumes do help in terms of getting to ROEs and as we have shown in slides before it is really a combination of the two to some extent.
But again, the growth is really tied to the investment thesis and that thesis from our perspective is still well intact.
Yes, this is <UNK>.
I will just add that the big drivers are going to be getting the union deals done and then the regulatory actions in Arkansas and in Texas and getting those resolved primarily to get the investments that <UNK> is talking about and to rates.
And then the sales growth is going to be helpful but it is an element of lag reduction as we see it.
And there are some O&M benefits out there, we have talked about earlier ANO rolling off hopefully by the end of next year and then we continue to see our pension expenses coming down and we do see some higher operating costs this year because of some of the nuclear compliance cost and other things that we have seen.
So we expect that to moderate a bit going forward as well.
So those are the main drivers, they shift a little bit of as you go from 2015 to 2016 and then to 2016 to 2017 but they are pretty much the same.
Yes, the goal is to get out of Column 4 and reduce the compliance costs associated with being in that regulatory situation.
<UNK>, this is <UNK>.
As we have talked on previous calls and I think like most other utilities, we are seeing energy efficiency impacts, Federal programs as well as programs that we have specific to our states.
We have generally talked in terms of organic residential growth in the 1% area and we see that somewhat being challenged through this year and we saw it somewhat last year as well.
In terms of third-quarter, we had two years where we had fairly moderate weather last year and fairly positive weather this year and when you see those swings like that year-over-year, sometimes the adjustment in terms of weather for periods like that gets a little challenged.
And so we continue to watch and monitor the residential sales volumes.
I will note also we saw 1.2% growth in commercial in the quarter as well.
But it is something we pay a lot of attention to and continue to look at.
I don't know from our perspective, we don't see a kind of flat to negative as a trend but it is something for us to continue to monitor as it relates to our view of our organic residential growth.
This is <UNK> The safe store option is the one that gives you the most time to allow the fund to grow to meet your decommissioning needs so that seems like a likely candidate but I don't know if <UNK> <UNK> wants to add anything in.
Yes, so again we will have to go through and calculate our costs.
We've got $728 million in the fund and we will go through the same process of looking and forecasting when the fund would grow to have an adequate amount to begin decommissioning.
According to the NRC you have to have it fully funded before you can start.
So it will be some form of safe store, probably won't go to the end of six years but depending on that cost estimate, it will be out in the future some.
No, nothing that we are aware of at this time.
We are not really going to get into any of that.
We can explain the RMR issue, we are not going to obviously discuss any details of our discussion.
But we previously had the New York ISO so do some analysis regarding the Fitzpatrick plant as to whether or not it qualifies as a reliability must run and that most recent analysis indicates that it does not.
So we have submitted our notification, shutdown notifications to the PSC and the New York ISO as of today.
They will have to update that study but we certainly do not expect that answer to change.
As <UNK> suggested, all of our discussions with New York are really confidential and not appropriate for us to comment on any details.
Thanks to all for participating this morning.
Before we close, we remind you to refer to our release and website for Safe Harbor and Regulation G compliant statements.
We will file our quarterly report on Form 10-Q with the SEC later this week.
The Form 10-Q provides more details and disclosures about our financial statements.
Please note that events that occur prior to the date of our 10-Q filing that provide additional evidence of conditions that existed at the time the date of the balance sheet, would be reflected in accordance with generally accepted accounting principles.
The call was recorded and can be accessed on our website or by dialing 855-859-2056.
Replay code 60315863.
The telephone replay will be available through Monday, November 9, 2015.
This concludes our call.
Thank you.
