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#Morning <UNK>.
Absolutely.
And I have said that in my prepared remarks.
It's cash flow positive through 2018, and we haven't talked to you about beyond that.
I'll let <UNK> answer the question in detail, but I think we're confident we can raise whatever we need in order to keep that business going, in terms of refinancing existing obligations.
I do not see us leveraging that business more in order to keep it going.
Well, I would say this.
We are committed to telling you what this Company looks like once we have the Ohio case done.
If the timing works out for us to do that at EEI, then we'll do it at EEI.
If the timing doesn't work out for that, then we'll have a meeting that's specifically designed around telling you the outcome and what it does to our Company, whether it's an analyst meeting or how we it that, but yes, we're going to communicate that to you as transparently as we can.
Well, I don't think you should think about the $500 million, I mean we told you we're going to issue $500 million of additional equity this year.
<UNK> mentioned we have already invested over $3 billion in transmission growth capital with another $1 billion planned next year.
You all look at those numbers the same as we do.
I'm not going to speculate on an outcome in Ohio right now.
When we know that outcome, we will know what the impact it has on our credit ratings, and then we will do what we need to do.
We have got a number of other strategic objections that we can execute that we will, but I think it's premature to talk about what all of those could or could not be until we see where we land in Ohio.
Good morning, <UNK>.
Well, first of all, when we met with them earlier there week, they told us you guys all talk to them a whole lot more than we do, so I think it's pretty obvious out there what they expect us to get to, and in terms of how we're going to get there.
I just said the Ohio ESP is a big piece of the puzzle that we have to get answered, before we can talk about what the next steps of the puzzle are.
I think it's likely that both of the agencies are going to publicly say what their expectations are here in the near future, both for the competitive business, and for the rest of this Company, but we're focused on keeping our investment-grade credit ratings at the holding company, and for every one of our regulated entities.
Hey <UNK>.
This is <UNK>.
I would think that the expectation is that we would need to achieve an FFO at 14% at this point.
And they would not be looking to change that in the near-term.
As <UNK> said, we ultimately intend to be a fully regulated company.
We got to wait and see what comes out of Ohio, as <UNK> said.
Good morning.
Yes, we follow you.
From our standpoint we're not expecting that we're going to issue any more senior unsecured debt.
So I think the way we're looking at it, <UNK>, is we want to at least maintain where we're at right now, and our goal would be at the S&P level to gets the corporate credit rating ultimately notched up one that would also notch up our senior unsecured.
From a Moody's standpoint, we are already at investment-grade.
So that's the way we're thinking about it.
Well, we just filed our rebuttal testimony, and attempted to point out what we thought some of the potential things that the staff missed in their testimony might be.
I think some of those are pretty obvious, and even the commission staff in their testimony agreed that there were adjustments that were made, or need to be made to the initial number they came out with.
So I am going to answer this question the way I've always answered.
I'm not going to speculate about things that we don't know about.
So we've got another couple of months to get through this case in Ohio.
We've been waiting patiently for two years and three months to get to an outcome here, and with only a couple months left I'm not going to start guessing at what the outcome is.
We're going to get the outcome, we're going to deal with that outcome, and we're going to move forward, and we're going to mover forwards in a way where we expect to maintain investment credit for our holding condition and all of our regulated entities.
The 14% that's the threshold that Moody's has designed.
From our standpoint, we're targeting at 14.5% to 15% of FFO.
But that 14% is Moody's.
That's correct.
Yes.
That gets us above the threshold that they have set, but again our target is 14.5% to 15%.
I think it's an iterative question.
We'll continue to do the employee benefit program and stock investment program, but as <UNK> said earlier, I think there's a big piece of the puzzle that still has to fall into place, before we have any further consideration there.
As we have said this $500 million that we expect to issue, we expect to contribute that equity to our qualified pension plan.
The units we shut down or said that we were going to deactivate by 2020 was just unit 1 at Bay Shore.
The only unit we have, and it was Sammis 1 through 4 at Sammis.
We have never disclosed what those would be from an earnings standpoint, but when you look at the total, including the capital that we would have to invest and the revenues net of their operating expenses, it will make us improve our cash flow going forward.
That's essentially the reason we decided to deactivate those units.
We have not baked July weather in the guidance.
As I said in my comments on the script though, July was a very warm months and our plants ran very well.
So I would expect that we will have some weather improvement in July.
As far as the equity, we really can't comment on the timing of the equity transaction.
However, I can tell you our earnings guidance is conservative, and assumes dilution starts in the earlier part of the second half of 2016.
And we have planned normal weather for the rest of the second half of the year in our guidance numbers.
<UNK>, this is <UNK>.
From my standpoint I would say in all of our jurisdictions, we will be earning right in line with the authorized ROEs.
As you know a few of the jurisdictions, they have what is called black box settlement, where they don't come out and say particularly exactly what it is.
But with the filing we have in New Jersey, the four utilities in Pennsylvania, where we are in Ohio, that essentially covers all of our utilities, with the exception of Maryland and West Virginia, and we just had the filing in West Virginia a little over a year ago, and Maryland we're seeing some load growth there.
So I would say we're earning right in line with all of our ROEs.
If you look at New Jersey, the rate relief is associated with our capital investments we have made since mid-2012.
We have had about $600-some million of investment there.
So we're not earning on that capital right now.
So I would say we're probably slightly underearning there.
In 2016 we would expect that we would have a decision in Pennsylvania by January 27.
So our guidance would include earnings that would get us pretty near to what our ROE expectations are.
Morning.
This is <UNK>.
I would say we're not looking at any type of new legal actions or anything to ring fence that side of the house.
The way you should look at it is, there's no cross defaults on any of the financings that we have out there, or the credit facilities.
FirstEnergy Corp.
does guarantee about $1.25 billion on that side of the house, and it's really made up of about $1.2 billion of our underfunded pension OPEB and EDCP costs, and then there's just about $50 million associated with contracts that FES has.
So from my standpoint there's no thought about ring fencing, but that's just where we are with that side of the house.
Well, I don't think that's something that we have been contemplating at this point.
The business is still cash flow positive.
We intend to make every effort to ensure that those assets continue to run.
As <UNK> said earlier, if we get to a point we may look to deactivate or sell some assets, but I think that question is much further down the road.
I was just speaking to what the guarantees are by the holding company.
Yes.
<UNK>, this is <UNK>.
We have pulled back a little bit with where we're at with Sammis 1 through 4, we expect very little production out of those machines going forward.
They'll still be available, but we see very little production coming out.
So we have reduced kind of what we'll produce in the range of 70 to 75, and that's very dependent on what the forward market does.
And then we have about 5 terawatt hours that we purchased through wind contracts, OVEC, that sort of thing.
So we'll produce about 75 to 80 terawatt hours going forward.
Good morning.
This is <UNK>.
So we previously filed the IRP.
It showed a need for generation going out a couple years from now.
But that case right now is concluded, so there is nothing that would, unless we were to file something, initiate something, that would come out of that case.
So we would be looking as we go forward, and continue to monitor the forecast for that company, to see how we might want to present something consistent with the IRP, in terms of bringing additional generation to Mon Power.
Correct.
There's no time line associated with that.
We would initiate it when we believe it to be an appropriate time.
Yes.
This is <UNK>.
Most of the increase we had some benefits that flowed through in the second half of 2015 that reduced the tax rate down to 36%.
We don't expect that going forward, so I would think that 38% would be a more normalized tax rate.
That's right.
Yes.
I would say that's a representative number.
As you know, we have about $6 billion of debt at the holding company, some of that is what I would say variable rate debt.
So if you make an assumption that interest rates are going up, then you could see a change to that, but the biggest component is interest expense, and about several billion is subject to variable interest rates, so you could see a change in that if we had an upward movement in interest rates.
Good morning, Ray.
I'll take, there was three questions in there so I will take the first one and that is, I have already answered it a couple times here.
We're not going to speculate about Ohio.
There's a whole wide range of outcomes.
The staff at one point of the corrections we made to the staff testimony got that number up over $500 million.
I think we have got to let that process play out, see where we're at, and then we will take whatever steps we deem are appropriate to maintain our investment-grade credit for our holding company and our utilities.
And those steps are so wide ranging depending on the outcome from Ohio, I don't think its good to speculate about them so I'm not going to talk about them.
I'll tell you what we know when we know it.
On the second question, I think <UNK> already answered it.
We're not looking at doing anything to legally ring fence our generation business.
But as I said we're not going to use any equity to support the credit ratings of that business.
We're operating it in a fashion that's cash flow positive, and we're going to make whatever decisions that we need to make on a unit by unit basis, to deactivate them, sell them, in order to keep that business as positive of a member of the FirstEnergy team as we can.
Ray, this is <UNK>.
I'll take your final, the third question.
Irene and her team they continue to have discussions with Fitch about potentially reinstating the ratings.
So I think we're having very good dialogue with them, and we should be in a position to update you probably later this year.
Okay.
There aren't any more questions on the board, and we're running towards the end of our hour, so thank you all again.
I know we had to make some very difficult decisions last week.
We look forward to talking to you more about that part of our business when we see you all at EEI.
And just thanks for all the support that you have given us.
