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Hello and thank you for standing by. My name is Bella and I will be your conference operator today. At this time, I would like to welcome everyone to DTE Energy Q1 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Matt Krupinski, Director of Investor Relations. You may begin.

Thank you and good morning everyone. Before we get started, I would like to remind you to read the Safe Harbor statement on Page 2 of the presentation, including the reference to forward-looking statements. Our presentation also includes references to operating earnings, which is a non-GAAP financial measure. Please refer to the reconciliation of GAAP earnings to operating earnings provided in the appendix. With us this morning are Jerry Norcia, Chairman and CEO; Joi Harris, President and COO; and Dave Ruud, Executive Vice President and CFO. And now I’ll turn it over to Jerry to start our call this morning.

Thanks, Matt, and good morning, everyone, and thanks for joining us. I hope everyone is having a healthy and safe year so far. This morning, I will discuss the achievements we’ve made this year as we continue to deliver for all of our key stakeholders. Joe will provide an update on the significant progress we are making to improve reliability for our customers while maintaining affordability. Additionally, she will provide updates on our renewable energy investment that supports our path to cleaner generation and data center opportunities that provide potential upside. And Dave will provide a financial update and wrap things up before we take your questions. Let me start on Slide 4. We’ve had a strong start to 2025 and are well positioned to meet our targets this year. Our success is a testament to our dedicated and engaged team committing to serving our customers and our communities. This year, we were recognized by the Gallup organization for the 13th consecutive year with a Great Workplace Award. And our employee engagement ranks in the 94th percentile globally amongst thousands of organizations. As I’ve mentioned before, our high level of employee engagement is our secret sauce, our continued success. We remain committed to making the important investments to enhance the grid and improved liability for our customers as we are committed to reducing power outages by 30% and cutting outage time in half in the next 5 years. As we continue to make these significant investments in automating and strengthening our grid, we see that the investments are working. We told you earlier this year that investments in reliability helped achieve a 70% improvement in time customer spent without power in 2024, and that metric has improved another 60% year-to-date versus last year. We are also performing above our aggressive targets for our operational metrics, including reliability and plant performance. In addition, our team supported our neighboring utilities to help restore power outside of our service area after a historic ice storm, wreak havoc in that region at the end of March. I know the state utilities and their customers are very grateful for our assistance. We remain committed to investing in the communities where we live and serve to support Michigan’s economy and employment opportunities. In 2024, DTE invested $3.3 billion with Michigan businesses creating and sustaining more than 14,000 jobs across the state. Last year, DTE invested $1 billion with certified diverse suppliers and nearly $1 billion with companies based in our home city of Detroit. As I said at the beginning of my remarks, we are off to a strong start this year and are well positioned to achieve our 2025 targets. Our 2025 operating EPS guidance range of $7.9 to $7.23 with a midpoint of $7.16 per share, which provides 7% growth over the 2024 original guidance midpoint, and we remained well positioned to achieve the higher end of our EPS guidance range this year. Our long-term EPS growth rate target remains at 6% to 8% with 2025 original guidance as the base for this growth. And as I mentioned on our year-end call, we have a 45

Thanks, Jerry, and good morning, everyone. As we discussed on our year-end call, DTE has a significant customer-focused capital plan, investing $30 billion over the next 5 years, with well over 90% of this investment in our utilities. At DTE Electric, we plan to invest $24 billion over the next 5 years to significantly improve reliability for our customers and further transition to cleaner generation supporting the success of our voluntary renewables program and Michigan’s clean energy legislation. And we are doing this with a continued focus on customer affordability. As Jerry mentioned in his opening comments, we are confident that we do not have significant exposure to tariff impacts and we continue to be in a great position to execute on our plan. Our grid modernization and renewable programs are on pace to deliver the targeted performance. Starting with our reliability efforts. We continue to make significant progress, building off of our success we achieved in 2024. In 2025, we are expecting to exceed last year’s efforts by installing 600 smart technology closers after installing 450 in 2024, completing 950 miles of pole top maintenance, replacing 5,500 utility poles, an increase of 2,100 pools being replaced from last year and turning over 6,500 miles of trees a significant increase from last year’s total of 4,300 miles. We are committed to our infrastructure investments and are focused on improving reliability for our customers, and the investments are working. As Jerry mentioned, our electric grid reliability has continued to show significant improvement over the past 2 years. And during a recent high wind weather event, we had one of our fastest restoration with 95% of our customers restored in 24 hours and nearly 100% within 48 hours. And we are making great progress toward our goal of reducing power outages by 30% and cutting outage time in half in the next 5 years. Our recently filed electric rate case is an important step in our customer-focused investment agenda. This filing addresses our continued infrastructure investments designed to improve reliability and generation investments to bring cleaner energy faster to the state. One important item to note in the filing is the request to advance the infrastructure recovery mechanism or IRM. Our previous order approved $290 million for 2025, and we are looking to increase this to $1 billion by 2029 in the current filing. This filing is consistent with the electric distribution audit that was completed last year, which confirmed that our proposed investment plan will deliver the dramatic improvements in reliability we have committed to our customers. We continue to deliver top-tier affordability through superior cost management, operational excellence with our power plants and one of the larger energy efficiency programs in the country. Our historical average annual bill increase is much lower than the industry average with our annual bill increase since 2021, well below the utility Great Lakes average and the national average through 2024 and also well below the general rate of inflation. Of course, as we continue to invest in our system and as these incremental opportunities come into our plan, we remain very focused on maintaining customer affordability. Data center opportunities, along with our distinctive continuous improvement culture to drive cost management will continue to support affordability for our customers. Let me move to Slide 8 to highlight progress in supporting our clean energy transition with potential increased load growth. We have plans for significant investment in cleaner generation over the next 5 years and into the next decade, significantly increasing our generation of both solar and wind as well as battery storage. We currently have well over 2,300 megawatts of renewable generation in service, and we are building 800 megawatts of renewable energy per year on average over the next 5 years; solid land positions, combined with our ability to successfully move these projects through the interconnection and permitting processes, provides the pathway to execute these investments. This progress has allowed us to safe harbor investment tax credits for these renewable projects through 2027. And with the support we are seeing, we remain confident that key provisions of the IRA will stay in place, supporting our ability to execute these investments affordably for our customers. So we are in a great position to execute our transition to cleaner energy, preparing to serve our customers for years to come. We are also well positioned to serve increased load that may come into our service territory, mainly from the potential of significant demand from data center development as well as further economic development in Michigan. We are currently making great progress with data centers executing nonbinding agreements with 3 different parties for projects totaling 2.1 gigawatts. We are also actively engaged in discussions with additional opportunities as we continue to work with a number of hyperscalers and colocators on opportunities within our service territory. As you know, key legislation was passed for the sales and use tax exemption and this has helped us further progress discussions for data center projects. Excess capacity of up to 1 gigawatt puts us in a great position to serve this demand quickly. These projects require some additional investment to support the early load ramp in the near term. and will provide longer-term investment opportunities in new baseload generation, which would be supported by the 2026 IRP. And as we have said, these data center opportunities are all upside to our 5-year plan. And with that, I’ll turn it over to Dave to give you a financial update.

Thanks, Joey, and good morning, everyone. I’ll open by saying that 2025 is off to a strong start, and we remain positioned to achieve the high end of our guidance this year. Let me start on Slide 9 to review our first quarter financial results. Operating earnings for the quarter were $436 million. This translates into $2.10 per share. You can find a detailed breakdown of EPS by segment, including a reconciliation to GAAP reported earnings in the appendix. I’ll start the review at the top of the page with our utilities. DTE Electric earnings were $147 million for the quarter. Overall, DTE Electric had a strong first quarter and is on track to achieve full year guidance. Earnings were $47 million lower than the first quarter of 2024. The main drivers of the variance were timing of taxes and higher rate base costs, partially offset by rate implementation, cooler weather lower O&M costs and higher renewable earnings. The impact from the timing of taxes was fairly significant at $67 million relative to 2024. This is related to investment tax credits on 2 solar projects went into service in the first quarter. This timing was known and built into our plan, and it will reverse during the balance of the year. Moving on to DTE Gas. Operating earnings were $206 million for the quarter, $46 million higher than the first quarter of 2024. The earnings variance was driven by more favorable winter weather and rate implementation partially offset by higher O&M and rate base costs. Let’s move to DTE Vantage on the third row. Operating earnings were $39 million for the first quarter of 2025. This is a $31 million increase from 2024, driven by higher RNG earnings, including $15 million of 45

[Operator Instructions] Your first question comes from the line of Nick Campanella with Barclays. You may begin. Your line is now open.

Hey, good morning everyone. Thanks for taking my questions. Hope everyone is well.

Good morning, Nick.

Hey, good morning. So maybe just to start, a good message on tariffs. I appreciate the color. Maybe you can kind of just give us a flavor of how you see this maybe impacting the auto sector, what your exposure is there? And then just general economic activity in the service territory just noticed like the C&I weather normalized trends were a little bit lower quarter-to-quarter. I don’t know if that’s timing, but just maybe kind of talk about how the plan is resilient to potential economic downturn if it goes that way?

Sure. Thanks Nick. So certainly, we got some encouraging news for the autos on tariffs, where – the tariffs were modified significantly for parts. That was the big deal for the automakers, especially. When I talked to several of the auto execs, the feeling I got was that relief on the import and export of parts, which move across the U.S. and Canadian border here quite frequently into Canada and from Canada, that provided significant relief. I think the assembly portion of the tariff remains in place. Some of the automakers are positioned better than others in the sense that they can have flexibility as to where they can assemble vehicles and move some of that production domestically. So much still remains to be seen. But as we mentioned in our opening thoughts, I think you can see that we – the economy here in Michigan remain very resilient, and we’re not seeing any significant reductions in production or any plant adjustments of significance at this point in time, so looking pretty bright. I’ll hand it over to Dave to talk about the sales results and what we’re seeing there as well. Dave, you want to add to that?

Sure. Hey, Nick, it’s good to talk to you. I’ll start by saying our actual sales were actually up because weather was great. And even when you look at the weather adjusted numbers. Our sales for the quarter were pretty good after you adjust for a leap year last year and energy efficiency. So leap year accounts for about 1% because there was an extra day last year. And then our energy efficiency is about 2%. So we had really good base growth across our customer classes. And then as we discussed in our presentation and Jerry mentioned on Page 6, we’re seeing some positive economic indicators with housing permits being up 10% and in Southeast Michigan here, real estate GDP being up over 2.5%, and payroll employment up about 1%. So we’re still feeling good about our load and the economic prospects for it as well.

That’s great. And then just on the data center and large load customer conversation, it sounds like those conversations haven’t slowed down at all. And you’re having additional conversations. So just can you give us some color on when we can maybe see an uptick to that 2.1 gigawatt number? It sounds like you’re having kind of multiple convos with aggregators and hyperscalers, and is there a chance that you can maybe roll more into the formal backlog by the second or the third quarter? Thanks.

Yes. Good morning, Nick. Yes, data center conversations are continuing. There has been really no slowdown. Obviously, we’ve got excess capacity, so that makes our service territory ideal and the legislation is helping to create some urgency because it requires construction to begin no later than 2028 to take advantage of the tax exemptions. With that said, we did announce the 2.1 gigawatts of frame agreements with Switch and UFM. UFM has already upped their demand from the 100 megawatts to 220 megawatts. And we’re working on finalizing that deal. And then we’re continuing to work the energy service agreements for the remaining providers. We’ve got an additional pipeline of roughly 3 gigawatts with hyperscalers and co-locators. And those entities are making significant inroads on securing the land that they need. So this is all moving in a very positive direction. We have a shared goal of getting something finalized before the end of the year, and we’ll incorporate any near-term changes to our long-term plan based on those agreements later this fall. Likewise, if we have to move towards some base load increases, we’ll incorporate that into our IRP filing next year.

Yes, that’s all really helpful. Hope you guys had a great day. Thanks a lot.

Your next question comes from the line of Durgesh Chopra with Evercore ISI. Please go ahead.

Hey, good morning. Thank you for giving the time.

Good morning.

Good morning, Dave, Joi, Jerry. Just I wanted to follow up on Nick’s question. And obviously, we’ve been in a lot of discussion with investors on your auto exposure as well. Just maybe some more meter on the board. Can you clarify what your margin exposure is? I know the sales number is pretty big as it relates to autos. So what’s your margin exposure, let’s say, for 2025? And with all this hyperscaler activity in the region, where do you see that going, let’s say, through ‘27, ‘28? Just high level color, please. Thank you.

Yes. Thanks, Durgesh. Yes, our margin from autos is around 3% to 4% of our total margins. So even if we had like a 10% change, up or down, it doesn’t have that much of an impact overall on our plan. So – and we’re feeling pretty good right now that the auto exposure good right now that the auto exposure based especially on some of the information yesterday, I think we’re in a good place with that going forward, too. What was your second question on data center, Durgesh.

Yes. Just I was trying to gauge with all this data center activity, where do you see that going forward, right? Presumably, you have all this data center load coming into Michigan and your relative weighting of the auto sector will probably shrink over time, right just any high level thoughts there?

Yes, it will because just from the 2 gigawatts we’ve talked about, if you look at that, that provides like 4% load growth over the next 5 years. So yes, it would put a little less on our auto exposure, but we still feel comfortable with our auto exposure also.

Okay. Perfect. Just one quick follow-up. I know it’s small, but the PBR kind of ruling, has that been factored into this rate case filing? I know it’s small, but just any thoughts or color you could share there?

Yes. Durgesh, hi, this is Joi. Yes, the commission did issue the order in February and they essentially adopted the straw proposal and they weren’t responsive to our concerns on symmetry. So, we are really satisfied with the outcome. The mechanism would go into effect in 2026 and it’s capped at $10 million for incentives and penalties. As for the proposed metrics, I mean we are really happy with the metrics. In fact, our performance across all of those metrics is green for the year. So, we are on target. We did file our response to the order last month and we are expecting to hear something back from the commission later this year. But all of this would impact 2026, not necessarily 2025. In terms of our rate case filing, our filing is in line with what we had articulated earlier, staying the course on the IRM and incorporating the Liberty audit findings in our plans. So, in terms of PBR, there isn’t anything specific, but the reliability improvements will only improve how we are performing relative to the PBR requirements.

Got it. Very helpful color Joi. Thank you very much.

Your next question comes from the line of Jeremy Tonet with JPMorgan. Please go ahead.

Hi. Good morning.

Good morning, Jeremy.

I know it’s not the biggest part of the business, but energy trading. Just wondering if you could spend a bit there and if results in the quarter were in line with your expectations, how we should think about shaping across the year or is there any kind of upward look versus budget?

Yes. Hi Jeremy, it’s Dave. Yes, it was a good quarter in energy trading. We earned $34 million, our guidance is $50 million to $60 million for the year. And it’s really strong performance continuing in our contract that in hedged both our physical power and gas portfolios. This is what we experienced in ‘23, continued in ‘24. And we are seeing some strong margins on some of these contracts 1-year to 3-year contracts there. Some of it is historical that it’s continued to come through. And as we go through the year, we could continue to see some favorability from these positions. It’s a little too early to say, but if it does, we will be able to use that strength to support and invest across our segments again to support future years as we go – as we look to ‘26 and beyond.

Yes, I was going to add a bit to that Jeremy. I could tell you the leadership team here worked deep, really deep into ‘26 and also starting to plan for ‘27. We are seeing strength across all our BUs right now. And we will use that strength as Dave said, really to strengthen ‘26 and ‘27. So, really good position to be in, this is what I would say traditional DTE planning forward. So, we are – I feel really good about it.

Got it. That’s helpful. Thank you for that. And maybe just touching on Vantage quickly here, just wondering any updated thoughts, I guess on the business outlook there, the business mix, any changes in the strategy in light of potential IRA changes or just anything else on the Federal side that might influence your thinking at this point?

No, our strategy at Vantage continues. As we talked about in our year end call, we are shifting to more utility like investments there, so that’s more of our utility like central plant services, contracts we have with large industrial and large commercial customers. But all the projects that we have that are – that we have talked about are either safe or already under the existing IRA. So, nothing that’s changing at the Federal level really changes our strategy at all at Vantage.

Got it. Great. That’s it for me. Thanks.

The question comes from the line of Shar Pourreza with Guggenheim Partners. Please go ahead.

Hi. Good morning team. It’s actually Constantine [ph] here for Shar.

Good morning.

Maybe just starting off on the renewable energy plan and kind of the level of the IRP and the proposed decision and how supportive is that of just the renewable demand that you anticipate over the next couple of years? And how does that decision kind of play into the IRP process and any kind of early takeaways that you could highlight?

Constantine, can you repeat the first part based on which decision.

That’s the renewable energy plan?

Yes.

The IRP. Yes. So, the IRP, I think it’s what we filed just was in line with our IRP. And we are continuing to advance our renewable program. We have a strong pipeline. We have got good land positions. It doesn’t really change what we had already laid out. So, we are going to continue down that path. And then the additional interest that we see from data centers may bring some additional renewables into our plan as well. So, the IRP filing, we will get the outcome of that over the next couple of weeks. The full outcome will have a full rendering of that over the next couple of weeks. But nothing is changing at least near-term in our plan based on what we have heard thus far.

Excellent. Great to hear. And maybe in the rate case proceeding that was just filed, can you contrast on anything that is new in the current rate case versus prior request and with regards to the IRM expansion, what lessons learned are you building into this cycle? Is the commission receptive to a more substantial IRM?

Yes. Thanks for the question. I will just recap the case. Again, this is all about the capital we need to continue to improve reliability and transition to cleaner generation for our customers. And the full ask as you have seen is $574 million, which is roughly $0.44 a day for our customers. And when the case is finalized, the total bill growth is still expected to be below the rate of inflation. So, you can look at Page 16 in the deck and you can see where we are relative to the rate of inflation. We think we have put forth a solid case. We have got some really compelling circuit level benefit cost analysis and performance data that is showing that these investments are working. Some of the key initiatives in the case include the expansion of the IRM, as you mentioned. And they align with the Liberty audit. So, we upped the ask in the IRM for pull top maintenance specifically, and that was called out in the audit. We are continuing our work for automation. We are showing that that automation is reducing the duration of outages and making the grid more safe. We have also included funding for sub-transmission in the IRM and some maintenance on other aging equipment. So, feeling really good about what we have included and how it aligns with the Liberty audit. We are also requesting an expansion of our tree trim efforts. We are increasing the scope. We have seen that by increasing the scope, we can reduce outages even further. And we have shared all of this with the commission. So, the ramp that we have proposed is significant, but we have tiered it such that they can give consideration for the results that we are achieving and they have got some flexibility in how they respond to our requests. If you look at how we have performed though, and this is I think is really compelling and I am really proud of the team. We mentioned that there has been a 70% improvement in reliability from 2023 to ‘24 and a 60% improvement in reliability year-to-date based on performance last year for the same time. So, I think the commission acknowledges and they did acknowledge publicly during the hearing in February that these investments are working and the reliability is showing up in positive ways for our customers. So, we are looking forward to their response in August to see how staff feels about the case. But I think we have offered a lot compelling testimony that supports the ask.

That’s great color. Thanks. And maybe just a quick follow-up to the next question on the data center conversation. Is there a targeted timeframe that incremental deals are currently seeking in terms of in-service dates or ramp up timeframes?

Yes. I think what’s driving a lot of the urgency is the way that the legislation is put together. It requires that they start construction by 2028. So, that means they have – there is some urgency on their part to get something done. And the activity just continues. I mean the team is out talking to new data center providers each and every day. In fact, they are having strong conversations with our current pipeline participants and then looking to source additional demand from other providers in and around the area. So, I think we are making really good progress. I think we will have something done by the end of the year. We are continuing to work and like we said, U of M deal has already increased from where it started. So, this is all positive movement.

Excellent. Appreciate that. Thanks for taking our questions.

Your next question comes from the line of David Arcaro with Morgan Stanley. Please go ahead.

Hey. Thank you. Good morning.

Good morning David.

Hey. I was wondering if you could touch on tax credit transfers. I was curious how much you embed in your plan currently and how might you manage the financing outlook if transferability were to change or go away under some of the Inflation Reduction Act discussions?

Yes. First, thanks David, for the question. First, let’s say we feel comfortable with the IRA and the provisions of the IRA. And as we have discussed, there is a bunch of Republican congressmen and senators that are supporting it. And in that, they are also supporting transferability. So, we feel good about the IRA provisions that support our plan and transferability. It was specifically made part of the IRA and linked to the credit program to drive support. So, we are going to continue to work with lawmakers to ensure that that stays aligned going forward. And as you know, we do have transferability as part of our plan. In fact, we used $230 million of transferability benefit in 2024. That’s really a testament to success we are having in developing affordable renewal projects for our customers as part of the Michigan clean energy plan. So, first, I will say we think the likelihood of anything around transferability or any risk is low. But if it were at risk, we think we are in a good position to manage the impacts and continue on our growth rate. First of all, like as Joi mentioned earlier, we have safe harbored our renewable investments through 2027. And we think there would be strong support in any scenario for the transferability related to these investments to continue to be supported because historically, Congress has consistently kept incentives in place that taxpayers relied upon when making investments. So, that alone would support our IRA invested – IRA related cash flows through ‘27. And then we have additional tools too. So, just prior to the IRA being enacted, we gained support for a tax equity structure with our commission. So, we could continue to support our projects and deliver the benefit for our customers as we build to meet Michigan’s clean energy plan. And then we have a strong balance sheet. And so that provides flexibility to maintain our position while we build out our plan. So, we look at other equity and financing needs, hybrids like Junior Sub that would help us. So, we think through the safe harboring tax equity, strong balance sheet, and the options we have, we will be able to mitigate the impact in the unlikely event there would be any impact to transferability going forward.

So, David, just to add a summary of that, at the highest level, our investments are really dictated by the IRP settlement we made in 2023, and also the Michigan Clean Energy Legislation that passed in 2023. So, that kind of sets our investment agenda into renewables, battery systems, and also natural gas development for that matter. And really the IRA provides affordability for our customers. And I think as you heard Dave describe, we are safe harbor through 2027. And then if there is a remote possibility that something could change, we would have many other tools that will help us manage that affordability for our customers. But we are committed to this investment and our legislation and IRP settlement sort of dictates these investments for us.

Yes. Okay. Got it. Absolutely. That’s helpful color. I think I will leave it there. Appreciate it.

Your next question comes from the line of Sophie Karp with KeyBanc. Your line is now open. Please go ahead.

Hi. Good morning and thank you for the question. So, I just wanted to really follow-up on the solar development pipeline. I understand you guys saying you are safe harbored through 2027. Does that actually mean that you have panels on the ground already, or to say, or just some part of that? And what is the outlook beyond that? And I am asking because some solar companies, they are coming up with pretty dire commentary and calling some of the solar projects at the reciprocal level of tax and economic, right? So, I guess what’s your outlook there? How do you see your development pipeline if the reciprocal tariffs would come back in?

Hey Sophie, this is Joi. Yes, we are feeling good about our solar positioning. We did in fact safe harbor and we do have those panels in warehouses right now. So, we have got adequate inventory on hand to complete projects through 2027. And we are continuing to source additional panels from providers that have minimal tariff risk. Even some of the providers that we have now are, they are on-shoring their production. I think one of the panels for providers is breaking ground as we speak, cutting the ribbon on their production facilities right here in the U.S. So, that’s been our mode of operation. Where we do see some tariff risk, we have tried to insulate ourselves and have the provider take on that tariff risk. So far, they are delivering, they are furnishing on the panel. So, we are not seeing any near-term risk to our plans and we feel good about the inventory that we have on hand.

Great. Thank you. And then my other question was on your rate case, right, so electric rate case? So, is there – do you expect to, I guess fully litigate the case? So, is there a new pathway to settle in this time around? Has anything changed in this regulatory landscape since the last time?

Yes. So, it’s too early to say. We always will entertain settlement discussions. We will know in August when we see our staff and intervener testimony. But worst case scenario, we will get an order in the February timeframe.

Sounds good. Thank you. Thank you. I appreciate it.

Your next question comes from the line of Michael Sullivan with Wolfe Research. Please go ahead.

Hey. Good morning.

Good morning Michael.

Hey Jerry. Sticking with tariff and the tariff risk mainly, can you just remind us, do you have any battery storage in your plan and what we should be expecting in terms of potential cost pressures there?

So, we do have battery storage in our plan. We have not purchased the battery, so we actually have flexibility in terms of how we manage that. But as I mentioned in my opening thoughts, just go back to the tariff impact, 80% to 85% of our spend is on services. So, when we look at the balance of spend, and you know that we have focused for many years on domestic supply and local supply. As I mentioned in my thoughts, our early opening thoughts, over $3 billion of our spend is in Michigan. So, this puts us in a really good position. And I have asked the team to do a deep dive on all tariff exposures in our gas, electric, and Vantage business. And when we look at all of that, the summary is, in the worst case, it’s a 1% to 2% impact over the near-term and long-term. And that’s very manageable for us. And as a matter of fact, with the conversations we are having, we are going to come well below that is our expectation. Also, just to add a little bit of color on that, the number of conversations that our supply chain team is having about on-shoring for domestic production, the IRA kind of gave an incentive for domestic production. And I think the tariffs are a bit of an accelerant on those conversations. So, for example, inverter supply, transformers, solar panels, battery manufacturing, all many, many conversations about the ability to sort of on-shore that equipment manufacturing. So, like Joi mentioned, there is plants that are opening up, there is plants that are already open. So, it’s quite an interesting opportunity for a more holistic perspective for our service territory and for the country.

That’s great. And flipping over to maybe the fossil side, I know the IRP is not till next year, but what are you seeing in terms of gas new build costs and timing? And are you considering at all potentially pushing out coal retirements like Monroe, just given some of the lead time pushback or push out that we have seen?

Well, I think with the executive orders that have rolled out, the one that’s most encouraging for us at the highest level is there is this section 111D provision in EPA rules that was going to be very expensive to build new gas plants. So, we are really excited with the prospect of that being sort of rescinded. I know the industry has made a big push for that last year, and I think with this new administration, we have an opportunity to see that actually happen. So, we are excited to see that move forward in a positive direction, which will make the economics of building new gas plants, which is something we have to do, Michael. Our coal plants are old, and we may get some flexibility with our coal plants, but in the end, we have got to shut them down because they are quite old and need to be replaced with new technology, high quality technology in the form of renewables, batteries, and combined cycle plants. So, we are looking forward to a little more flexibility with gas plants, primarily.

Okay. Great. And just one quick one, if I could squeeze in for Dave, the 45

Hi Michael. No, they are all online, and in fact, we are kind of, we are earning on those right now. So, of the $50 million to $60 million, if you look at our quarter, we will have $15 million of the credits that we have earned this quarter already.

Perfect. Thank you very much. Appreciate it.

Thank you.

Your next question comes from the line of Andrew Weisel with Scotiabank. Please go ahead.

Hey. Good morning everybody.

Good morning Andrew.

I have got one housekeeping and one follow-up, please. Firstly, what was the FSO to debt on a trailing 12 months, please?

We are right at 15%, Andrew.

Okay. Great. Then the follow-up for, Joi, please. You talked about the IRM and plan to increase it from $290 million to $1 billion by 2029. How are you thinking about the path to get there? Are you hoping to get it kind of all in one shot, or will it be gradually ramping over time? I know it’s been a multi-year conversation, but I – and you mentioned the support is there from the Liberty audit. But how are you thinking about the path to get there? And the way you see the world today, would a $1 billion approval be enough to stay out for longer than you have been typically going in kind of annually, or how do you think about the timing of the next rate case if you were to get it at that $1 billion level? Thank you.

Hey Andrew. Yes, we proposed a ramp, right. So, we are stepping into this over a 3-year timeframe, and that’s how we proposed it in previous cases. The difference being we have got some really solid data for the investment categories that show how these investments are delivering better reliability for our customers. And it’s at the circuit level. So, we believe that’s solid support for expansion of the IRM. And then likewise, the areas of investment align perfectly with what the Liberty audit offered in its findings. And so we believe the commission will take this into account, but we have offered two tiers, one that ramps immediately to a $1 billion and then a step below, so it gives them some flexibility in their decision making. If we get to a $1 billion ramp, that would keep us out of cases. I would say it puts some distance, maybe 6, 8, not quite 12, I don’t think, but it would certainly put some distance between our next filing. But we won’t know for certain until we hear back from them and the early indicator will be in the August timeframe.

Alright. Thank you so much.

Your next question comes from the line of Travis Miller with The Morningstar. Please go ahead.

Thank you. Good morning everyone.

Hey Travis.

Good morning Travis.

You answered most of my questions, but a couple of quick follow-ups. One on the RNG tax credits. Any discussion at the Federal level about those pro-work going away or are those pretty much locked in?

We are feeling good about the position on the RNG credits right now. There is some rulemaking still has to go on, but we are confident that the final position is going to be what Congress intended. So, I think it’s still going forward. And as we just said, we booked $15 million of that for the quarter.

Okay. And then on the IRM, if you get the expansion, is that capital that would be incremental or is that capital that you are already planning, already in plan and would simply flow through the IRM instead of a traditional base rate case?

Yes, that’s not incremental capital. That’s what’s in our plan at this point.

Okay. Very good. And then one more quick one, if I may, data centers, is there a role that Vantage could play, or are people at Vantage involved in some of those conversations about a role they could play?

There are some early conversations that Vantage is having about building, really generating assets or backup generation for data centers. So, there could be an opportunity, but I would say it’s really early.

Okay. Very good. That’s all I have. Thanks.

Thank you.

Our next question comes from the line of Paul Fremont with Ladenburg. Please go ahead.

Thanks. Congratulations on the quarter and my questions have all been answered. Thank you.

Thanks Paul.

Your last question comes from the line of Paul

Hi. Good morning. It’s Ivan [indiscernible] for Paul.

Good morning.

Hi. I think most of my questions have been answered, but I do have a question related to the tariff structure. I know you have a big amount of extra capacity. So, how should we about a tariff structure for data centers for that gigawatt that’s out there and then beyond that, in particular given that CMS has a filing outstanding to set up a data center tariff?

Hi. Good morning. Yes. As we mentioned, we don’t need a tariff right away for the near-term load ramps because we have excess capacity and we would use batteries, renewables, and my green power along with other riders to support that load. Over time though, if we get to a point where we have got to build base load generation, a tariff would – structure would be most appropriate. And we are looking to insulate our existing customers from stranded assets. So, think of a long-term agreement with minimum volume commitments. But again, we don’t see a need right away. We are just starting to formulate our thoughts based on what consumers filed and then discussions that we are having with our data center providers.

Thank you. And I have a quick follow-up on the transferability. I just want to make sure that I understand that you are able to use tax equity structure at the utility level if transferability is no longer available.

Yes, we did get support from the commission for tax equity structure. It was just prior to the IRA being enacted. We had been working on that. So, yes, we think we would be able to work through that with them again.

Okay, so you would have to go through like a regulatory process?

No. I think we have got support already for it. We just have to work the process.

Okay. Thank you.

We received an order that allowed us to deploy tax equity structures in a certain manner. And like Dave said, once we have the inputs of what we are pursuing, that’s when we would obviously put that into that process.

Okay. Great. Thank you very much.

That concludes our Q&A session. I will now turn the call back over to Jerry Norcia for closing remarks.

Well, thank you everyone for joining us today. I will just close by saying that we are feeling really great about 2025, as well as our long-term position and growth for future years. I am sure I will see many of you at the AGA conference in a few weeks. Have a great morning. Stay healthy and safe.