Ladies and gentlemen, thank you for standing by, and welcome to the Q4 2020 NiSource Earnings Conference Call. All lines have been placed on mute to prevent any background noise. And after the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions].

I would now like to turn the call over to your speaker today, Randy Hulen, Vice President of Investor Relations and Treasurer. Thank you. Please go ahead, sir..

Thank you, and welcome, everyone, to the NiSource fourth quarter 2020 investor call. Joining me today are Joe Hamrock, our Chief Executive Officer; Donald Brown, our Chief Financial Officer; and Shawn Anderson, our Chief Strategy and Risk Officer.

The purpose of this presentation is to review NiSource's financial performance for the fourth quarter and full year of 2020 as well as provide an update on our operations, growth drivers and financing plans. Following our prepared remarks, we'll open the call to your questions. Slides for today's call are available on nisource.com.

Before turning the call over to Joe, Donald and Shawn, just a quick reminder, some of the statements made during this presentation will be forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements.

Information concerning such risks and uncertainties is included in the MD&A and Risk Factors sections of our periodic SEC filings. Additionally, some of the statements made on this call relate to non-GAAP measures.

For additional information on the most directly comparable GAAP measure and a reconciliation of these measures, please refer to the supplemental slides and segment information, including our full financial schedules available at nisource.com. With all that out of the way, I'd like to turn the call over to Joe..

Thanks, Randy. Good morning, everyone, and thank you for joining us. Hopefully, you've all had a chance to read our fourth quarter and full year earnings release, which we issued earlier today. 2020 was a year like no other.

Despite the challenges of historic global pandemic, the NiSource team remained focused on our core mission of providing safe, reliable energy to our customers and the communities we serve, while at the same time, enhancing our position to execute on significant long-term growth opportunities.

Our 2020 financial and operational results reflect the resiliency of our business, and continued execution of our safety and asset modernization programs, as well as our transition away from coal generation. In Indiana, we completed two wind power projects in December.

And we continue to expect that our infrastructure and generation investments will drive by compound annual growth of 7% to 9% in net operating earnings per share from 2021 through 2024, while reducing greenhouse gas emission 90% by 2030. Let's turn now to Slide 3 and take a closer look at our key takeaways.

In 2020, we delivered non-GAAP net operating earnings of $1.32 per share as our cost management and regulatory mitigation efforts reduced the financial impact of the COVID-19 pandemic. In addition to some I've mentioned already, we achieved a number of other key milestones in 2020.

We invested $1.7 billion in our gas and electric utilities, primarily on safety and asset modernization, which remains a top priority. We advanced and matured our Safety Management System and safety enhancement initiatives and 70% of our low-pressure systems are now protected with automatic shutoff devices and remote monitoring.

We launched our transformative NiSource Next initiative to support our safety initiatives, build organizational capabilities and enhance our efficiency. We sold the Columbia Gas of Massachusetts business, completing the transaction in 8 months.

We lowered the weighted average interest rate on our long-term debt by 60 basis points and enhanced our liquidity through the COVID-19 pandemic, and we continue to see strong demand for natural gas, experiencing a net gain of more than 30,000 gas customers across our 6 state footprint.

We are today reaffirming our 2021 non-GAAP net operating earnings guidance of $1.28 to $1.36 per share.

Consistent with the long-term growth plan we provided at Investor Day, we expect to make $1.9 billion to $2.2 billion in annual growth, safety and asset modernization investments from 2021 through 2024, and $1.8 billion to $2 billion in renewable generation investments through 2023.

I will note that we do expect an order in our Pennsylvania base rate case in the first quarter, with rates that would be retroactive to January 23. Now I'd like to turn the call over to Donald, who will discuss our 2020 financial performance in more detail..

Thanks, Joe, and good morning, everyone. Looking at our 2020 results on Slide 4, we had non-GAAP net operating earnings of about $508 million or $1.32 per share compared to non-GAAP net operating earnings of about $495 million or $1.32 per share in 2019.

I would note the loss of fourth quarter earnings related to the sale of CMA reduced 2020 non-GAAP earnings per share by approximately $0.05. Looking more closely at our segment 12-month non-GAAP results on Slide 5, operating earnings were up about $36 million for the year in our gas segment.

Operating revenues, net of the cost of energy and tracked expenses were down about $19 million due to the sale of CMA, partially offset by infrastructure program revenues and increased customer growth.

Operating expenses, also net of the cost of energy and tracked expenses were down about $55 million, mostly due to the CMA sale and lower employee and administrative expenses, partially offset by increased COVID-related costs.

In our electric segment, 12-month non-GAAP operating earnings were down by nearly $40 million, driven primarily by an approximately $16 million increase in operating revenues, net of the cost of energy and tracked expenses due to new rates from the recent rate case, partially offset by COVID-related impacts from customer usage, late payment fees and reconnection fees.

Operating expenses, net of the cost of energy and tracked expenses were up by approximately $55 million due to the increased depreciation expenses. Turning to Slide 6, we provide additional details about the financial impact of COVID-19.

As you can see, we're seeing lower commercial and industrial sales, which are partially offset by increased residential sales. We're also seeing reduced late payment and reconnection fees as well as higher bad debt and other expenses. The total growth impact of COVID-19 in 2020 was approximately $0.10 per share.

This impact was partially offset by non-safety-related cost management and regulatory solutions, bringing the net 2020 impact of COVID-19 to approximately $0.05 per share. Consistent with our base case, we currently expect an additional COVID impact in 2021 of approximately $0.05 per share which is factored into our 2021 non-GAAP EPS guidance range.

While we're monitoring the pandemic closely, to date, it has not presented significant barriers to our safety and infrastructure modernization programs or our long-term growth. As Joe mentioned, we are reaffirming both our 2021 earnings guidance and the guidance for long-term CapEx and EPS CAGR that we outlined it in deck today.

Now turning to Slide 7, I like to briefly touch on our debt and credit profile. Our debt level as of December 31 was about $9.7 billion of which about $9.1 billion was long-term debt.

Following the successful liability management transaction in the third quarter, the weighted average maturity on our long-term debt was approximately 15 years, and our weighted average interest rate was approximately 3.7%.

At the end of the fourth quarter, we maintained net available liquidity of about $1.7 billion, consisting of cash and available capacity under our credit facility, and other accounts receivable securitization programs.

Our credit rating from all three major rating agencies are investment grade and we remain committed to maintaining our current investment grade ratings. Taken together, this represents a solid financial foundation to support our long-term safety and infrastructure investments.

Let's take a quick look at Slide 9, which highlights our current financing plan. I would just note that we continue to look at ways to optimize the financing of our growth strategy.

We are currently evaluating scenarios, utilizing hybrids and/or convertibles that get 50% or more equity credit with the rating agencies and could minimize the need for block equity offering in 2022 or 2023. We would anticipate a hybrid or convertible offering sometime in the first half of 2021.

I would also note that next week, we plan to file a new at the market or ATM equity program to satisfy our ATM needs for the next 3 years. Just to remind everyone, our guidance is inclusive of this financing plan.

Now, I'd like to turn the call back over to Joe, who will provide some infrastructure investment and regulatory updates for our gas and electric businesses..

Thank you, Donald. Now, let's take a look at some NiSource utilities highlights for the fourth quarter and early first quarter of 2021, starting with our gas operations on Slide 10. In Pennsylvania, our base rate case remains pending before the Public Utility Commission.

The application originally filed in April 2020 was modified in December and now seeks an annual revenue increase of $76.8 million to invest in, modernize and upgrade our existing natural gas distribution system as well as maintain the continued safety of the system.

An order is expected in the first quarter of 2021 with new rates expected to become effective retroactive to January 23, 2021. In Maryland, the Public Service Commission approved the settlement in our base rate request in November 2020.

The approved settlement supports further upgrading and replacement of our pipelines and is expected to increase annual revenue by $3.3 million, including $1.3 million of current tracker revenue. New rates became effective in December 2020.

In Indiana, our latest tracker update was approved in December in our long-term gas infrastructure modernization program. The update covers $26 million in incremental capital invested under the program between January and June of 2020, and new rates became effective in January of 2021.

The Indiana Utility Regulatory Commission in 2020 approved a 6-year extension of the program, including nearly $950 million in planned capital investments through 2025 to be recovered through semiannual adjustments to the existing gas Transmission, Distribution and Storage Improvement Charge or TDSIC tracker.

Now let's look at our electric operations on Slide 11. In January, the Indiana Utility Regulatory Commission approved the latest tracker update request in our long-term electric infrastructure modernization plan.

The approved electric TDSIC tracker update covers more than $122 million in incremental capital investments made between July 2019 and June 2020, and new rates became effective this month. This well-established program includes enhancements to our electric transmission and distribution system designed to further enhance safety and reliability.

The program originally approved by the IURC in 2016 includes approximately $1.2 billion in electric infrastructure investments expected to be made through 2022. And now, I'll ask Shawn Anderson to provide an update about our renewable generation projects..

Thank you, Joe. As Joe shared earlier, we completed our first 2 wind projects, Rosewater and Jordan Creek on time in December, which is an exciting milestone in executing our generation transition. Rosewater is our joint venture with EDP Renewables North America and our tax equity partner, Wells Fargo.

Jordan Creek represents a Power Purchase Agreement or PPA with NextEra Energy Resources. These completed projects are now powering more than 125,000 homes across Indiana with cleaner, more cost-effective energy. Our third wind project Indiana Crossroads remains under construction.

This joint venture with EDP is expected to be in service at the end of this year.

These renewable projects are consistent with their 2018 integrated resource plan, within which the preferred pathway plans to retire nearly 80% of our remaining coal-fired generation by 2023 and retire all coal generation by 2028 to be replaced by lower cost, reliable and cleaner options.

The plan is expected to drive a 90% reduction in our greenhouse gas emissions by 2030 and is expected to save our electric customers an estimated $4 billion over 30 years. As Joe noted earlier, we continue to expect to make $1.8 billion to $2 billion of renewable generation investments through 2023.

To date, we have executed agreements representing approximately $1.25 billion of this anticipated investment. Commercial negotiations for additional solar and storage capacity continue to advance. Half of the capacity and the replacement plan is targeted to be owned by joint ventures that will include NIPSCO and tax equity partners as the members.

The balance of new capacity is expected to be primarily in the form of PPAs. In November 2020, we filed applications with the IURC for the approval of the Dunns Bridge I and II and Cavalry solar energy centers.

These 3 Indiana projects or build transfer agreements with NextEra Energy Resources and represent a combined capital investment of approximately $850 million for NIPSCO. These projects are expected to be placed into service across 2022 and 2023.

NextEra will construct the solar and storage facilities, and we plan to form joint ventures with tax equity investors to own, operate and maintain these assets. An IURC order is expected in the second quarter of 2021. We continue to fill out the balance of our capacity. In January, the IURC approved our Brickyard and Greensboro solar and storage PPAs.

NextEra Energy Resources will develop these projects, which are expected to be completed in mid-2023. And in December 2020, NIPSCO announced a long-term PPA with the clean energy infrastructure business of Capital Dynamics to develop Gibson Solar, a 280-megawatt solar project in Gibson County, Indiana.

NIPSCO filed an application with the IURC for approval of this project in January 2021. Construction is expected to begin in 2022 with commercial operations to begin in 2023. Also in December of 2020, NIPSCO filed an application with the IURC for approval of the Green River Solar PPA.

Advanced negotiations continue for additional build transfer agreements to fill out the remainder of our capacity needs. We expect those negotiations to be completed in the first half of 2021 and the necessary regulatory filings coming shortly thereafter.

In the fourth quarter of 2021, NIPSCO will be submitting an integrated resource plan for the IURC that will continue to outline its long-term generation plans, including the planned retirement of Michigan City Generating Station. The preferred plan that emerges from the 2021 IRP could create additional capital investment opportunities.

Before we move on from our electric story, I would like to provide a quick update on units 14 and 15 at our Schahfer Generating Station. As you know, all 4 coal units at Schahfer are planned to retire by May 2023, as outlined in the 2018 IRP.

As we continue to evaluate the economics for that generating fleet and the ongoing costs and investments required to keep the coal units operational, we determined that the right path forward for us is to initiate the retirement of 2 of the 4 coal units at Schahfer.

Units 14 and 15 will retire by the end of 2021, which is the most economic decision for our customers. NIPSCO's remaining fleet and new renewable capacity and secured capacity purchases will continue to reliably serve the energy needs to our customers. To be clear, our earnings guidance is not impacted by this decision.

We are excited about the significant progress in executing the plan we identified in our 2018 IRP and further detailed at our Investor Day, and we look forward to more projects and updates to come in future quarters. Now, I will turn the call back over to Joe..

Thank you, Shawn. Let's turn back to our foundational commitment, safety. As I noted earlier, our safety enhancement initiatives advanced and matured in 2020.

Our implementation of API's Safety Management System or SMS, transitioned from an accelerated project launch to an established operating model within NiSource, and we expanded the implementation to our electric business.

With the ongoing support and advice from the independent quality review board, we are continuing to mature our SMS processes, capabilities and talent and we're collaborating with our industry peers to enhance safety and reduce operational risk. We had a number of safety milestones in 2020 that are worth calling out.

We launched mobile gas leak detection pilot project and implemented a service line mapping strategy to enhance records quality across our footprint. We added special clearance processes and other layers of protection to critical field operations activities.

Our gas meter shops and our fabrication facility earned ISO 9001 certification, a strong first step in a continuing quality effort. And the final safety recommendation around emergency preparedness and response was closed by the National Transportation Safety Board as we continue to mature our emergency response processes.

As noted, SMS has become our core operating model, built on our culture of empowering everyone to report and identify risk, including the authority to stop work whenever necessary, enhancing process safety with layers of protection and building accountability for effective asset management to reduce risk.

You'll see additional enhancements to our safety plan in 2021. I am also pleased to note some recognition that NiSource received in mid-November when we were named to the Dow Jones Sustainability North America Index for the seventh consecutive year. NiSource is 1 of 7 U.S. utilities on the 2020 list.

The ranking is based on environmental, social and governance criteria and reflects our progress on our sustainability strategy which includes aggressive greenhouse gas reductions, safety enhancements and executing against $40 billion of long-term safety, asset modernization and renewable energy investment opportunities.

We're honored to once again be included on this international benchmark for sustainable business practices, which recognizes the comprehensive focus on ESG principles at the core of how we run our business. Before turning to the Q&A portion of today’s call, I will share and reiterate a few key takeaways.

Our 2020 financial and operational results reflect the resiliency of our business and our team as we executed on our safety and asset modernization programs.

Our electric generation transition strategy reliably served customers through the historic COVID pandemic and took steps to reposition the company to execute on significant long-term growth opportunities. We continue to expect to deliver non-GAAP net operating earnings per share in the range of $1.28 to $1.36 in 2021.

Our long-term growth commitments remain in place. These include $1.9 billion to $2.2 billion in annual growth, safety and modernization investments from 2021 through 2024, plus $1.8 billion to $2 billion in renewable generation investments across 2022 and 2023.

And compound annual earnings per share growth of 7% to 9% from 2021 through 2024, with near-term growth of 5% to 7% from 2021 to 2023. Our electric generation strategy continues to advance with our first 2 wind projects complete and numerous other renewable projects in development.

Thank you all for participating today and for your ongoing interest in and support of NiSource. We're now ready to take your questions..

[Operator Instructions] Our first question comes from the line of Andres Sheppard from Credit Suisse..

It's Mike Weinstein. So the -- you guys are going to be filing a new IRP this year. Is that right? I know…..

That's correct. We'll go through that process starting here in the next quarter or so..

Great. And what kind of pace should we expect in terms of future RFPs coming up in additional opportunities from more renewables? I think you mentioned the Michigan City retirement should provide additional opportunities.

What kind of schedule of releases can we expect over the next year or two?.

Yes. I mean, in essence, we'll follow a process and a pattern that looks a lot like what we went through in 2018. We'll kick off the process with stakeholder engagement relatively soon. And then in the middle of the summer after we develop scenarios is when you'd likely see -- to the extent it helps provide insight at any RFPs that might be included.

Keep in mind that the retirement schedule for the Michigan City plant drives the capacity need for the future, because we’ve pretty much got the 2023 capacity replacement plan set. And so RFPs may or may not be as valuable looking out that far from a 2021 vantage point. So we'll take all of that under consideration.

The 1 thing I'd say though, Mike, and I think this is obvious to all of us with the current events that are going on across the industry right now, it just starkly demonstrates that reliability and capacity are essential, and the integrated resource planning process itself is critically important.

So that's why our approach really starts with reliability and balances all the other attributes against that fundamental requirement. So this experience that we're seeing now will be -- should provide critical learning for us as we go through the next round of the IRP.

And so I don't want to predict with a high degree of precision even the process at this point because there's a lot to learn from what's happening in the markets..

That makes sense. Hey, could you -- I know you don't want to -- I don't want to front run what might happen with -- in Pennsylvania.

But could you talk about what the future pace of rate filings is likely to be based on the needs, based on the investments that's going on in that state? And what do you think will happen next after this rate case decision comes out?.

You're specifically asking about Pennsylvania. .

Pennsylvania. .

Yes, I'm not going to speculate about an outlook. We should see a commission decision soon enough, and we'll certainly keep you and all of our stakeholders updated as that plays out.

And I won't front run any future filings, but if you look at the pace of investment in Pennsylvania, and the historic cycle there, we've had over about a decade, 8 rate cases settled with the stakeholders in Pennsylvania and well supported by the commission.

So I think that track record and that pattern is a good indicator because our investment pace is much -- is as strong as ever in Pennsylvania, is a good indicator of what the future will likely look like. Especially with the fully forecasted rate year convention, it almost sets up a pattern that calls for an annual filing.

And that we've only missed that maybe one time in the last decade or may be 1 year out of the last 10 where we didn't file an annual case. So good indicators, but not precisely front-running any plans at this point. And I think it will be important to see the outcome in this case before we make any of those decisions..

One last question. On convertibles and hybrids financing going forward, you mentioned that you'd be looking at that opportunistically.

At what point do you think you'd be ready to make a decision regarding common equity versus convertibles hybrids?.

Michael, so as I said earlier, we plan to actually issue a hybrid or convertible in the first half of this year.

And so ultimately, as talked about, looking at a structure that provides at least 50% equity content from the rating agencies, and ultimately, depending on the size and equity content of that security, it would then indicate how much equity we need, block equity we would need in 2022 or 2023.

But we plan to execute that in the next few months and certainly the first half of the year..

I see. And then you’d be ready to make a decision about the following year..

That's right. Yes, then we'd be able to update..

Our next question comes from the line of Harry Pollans with Bank of America..

It's Julian actually. So I suppose just to clean up on that last question on equity, if I can in brief. The total amounts are not shifting around. This would just be the form.

And then more importantly, can you talk and discuss timing to the extent to which you would actually pull forward that block? Is that you would delay the convert in any way or just clarify that a little bit under that scenario, what that looks like? Is that still a ‘21 let’s get everything done kind of issuance?.

Yes. So plan is, this year, we would do the issuance of the hybrid or the convertible. And then based upon that -- so ultimately, we're looking for -- if you assume $2 billion of renewable investments, 60% equity content, so that's $1.2 billion of equity content. We'll execute the hybrid or convertible this year.

And then depending on equity content coming out of that, we’d balance that out with a block later. In that, we do that block in '22 or '23. So we've got some timing and flexibility on that block..

Sorry to clarify that.

When you say depending on the equity content, you're not firm on what kind of equity treatment you'll get based on what you're looking at today?.

Yes. We know we can get at least 50% equity content and the structures we're looking at. We're also trying to achieve more than that. If we can get more than that and then depending on the size or the quantity of that security, that will ultimately then determine what's the balance of equity we’d need..

And then not significant too much. What's the reasoning for the tweak in the '21 CapEx as well? Just also want to make sure I understand the financing update here..

No. It's not really a tweak in our CapEx. At Investor Day, we gave a wide range to incorporate the 4 years of investment. And so it's consistent with our plan to kind of tighten up for the prompt year, and the CapEx that we have guided for this year is aligned with our long-term guidance. So no changes..

Got it. Excellent. Sorry, 1 last 1 that's not a clarification if I can. There are a lot of legislative bills out there this session. There's just a lot going on in Indiana.

Anything that we should be paying attention to that could impact, broadly speaking, your renewable efforts and/or your LDC? I'm just trying to make sure we're not missing anything here across a lot of different developments that I'm sure you guys are tracking closer than we are..

Yes, Julien. And we're, as you would expect, engaged and closely following all of that. And I would describe the full set of initiatives as essentially trying to create or level the playing field for renewable investment and to make sure that there's a clear playing field. All of that to us is neutral to positive for our plan.

We don't see anything that's of concern. Certainly, we'll keep an eye up for that. And then I would note, part of the puzzle that's playing out is for the natural gas side of the business for the State to prohibit local ordinances that might restrict the use of natural gas.

And I think that's a key indicator of policy support for the whole business in Indiana..

Our next question comes from the line of Richard Sunderland with JPMorgan Securities..

Just maybe at a high level thinking about the first heating season under COVID conditions.

Curious how you've been managing through that, particularly on the gas side and any takeaways you can provide at this point on realized impact versus that base scenario of $0.05 baked into '21?.

Yes. Thanks, Richard. And I'll kick that off. And I'll note that front and center for us has been and will always be the health, safety and wellness of our employees and safety for our customers, and that's a key driver of the whole outlook for COVID.

Regarding the economic recovery -- and you can see from our results, reason to be what I'd call, cautiously optimistic though there's other impacts to consider, including ongoing expenses, that could relate to adjustments to work protocols, other revenue collections, regulatory treatment and potential after-shocks in the economy.

And all of those are hard to predict, but certainly something we should all be attentive to.

All considered to the spirit of your question and recognizing that we're deep in the first quarter right now and clearly deep in the heating season with the weather we're experiencing across the country, our guidance reaffirmation today reflects our base case for 2021 and also our long-term growth rate.

From a margin standpoint, the residential usage has remained strong. It really came out of the block strong at the beginning of the COVID pandemic. And we've seen that trend continue into 2021.

Commercial usage has been consistently down and continues to be a profile that we're going to closely monitor and perhaps is the most strong indicator of recovery across our territories. Industrial usage, admittedly not all perfectly correlated with COVID factors. There's a number of things that can drive industrial usage.

So it's hard to say deterministically that it's all COVID. But that was the most impacted in 2020, though the deep impacts were concentrated in the second quarter, right at the beginning of the pandemic, and we've seen steady recovery ever since then, and that continues today.

But any change in that trend, and that's the aftershock question, could obviously be impactful to our results. So again, all of that kind of adds up to reason to be cautiously optimistic about recovery and the path ahead.

And as we noted earlier on the call, we would expect to have more clarity by the time our first quarter call comes around, we'll certainly have the heating season behind us, always a big quarter for us. And that should put us in a position to tighten up our outlook on COVID..

[Operator Instructions] Our next question comes from the line of Shar Pourreza with Guggenheim partners. .

It's actually [Cody Cork] on for Shar. So maybe starting, you have projects announced for $1.25 billion in CapEx, but you continue to point to a range of remaining investment for solar of $200 million.

I'm just wondering why you wouldn't narrow it, why keep that range if you're kind of zeroing in on the remaining projects? And then just wondering when we might get an update on some of those projects?.

Thanks for the question. Appreciate that. At this point, we continue to track towards that $1.8 billion to $2 billion range. That range was really born out of the RFP process. And as we start to commercialize, we're step closer to the ending projects that we think will fill out the balance of need. We'll be able to tighten that.

But at this point, there's no indication that it's any different than $1.8 billion to $2 billion. But we do expect to have additional announcements yet here in first quarter. That relates to that $1.8 billion to $2 billion..

And then if I could, just wondering if you've given any more thought to portfolio optimization and how you could use it to offset some of your equity needs related to renewables.

Do you think LDC still have some room to rerate on valuation before you can get comfortable with looking at a sale?.

That's something we certainly continue to watch both our stock price as well as transactions that have been announced as well as are in the market now. Trying to understand how that might provide value above our plan.

Again, the financing we've outlined is inclusive -- or that the earnings we've outlined is inclusive of the financing that we've talked about. But we'll continue to look and see if there are strategic options that make sense long-term and would enhance our growth over the '21 to 2024 time period..

Our next question comes from the line of Charles Fishman with Morningstar..

I know this is asked, but I'm still confused. On '21 CapEx, the range is about $100 million to $200 million lower than the Analyst Day as well as 3Q.

And what is the reason for that if you could maybe talk about that again?.

Yes. We really just give a wide range to incorporate all of the years, all the individual years in the plan. And certainly, it grows over time because of -- as our capital and our monetization programs grow, but also the renewable investments.

And so this first year is really kind of that first year of growth that builds into that long-range or the range that we provided over Investor Day. And again, it's aligned with the guidance that we provided for this year and long-term. The other way to think about it is, last year, we spent about $1.7 billion.

The midpoint of our guidance this year is $2 billion. So it's a significant increase and that's what we've been doing historically is kind of building each year, building our capabilities, making sure we've got construction crews and internal capabilities to execute that program..

Okay. And then moving to Slide 15, you pulled out transmission project as a separate line item, $150 million. And I guess, it sounds like that's associated with 1 of the 4 wind projects.

Is that sort of regulated?.

No. That would be Indiana rate base investments. And it's really to support the shutdown of the Schahfer plants..

Okay. Got it. And then 1 final question. You talked about gas customer gains, I didn't write that down. I think it was 30,000 last year.

Just any jurisdiction that you're seeing faster growth than the other ones? Or is it just spread out, is it coming from propane converts, any color you can add?.

Yes, thanks, Charles. It’s actually strong across the board. We have seen just below 1% at the low end and close to 2% at the high end and Virginia is the strong, the leader in terms of the growth rate of customer additions. Some of that is actual growth in the economy there. New housing starts and new construction, that’s always a differentiator.

But across the board, you hit it, you see some propane conversion, some oil conversions at the edges. Now those numbers that we shared net out the Massachusetts contribution. So you should think about that 30,000 across the six states of NiSource now.

So pretty balanced, strong 1%-ish growth across the board, and our outlook remains strong on that, too. We see continued demand..

And then when there's a new hole being developed in your jurisdictions and gas is available, are you pants down getting the home versus the all-electric?.

Yes. Typically, that's a strong preference, and it's -- with the builders, in particular, it's typically an established relationship that drives that choice..

And there are no further questions in queue at this time. I'd like to turn the call back over to Mr. Joe Hamrock for some closing remarks..

Thanks, James. Appreciate it. And thank you all for tuning in today and engaging in the call. We look forward to ongoing engagement and future updates as we continue to execute on our growth plan, and we certainly see lots of opportunity in the quarters ahead for additional updates on the matters that we touched on today.

So thank you for joining us today and please stay safe and stay warm..

Ladies and gentlemen, this does conclude today’s conference call. You may now disconnect..