Good morning, everyone, and welcome to the CMS Energy 2022 first quarter results. The earnings news release issued earlier today and the presentation used in this webcast are available on CMS Energy website in the Investor Relations section. This call is being recorded. After the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time. If at any time during the conference you need to reach an operator, please press the star followed by zero. Just a reminder, there will be a rebroadcast of this conference call today beginning at 12:00 P.M. Eastern Time, running through May tenth. This presentation is also being webcast and is available on CMS Energy's website in the Investor Relations section. At this time, I would now like to turn the call over to Mr. Sri Maddipati, Treasurer and Vice President of Finance and Investor Relations. Thank you, Austin. Good morning, everyone, and thank you for joining us today. With me are Garrick Rochow, President and Chief Executive Officer, and Rejji Hayes, Executive Vice President and Chief Financial Officer. This presentation contains forward-looking statements which are subject to risks and uncertainties. Please refer to our SEC filings for more information regarding the risks and other factors that could cause our actual results to differ materially. This presentation also includes non-GAAP measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in the appendix and posted on our website. Now I'll turn the call over to Garrick. Thanks, Sri, and thank you everyone for joining our call today. I'm pleased to share the great progress we have made over the quarter and with our IRP. You've heard me speak about our simple investment thesis on many of these calls. It has withstood the test of time, and this quarter was no different. The industry-leading net zero commitments. These aren't just words, they're evident in our actions and our results. Our IRP settlement paves the way to be out of coal by 2025, one of the first utilities in the nation to achieve such a milestone. Our recently announced net zero goal for our gas system is not just a dream, but evident and proof point in our net zero methane target and a 20% reduction in customer emissions by 2030. Excellent through the CEW. I can't think of a more important time, given inflation and supply chain constraints, for our industry-leading cost management muscle to play out. Rejji will walk through specifics in his prepared remarks, but I continue to be confident in our ability to offset inflationary pressure and alleviate supply chain concerns. This means keeping customer bills affordable through our CEW lean operating system. Top-tier regulatory jurisdiction. The IRP settlement once again demonstrates a constructive regulatory environment in Michigan, delivering important industry-leading outcomes for all. I'd be remiss if I didn't thank the Michigan Public Service Commission staff, the Michigan Attorney General, customer groups, environmental organizations, energy trade representatives, and the Consumers Energy Work Team for the constructive dialogue that led to settlement in a 20-year blueprint to meet Michigan's energy needs while protecting the environment for future generations. All of this, along with the fundamentals of our simple but impactful investment thesis, leads to a consistent premium total shareholder return for you, our investors. At CMS Energy, we deliver for all our stakeholders. This is why you own us and what you can count on. Now, let me get on with sharing the great news of the IRP and our quarter. I'm thrilled with this settlement. It provides a 20-year blueprint to meet Michigan's energy needs while protecting the future, the environment for the future generations and ensuring financial certainty. You've heard me say before, our IRP is a win for everyone, and let me share with you why. Our customers will see significant savings in addition to cleaner and more reliable energy. We're accelerating our ESG ambitions to decarbonize and lead the way to protect our planet, exiting coal operations and achieving a 60% carbon emission reduction by 2025, growing our solar build to 8 GW, and accelerating 75 MW of battery storage between now and 2027. Our investors will see capital upside along with the purchase of the Covert Plant and economic incentives on demand-side programs, as well as the continuation of a financial compensation mechanism, FCM, on power purchase agreements, PPAs. We also received regulatory asset treatment at an ROE of 9% on our retired coal assets through the remaining design lives. This settlement agreement is closely aligned with our original filing, but most notably, we've dropped the purchase of CMS Enterprises assets, and instead we'll pursue long-term PPAs of 700 MW of Michigan-based capacity starting in 2025. While we believe the purchase of the CMS Enterprises assets was a good value for customers, our primary concern was ensuring we secured sufficient capacity to meet our customers' needs. The proposed RFP, coupled with the purchase of the Covert Plant and a delayed retirement of the Karn 3 and 4 peaking unit, will address this concern. DIG and the peakers and Enterprises will have an opportunity to participate in this RFP, but will otherwise continue to sell capacity as they've done in the past in the attractive bilateral market. This is a win for everyone. In March, we announced plans to achieve net zero carbon emissions for our natural gas system by 2050, which includes both our customers and our suppliers' emissions. This adds to our long-term plan, both electric and natural gas, to further drive decarbonization and provide meaningful proof points along the clean energy transformation. Net zero emissions across our natural gas system is certainly an ambitious target. However, we've modeled this extensively. We believe it's achievable. The lowest cost and most reliable transition to a clean energy future is through existing infrastructure in a clean fuel network. It also acknowledges that there are thoughtful ways to reduce and mitigate greenhouse gas emissions across important home heating and thermal electric generation resources. Both are important in ensuring long-term affordability and reliability for our customers. As we've demonstrated across our electric system with this IRP, these aren't just words. They're evident in our actions and our results. The proof points are in both our net zero methane target and 20% reduction in gas customer emissions by 2030. We're delivering on those plans and investment opportunities. This includes accelerating vintage main and service replacement and adding renewable natural gas to our system, all included in our five-year capital investment plan. It also means greater energy efficiency, carbon offsets, and potential hydrogen blending, which provide growth opportunities above our plan, strengthening and lengthening our investment horizon. Our decarbonization plan is good for our customers, our planet, and our investors. This is an important road ahead. We look forward to updating you on our progress. Like I shared at the beginning of my remarks, we've had a great quarter. We're off to a strong start of the year on all fronts. In the first quarter, we delivered adjusted earnings per share of $1.20. This is up 11 cents per share from last year, ahead of our plan, and positions us well as we start the year, giving us confidence as we navigate the nine months ahead. We are reaffirming our 2022 adjusted full-year guidance of $2.85-$2.89 per share, and we continue to guide to the high end of our long-term adjusted EPS growth range of 6%-8%. The IRP strengthens and lengthens our ability to deliver on our earnings glide path going forward. Looking forward, we continue to see long-term dividend growth of 6%-8% with a target payout ratio of about 60% over time. Today, we are reaffirming our $14.3 billion five-year customer investment plan. As we've noted, the IRP does provide upside to our current plan, but we'll remain disciplined in our approach. You can expect to see that update as we report fourth quarter results early next year. As I often say, strong execution leads to strong results, and this quarter was another impressive example. We are confident in the full-year guidance, and we are focused on delivering for our customers, the planet, and you, our investors. Now, I'll turn the call over to Rejji. Thank you, Garrick, and good morning, everyone. As Garrick highlighted, we're pleased to report our first quarter results for 2022. We delivered adjusted net income of $346 million, or $1.20 per share, up 10% from our 2021 first quarter results, largely driven by favorable weather and economic conditions in Michigan. From a weather perspective, a relatively high volume of heating degree days in the first quarter, coupled with the absence of unfavorable weather during the same period in 2021, provided $0.16 per share of positive variance as noted on slide seven. From an economic standpoint, we continue to see strong commercial and industrial load in our electric business, while weather-normalized residential load continues to exceed pre-pandemic levels. All in, weather-normalized load in the first quarter contributed four cents per share of positive variance versus the comparable period in 2021 and is either at or above pre-pandemic levels across each of our customer segments, particularly when excluding the effects of our energy efficiency programs, which reduce customer load by about 2% per year. Another noteworthy driver of our financial performance for the quarter was rate relief net of investment-related expenses, which contributed three cents per share of upside as we continue to realize the residual effects of tax benefits from our 2020 gas rate settlement. These sources of positive variance were partially offset by increased operating and maintenance or O&M expenses at the utility in support of key customer initiatives related to safety, reliability, and decarbonization, which equated to six cents per share of negative variance. We also realized $0.02 per share of negative variance for the quarter, largely related to annualized financing costs and the timing of tax expenses at the parent company. Looking ahead, we feel quite good about the remaining nine months of the year. As always, we plan for normal weather, which we estimate will have a negative impact of about $0.09 per share versus the comparable period in 2021. We expect the impact of weather will be offset by rate relief net of investment, which we estimate to be roughly $0.10 per share versus the comparable period in 2021, and is largely driven by our expectation of a constructive outcome in our pending gas rate case later this year. Closing out the glide path for the remainder of the year, as noted during our Q4 call, we anticipate lower overall O&M expenses at the utility, driven by the usual cost performance field by the CE Way and other cost reduction initiatives, and a more normalized level of service restoration expense on the heels of record storm activity in 2021. Collectively, we assume O&M cost performance will drive $0.29 per share of positive variance. Lastly, we're assuming normalized operating conditions at Enterprises given the extended outage it did last year, coupled with the usual conservative assumptions around weather normalization. As we've said before, we'll continue to plan conservatively like we do every year to ensure we deliver on our operational and financial objectives irrespective of the circumstances for the benefit of our customers and investors. Our ability to deliver the results you expect year in and year out is supported by Michigan's strong regulatory environment. As Garrick highlighted earlier, the multi-party settlement of our IRP provides more evidence of that. As noted, the IRP settlement that we recently filed includes a substantial near-term capital investment opportunity in the acquisition of the Karn gas plant, which strengthens and lengthens our financial glide path to the tune of about $0.03-$0.04 per share, with the assumption of reasonable parent funding costs and a 9% ROE on the retired coal assets. As we look ahead, we remain acutely focused on obtaining approval of our IRP settlement agreement and making progress on our pending rate cases, which are highlighted in the regulatory calendar on slide eight. As for the latter, just last week, we filed an electric rate case requesting a $272 million revenue increase with a 51.5 equity ratio and a 10.25% ROE. I'll note that even with this request, the typical electric bill for residential customers will remain below the national average. From a timing perspective, we expect an order for electric rate case in the first quarter of 2023. We also continue to work through our pending gas rate case and recently filed rebuttal testimony. We anticipate an order for the gas rate case by October of this year. The question we often get when we discuss our capital investment opportunities and regulatory construct is whether we can manage our costs to minimize the rate impact for our customers. I'm pleased to report that we remain hard at work on all aspects of our cost structure to preserve headroom for needed customer investments in the long term and to mitigate the challenging and inflationary environment in which we live. Turning to slide nine, you'll see that several countermeasures have been implemented over the past several quarters to offset inflationary pressures. On the left-hand side of the slide, you'll note that the table highlights the cost categories that have had well-publicized atypical levels of inflation, specifically costs related to labor, materials, and commodities, and the corresponding risk mitigation efforts that we have employed. Starting with labor, our workforce is roughly 40% unionized, and in 2020, we renegotiated all three of our collective bargaining agreements with five-year terms, which provides cost and labor stability over the next few years with a substantial portion of our employee base. On the non-union side, we have benefited from a strong retention rate, which is in excess of 95% and allows us to minimize hiring in a tight labor market. From a materials perspective, we're actively managing our supply chain to reduce rising input costs. Part of these efforts include leveraging market analysis to optimize terms and conditions with new and existing vendors where possible while broadening our vendor base. We are also deploying the CE Way in our distribution centers to eliminate waste, and we're exploring those best practices with our suppliers to reduce their costs and maintain availability of key materials. It is also worth noting that approximately 90% of our material costs are capitalized, which reduces the income statement impact in the short term as those costs are incurred over time. Lastly, given the well-publicized tightening of solar equipment supply, we'll remind you that our solar build-out is modular in nature and allows us to flex the projects over the planned period. On the commodity side, we continue to run our electric generation fleet in a cost-efficient manner to insulate our customers from market volatility when they are dispatched. In fact, the heat rates of our natural gas plants are some of the lowest in the region, which means we can offer power at a cost lower than market, and that provides substantial value for our customers. As we manage inflation risk in the current environment, you'll note on the right-hand side of the slide that we still have substantial episodic cost reduction opportunities longer term, which we estimate will generate over $200 million through coal plant retirements and the expiration of high-priced power purchase agreements. These cost savings are above and beyond what we'll aim to achieve annually through the CE Way, which I'll remind you was a key driver in our achievement of over $150 million of cost savings in aggregate over the past few years. Sustainable and agile cost management has been one of the key pillars of our success and enabled us to deliver on our financial objectives, and there remain ample opportunities to reduce costs across the business going forward. Given our track record of reducing costs, we're highly confident that we'll be able to mitigate risk in the current environment and in the long run, execute our capital plan, delivering substantial value for our customers and investors as we always have. With that, Austin, please open the lines for Q&A. Thank you. As a reminder, if you'd like to ask a question, it is star followed by one on your telephone keypad. If for any reason you would like to remove that question, it is star followed by two. Again, to ask a question, press star one. As a reminder, if you are using the speakerphone, please remember to pick up your handset before asking your question. First, we will pause here briefly as questions are registered. Our first question is from Michael Sullivan from Wolfe Research. Michael, your line is open. Hey, good morning, everyone. Good morning. Hey, Garrick. Can you maybe just give a little more clarity on what you mean by strengthen the 6%-8% as it relates to the IRP upside? Is there any reason that we shouldn't think of that as putting you above the 8%? Great question, Mike. Let's start here. This is a great settlement, but there's an important regulatory process that we're still in the midst of. Just like back in 2018 and 2019, there's a few parties that have contested settlement. That's pretty typical. We anticipate that to occur over the next month in the regulatory proceeding. There's a schedule for that, a calendar for that occurs over the month of May. Then the commissioners will issue an order, which we anticipate in late June. It could drift into July, but we anticipate late June at this point. I do not want to be out in front of the commissioners on this and put the cart in front of the horse, per se. Here's what I'll tell you on this. We feel good about the settlement and the ability because it's the number of parties around and to be able to navigate that process. What it means from a plan perspective, as we've shared, that strengthen and lengthen our plan. It gives us great confidence in our ability to achieve the 6%-8% toward the high end. As we've shared, this is again, upside to the plan. The IRP is upside of the plan. Here's how I think about it. We know and we've certainly made it clear that in 2023, Cover comes into plan in the May time frame. That's good from a planning perspective. Remember this important piece in the 6%-8%. We deliver each and every year, and then we rebase off of actuals. That's an important piece. It's that compounding, that quarterly, you know, compounding and it's just, it's quality of earnings, which you've come to know and expect. Frankly, that allows us to do the strengthening and lengthening across the broader plan. Okay, sorry. If I could just pry a little more on that. I mean, are you trying to imply that there may just be one outsized growth here, and then that's where you would rebase off of to see six-eight continued off of that? Is that a fair way of reading that? No, we don't do sugar highs. You know, we've got nearly 20 years of consistent financial performance. I mean, we're going to deliver, you know, our plan here is to deliver year 20. Again, I think there's strengthening and lengthening of that plan comes from the ability to be at six-eight toward a high end. We've got great confidence in that, but also this rebasing. Each and every year, you know our history, we deliver, and then we rebase off actuals, and that provides a nice opportunity to strengthen the length of the plan. Okay, got it. Maybe going in a different direction. The electric rate case you just filed, maybe if you could just walk us through conviction level and getting a bigger portion of the ask this time, given the order late last year and maybe some differences this time around or lessons learned. I feel really good about this rate case that we're filing, and I'm again confident in this regulatory construct. There's been a number of signals here over the last quarter that gives me confidence in the regulatory construct. Let me start there. We had a rehearing on our electric rate case. That was a positive for small dollars, but a positive. Our gas rate case, we had staff's position. The initial volley was constructive and a great starting spot. This IRP settlement with staff, with the Attorney General, provides another data point that speaks to the constructive nature of this. We took feedback after that last electric rate case. I shared that in the last earnings call, and we rewrote a lot of our testimony, specifically in the area of electric reliability, enhanced and bolstered our business cases. This is going to be a step change and is a step change in our filing. I'll just share that we have more work that we're working on to continuously improve that rate case process. I feel good about our filing. It's primarily made up of electric reliability and resiliency work, important work to deliver for our customers. There's also the Covert facility in there. There's a little bit of work on economic development. We've seen a lot of growth here in the state to support that work and this broader clean energy transformation. I feel good about the case and the strength of the case and getting a good outcome. Okay. Thanks a lot, Garrick. Appreciate it. Our next question is from Jeremy Tonet from JP Morgan. Jeremy, your line is open. Hi, good morning. Hi. Thanks. Just wanted to go with the IRP a little bit more. You talked about some of the earnings uplift there and just wondering if you might be able to share, I guess, financing needs that might be possible on the back of that. Then separately, could you walk us through the RFP that was agreed to as an alternative to the DIG acquisition? Just wondering, there's been a lot of focus on the state and potentially extending Palisades. Do you think this could be an option here? Reg, we'll start with the financing piece, and then we can bounce back and forth on your other questions. Yeah. Jeremy, thanks for the question. I'd say with respect to the financing needs, coming out of this IRP settlement agreement, we'll be obviously focused on, assuming we get approval, the acquisition of the Covert facility, that would take place around mid-2023, call it the May time frame. We would plan to fund that with debt at the utility. Given our rate-making capital structure, you consume about half of it's funded that way, so call it roughly $400 million or so based on $815 million-dollar purchase price. Then we fund the balance at the parent. We still feel quite good about the commitment to avoid issuing equity prior to 2025, and so we would assume that the parent financing would likely include the sort of equity credit-like securities that we've done in the past that are hybrids of preferred, which we have really executed at optimal levels over the last several years. That would be the financing plan as we sit here today, and we'll keep an eye on how market conditions evolve over that time frame. Garrick, I'll hand it to you for the RFP and Palisades. Yeah. From an RFP perspective, what we agreed to in the settlement is equivalent of 700 MW of, you know. A portion of it, you know, 700 MW of load out there, capacity out there. 500 MW is dispatchable, and that's the nature of that, an available, reliable generation in the state. Then 200 MW is right from the category of renewables, and again, power purchase agreements. For those power purchase agreements that are not associated with the affiliate, there's the opportunity to earn a financial compensation mechanism on those. CMS Enterprises has the opportunity to bid into that, to that 700 MW, primarily in the 500 MW that are dispatchable in nature. So that's the nature of the RFP. In terms of Palisades, it's important to remember we're not the owner or operator of Palisades. We've not been involved in any conversations with the Department of Energy. If there's specific questions in this call on Palisades, I'd really direct them to Entergy, specific to the plant. Now, our governor has came out in support of keeping Palisades operational. We're certainly supportive of our governor and the administration. In even a broader context, we believe in nuclear energy as part of the solution here for reliable, dispatchable, and clean energy across our nation and in Michigan. Our PPA on that facility expires here at the end of May. It is an expensive purchase power agreement. As we've shared in the course of this call, we're laser-focused on reducing costs for our customers. That is front and center for us. We'd certainly entertain a long-term power purchase agreement, a new power purchase agreement with the facility, entertain discussions and conversation about that, but it does have to be at a competitive price. That'll be important factor. Also we expect to receive a FCM on that new PPA as well. Got it. That's very helpful there. Thank you. Maybe pivoting a bit here towards decarbonization. What investment opportunities are you seeing in support of decarbonization for the gas system? Maybe thinking about RNG a bit more, how much regulated CapEx do you think this could translate into? Well, in our five-year plan, there's a hefty amount. There's about $5 billion, a little more that's aimed at decarbonization of our natural gas system. Again, it's. You get multiple benefits. You're out there replacing old pipe, vintage pipe, as we call it, in services. It makes the system safer, improves reliability in the natural gas system, also eliminates methane emissions, one of the leading causes of climate change. We've got a target of net zero by 2030, so those investments are being made right now over the course of the five years, and we'll extend into the 10-year plan as well. We see our renewable natural gas is also part of that solution. It is part of this gas rate case that's underway right now. If you get into the details of staff's position, they were not supportive of that renewable natural gas. However, they left an opening in there, which we think we can mitigate in the course of rebuttal and move that into the utility. Some work to be done there in our gas case. Got it. That's helpful. I'll leave it there. Thanks. Thanks, Jeremy. Our next question is from Andrew Weisel from Scotiabank. Andrew, your line is open. Morning, Andrew. Thank you. Good morning. First question, I wanna ask a little bit more about the inflationary pressures. I appreciate all the details you gave. In the past, I think you've talked about limiting bill increases to, say, 2% or 3%, if I remember correctly. My question is how confident are you about your ability to stick to that in, say, 2022 and maybe 2023? I assume widespread inflation won't be as big of a concern after that. In the near term, do you still feel comfortable with those past targets? Everyone in this sector and even outside the sector is seeing inflation. To me, the bigger question is who do you think is best at managing that? I would put us up toward the top of the list. Our ability to leverage the CE Way and to, you know, provide cost savings for our customers is certainly, again, we talk about as flexing our muscle here. We got great examples of that in 2020. We saw sales drop. We found $100 million of savings in the organization. We've got in 2021, in August, we had $0.16 of impact just due to storms. We offset that. We have an amazing ability to leverage the tools, the CE Way, and then plus automation, I would add, to mitigate costs. Rejji went through a number of examples of the way we manage that across the system. Long term, when we look at our five-year plan, and even in the short term, there's a nice ability to manage rates and keep them affordable for our customers, in line with kind of traditional inflation, you might say. I feel confident in our plan to be able to mitigate much of the impact of inflation going forward. Okay, great. Next question is at Enterprises. You mentioned that DIG and the Peakers will likely bid into the upcoming RFP. I don't expect anything too specific for obvious competitive reasons, but can you qualitatively talk about how you think of the trade-off between, say, price certainty and stability that would come with a long-term contract versus the potential for lower revenues given the competitive nature of bidding? I think Rejji and I will tag team this one. Bottom line is it's something that Enterprises is going to consider. Again, I'm not certain we'll participate in that. We have the potential to participate in that RFP, and we'll make that evaluation. The capacity market is certainly, as we've seen across MISO, an opportunity as well, and for upside, with our Enterprise assets. There's an evaluation we'll participate in and take a look at the impact of how DIG participates either in the bilateral market or our bids into this longer-term PPA with the utility. Yeah, Andrew, the only thing I would add to that is, philosophically, we've always had the mindset that we try to run our non-utility businesses like a utility, and as low a beta fashion as possible. You know, if we have an opportunity to get attractive levels for energy and capacity, and we can do that over the long term, you know, that's generally been our bias, and we've done that on the energy and capacity side at DIG for some time now. When we owned the bank, that's how we ran the bank as well. It's just trying to lock in as much revenue as possible and run it on a lower basis. We'll see. I think it's a function of where the market is at the time and how long the PPAs are in the bilateral market versus what might be offered in this RFP. We'll see what the fact pattern looks like, and we'll run the business accordingly. Okay, that makes sense. Just lastly, what's the timing of the RFP and when you'll communicate if DIG is in fact participating or not, DIG and the Peakers? I would anticipate, at least, initially here, that our RFP would be issued within the fiscal year 2022. Okay. Our next question is from Insoo Kim from Goldman Sachs. Insoo, your line is open. Hey, thank you. Hey, Garrick Rochow. On the solar, you know, you've talked about just the modular nature of it and kind of shift the timing and whatnot. Just holistically, I guess, whether it's, you know, the megawatts that's kind of a build and transfer or some of the PPAs that are expected to come online, I guess, over the next couple of years that will earn the financial compensation mechanism, just your broad level of confidence, I guess, in terms of, you know, being able to mitigate any impact from what's going on in the solar space. I'll start with the punchline or the bottom line. No material impact to the five-year plan. Continued confidence in our 2022 guidance and then continued confidence in the longer-term plan, the five years and the 6%-8% and being toward the high end. That's the punchline. Now, let me tell you why. This IRP is 8 GW. It's not 8 GW tomorrow or even in the five-year plan. We have 15-20 years to build this out. There's considerable amount of flexibility to be able to construct that. Just like everyone else in the industry, the Department of Commerce and this investigation slowed things up in some of our projects. These are megawatts that are going to get built. These are renewable projects that are going to get built because they're part of our broader IRP in nature. Again, let me try to offer some context from a size perspective. We're building out owned generation here about 150 MW per year. We're talking about two projects. In 2024, we go up to 250 MW per year. This annual capital spend is around $200 million-$250 million. This is manageable, easily manageable. In fact, this is, you know, I've been in operations for 20 years. This is work that happens every year. There's stuff that goes in and out of the plan based on a lot of different variables, and so easily manageable from a capital perspective. In fact, just as a reminder, we got $3 billion-$4 billion of capital backlog in things like electric reliability, investments in our gas system. 80% of those projects are less than $200 million. There's ability to put them into the plan and offer real value for our customers. The other important part of this clean energy journey, as well as a reminder here, that although solar has been impacted, we're still progressing with wind in the state of Michigan, and we're investing a lot in the space of our hydro facilities. We have 15 hydro facilities. There's smart, thoughtful investments occurring there as well, and those are in progress. They're on target. I feel good about that from where we're headed from a clean energy perspective. The last piece that I'll also point to, and I think this is important from a capacity perspective, and I noted in my prepared remarks, is Karn 3 and 4 continues to operate to 2031. Karn 3 and 4, we originally proposed retiring in 2023. This settlement offers some additional flexibility from a capacity build perspective. Again, we've got some flexibility to weather things and be able to meet all our customers' needs. Again, feel good about the capital plan, confident in our earnings guidance, both in the year and in the long term. Understood. My second question on those enterprise assets, the non-regulated ones, like, you know, given they won't be going to rate base here with these settlements, and, you know, depending on, you know, what you decide on the RFP, whether you'll participate or not, how do you just think about strategically these assets now going forward as part of your portfolio? The enterprise assets are an important part of our portfolio. It's small, but important. It makes about 4% of our earnings mix. Again, this goes back a little bit. We used to talk about the Ferrari in the garage, and then it was the Tesla in the garage. It's probably the new electric Corvette in the garage. I don't know how you want to say it, but with capacity prices, there's some certain pieces of upside here in some of our DIG and some of the peakers. By and large, this business is about renewables and customer-focused renewables. It's small in nature and we deliver strategic solutions for our customers. Hasn't changed, but it continues to be a consistent performer for our business. Understood. It's been a while since we've heard that reference, but I'm glad to hear again. Thanks. I wanted to bring that back. It's, you know, it's a great asset for us. Our next question is from Shar Pourreza of Guggenheim Partners. Shar, your line is open. Hey, good morning, guys. Hi, Shar. How are you? Great. Just one follow-up on Palisades, Garrick. Just can you remind us how many megawatts could be potentially re-PPA'd under the assumption the plant can remain viable here? And obviously, the government highlighted that there is a potential owner that's interested in acquiring the asset. Are you having sort of any discussions right now in recontracting, assuming you can keep the asset viable, which timing seems a little bit tight, but just curious if there's any dialogue. It's roughly 800 MW, a little shy of 800 MW. I think it's around 780 MW for Palisades. In line with the governor's letter, we're certainly open to conversations and discussions. We've had some conversations more just to understand the complexities of the situation, understand what's going on, but nothing that's really got to any level of seriousness on a long-term power purchase agreement. Okay. Got it. Just real quick, Rejji, as you're sort of thinking about financing needs, can you just remind us on the preferred options, and do you see a potential to lean more on credit metrics, just given nearly a fully regulated business mix and potentially accretive CapEx updates in the near term? Yeah. Thanks for the question, Shar. We have been targeting that sort of mid-teens FFO to debt for the rating agencies for some time now, and certainly the sale of EnerBank gave us a nice uplift, at least in the case of S&P. While we do have some cushion to maybe be a little more aggressive in the funding strategy, we worked very hard to get to the level that we're at today. We've worked very hard to get the ratings we have today, and our intent is not to stress those metrics some. We like the fact that we've got a little cushion on those metrics. That if that allows us to continue not to issue equity through 2025, we'll look to do that. If we can extend beyond 2025, we'll look to do that, but not to the detriment of our metrics or ratings. We still like that mid-teens area. That's where we are. We have a little cushion there, and we'll continue to plan the business that way. Okay. Terrific. That's all the questions I had. Thanks, guys. Thank you. Thanks, Shar. Our next question is from Jonathan Arnold of Vertical Research. Jonathan, your line is open. Morning. Morning, Jonathan. Hey, good morning, guys. Quick one on Palisades, you know, were it to be extended, I guess whether or not that was with a PPA, how would you think about that in the context of your overall sort of IRP plan and just capacity needs? Two pieces there. It's really, really important, and it does have to be a competitive power purchase agreement, so I'll reemphasize that component of it as well. If we were to consider that and have those conversations, again, we would expect a financial compensation mechanism on those as well. Again, it just provides additional flexibility for us in clean energy. It will be a little bit long from a capacity perspective, but there's opportunities to think about different investments and give us a little more flexibility in our even further flexibility in our solar build-out. Okay. Then I have to go back a bit. I think it was early last year that you last gave the slide on DIG and the peakers, you know, showing potential pre-tax earnings, you know, step-up opportunities. My question really is that prior disclosure still a valid one that we can think about, or should we be sort of looking for you to tell us something else at some point in the future, or is that still a decent guide? Yeah. Jonathan, we still feel good about the revenue opportunities at DIG, particularly now that we don't foresee it being part of the IRP. I'm gonna go from memory, but we were somewhere around $35 million of revenue or pre-tax earnings associated with DIG, and we still think that that's a pretty good base case to run. What we're also seeing, probably unsurprisingly, is a tightening of the bilateral capacity market, which I think Garrick accurately noted as attractive in his prepared remarks because we do continue to see it tighten, and we do expect to see even more attractive capacity and energy opportunities on the contracted side at DIG. I'd say base case, it's good to be around that $35 million area, but there's certainly upside opportunities in the coming years, if we continue to participate in that bilateral market. I guess I was asking more about the $90 million that you had that $35 stepping up from. I wasn't sure if you wanted to- From an upside. Yeah. That working assumption was if the bilateral market went to cone, which was at the time around $7.50 per kW month. You know, in the event the bilateral market continues to tighten and gets to those levels, that certainly could be within the realm of possibility to see upside at that level. We're certainly not planning for that given our nature. Yeah, it could be an opportunity over time if we continue to see Zone seven tighten. Great. Thank you for that. Yeah, I think that's it. Thank you. Yeah. Our next question is from Travis Miller of Morningstar. Travis, your line is open. Good morning, everyone. Morning, Travis. Thank you. Wondering, as you did your long-term reliability modeling as part of that IRP, when did reliability get to be an issue? Is that 60%+ range in 2040 with renewables, is that about where you start to max out on renewability to put into the mix? I wouldn't put it that way. Here's the process of an integrated resource plan. We do a loss of load expectation study. There's a number of other variables. We look at it from a system reliability perspective, and so it's an important mix of renewables and batteries particularly in part of the plan, but also, you know, dispatchable generation. You're getting things like gas, at least in our case, natural gas in part of the plan. All those come together. This plan that we submitted was more reliable than our previous IRP in terms of the build-out. Our extension of Karn 3 and 4, again, was planned to be retired in 2023, and extending that to 2031 continues to provide additional reliability over the course of this decade. Okay, got it. Kind of similar on that, could we expect some of that upside in the distribution and transmission bucket as opposed to maybe more on the generation side? The upside CapEx that you were talking about. Well, broader, we have. Again, I look at our 10-year, 15, 20 years, there's ample capital upside. We have about $3-$4 billion of capital that's not in the plan that are specific projects identified that improve our gas system, more replacement of mains that looks at reliability and resiliency. We've got a large $5.5 billion focus on that. I mean, much of that's in this electric rate case to improve reliability for our customers. Those are the things that fit into that, to that plan and continue to have that long horizon of capital investment opportunities. Okay. Then one just real quick. Would the IRP change your general kind of every year type of cadence on the regulatory filings, either electric or gas? The IRP won't have any impact on our rate case proceedings. We'll continue to stay- Thanks. The main plan is to go with annual rate cases, but on occasion, we do stay out for a year, and we have. Our gas case is a great example of that. We've been out for two years and are in for a case right now. Okay, great. Thanks so much. Yep. Thank you, Travis. Our next question is from Durgesh Chopra of Evercore ISI. Durgesh, your line is open. Hey, good morning, team. Morning, Durgesh. Thank you for taking my question. Good morning, guys. Just one for me. Maybe can you just at a high level elaborate how the financial compensation mechanisms work? As we're thinking about our models, you know, how should we be modeling upside in terms, you know, of timing? Is this sort of gradual, you know, pickup in earnings as you sort of go through the RFPs, or how does that work? Any color is appreciated. Thank you. Yeah, Durgesh. This is Rejji. The financial compensation mechanism is applied to PPAs. You know, we can have the team go through the math with you offline, but in essence, you're applying what is the equivalent of our after-tax WACC. As it stood in the 2018 IRP, it's just over 5.6%. You're gonna apply that to the megawatts of PPAs you're taking on as part of the IRP. In the first IRP in 2018 was 550 MW or thereabout. You would apply it to that. You also obviously take into account the hours per year, the energy cost, as well as just capacity factor of the resource. You put all that through the Veg-O-Matic. For that first tranche of the IRP, you know, we assume that was about $4 million of pre-tax earnings. Per that math, you would apply that to what we will PPA in this next IRP. We've said it's about a 700 MW RFP that we'll roll out, assuming we get approval in the latter portion this year, as Garrick noted. There'll be two tranches, 500 MW dispatchable, 200 MW of other, and we'll have an FCM applied to those PPAs once those are resolved. Is that helpful? No, very helpful. Thank you. In terms of timing, you mentioned later this year. These are earnings uplifts next year. Is that the right way to think about it? Yeah. Let me be clear. The RFP for that 700 MW tranche of PPA, and again, it's gonna be two tranches, one 500 MW of dispatchable local and 200 MW of other. The RFP would commence this year, but we would not effectuate the PPAs until the 2025 timeframe. You wouldn't see any of the earnings associated with those financial compensation mechanism until that timeframe. I also want to be very clear that in the event Enterprises participates in that 500 MW tranche, then they would not be eligible for the FCM, or we would not be eligible for the FCM. Thank you, Rejji. That is very helpful. I'll follow up with the IR team with some more details, but this is extremely helpful. Thank you. Thank you. Our next question is from Gregg Orrill of UBS. Gregg, your line is open. Morning, Gregg. Yeah, thank you. Good morning. Maybe a clarification. This might bring up an old discussion, but what is the design life on Campbell units where you would earn the 9% ROE under the IRP settlement? Gregg. Of the three units, two of the units design life runs till 2031, that's for Campbell One and Two. For Campbell Three, it's through 2039. That's where we'd earn that 9% on the regulatory asset after the retirement date. Thanks. Thank you. Next question is from Julien Dumoulin-Smith from Bank of America. Julien, your line is open. Morning, Julien. Hey, good morning, team. Hey, howdy. Thanks for the time. Just coming back to the earlier conversation on the $0.03-$0.04 of upside here from the IRP. Can we go back to that math and just rehash it to start from the, like, the gross number and net that down? Specifically, what I was trying to reconcile is just how we think about the acquisition here, sort of the gross $800 million and then reconciling that down to the $0.03-$0.04 ultimately. It seems just a little conservative, shall we say, relative to what I would otherwise expect. Maybe we could be a little bit more explicit, again, understanding some of the nuances on financing, to try to reconcile that. Yeah, Julien, this is Rejji. For the $0.03-$0.04, you know, we're assuming it's a $815 million purchase price as codified in the settlement agreement. Given our rate construct, you can assume, again, with our rate-making, capital structure, you're gonna get 40% of that as equity. You have to net out obviously your parent funding costs. You know, we've made the usual conservative assumptions around that. That's where you get a good portion of the accretion I noted. But you also have to net out, I'd say the downward revision in the ROE on the regulatory assets. Remember, the IRP was not incorporated into our five-year plan, and we were assuming we're gonna earn 9.9% on those coal facilities through their design life. With the settlement agreement as structured, that's gonna step down to 9%. You get a little bit of dilution there, plus dilution from the parent financing. That's what gets you to sort of that $0.03-$0.04. It's also worth noting again, clearly, we are not presupposing any outcome on the PPA at that 700 MW tranche. That's not included in the math. You know, we're applying the usual conservatism, but that's where the math takes us, about $0.03-$0.04. In 2023, if all comes to fruition, obviously you have a partial year, so you'd only get about six-seven months of that if we close the transaction in May as anticipated, and then you get annualized about $0.03-$0.04. Is that helpful? Yeah, absolutely. I appreciate it. Yeah, I very much appreciate that. In fact, actually, since you bring it up here, just to keep going along that logical thought process, how do you think about that 700 MW PPA, I mean, in terms of ownership opportunities? You seem to be in part downplaying the DIG element of this in terms of committing to bid that into that procurement process. I mean, what other avenues or shots on goal, if you wanna call it, do you have for an ownership opportunity there, as you think about the array of different approaches you could take? Well, yeah, to be very clear, it's certainly an opportunity for DIG, particularly or specifically for that 500 MW tranche, which is essentially gonna be e armarked for local dispatchable, a local dispatchable resource. Certainly DIG would qualify for that. That is certainly an opportunity. As we think about the alternatives as fiduciaries, they could certainly participate in that, or DIG could participate in that. You know, a 10-year PPA, if DIG prevails, that's a pretty attractive alternative depending on where the economics end up. As I mentioned earlier, we're also seeing a very attractive bilateral market shaping up here in Zone seven, just with continued tightening. We are seeing levels that are in excess from our existing capacity contracts and energy contracts. We'll weigh the alternatives once the RFP comes around and see what we'll do there. On the 200 MW, you know, obviously DIG wouldn't be eligible for that, but we'll see what else comes around, and we'll get an FCM on that. We're not presupposing any of those economics in the EPS I noted in my prepared remarks, but it certainly creates an opportunity for DIG without a doubt. Yeah, indeed. All right, guys. Thank you. Best of luck. Thank you. The next question is from Nicholas Campanella of Credit Suisse. Nicholas, your line is open. Hey, good morning. Morning. Thanks everyone for taking the questions. Congrats on the IRP and thanks for all the details there. Sorry to belabor the point on the renewable supply chain stuff, but just the bottom line takeaway is that you have, you know, I think roughly $700 million of clean, call it clean generation spend in 2022 and then $600 million in 2023. That's all unchanged. Is that correct? I think the important part of that clean energy spend in those two years you referenced is it's not all solar. There's a good portion of hydro and wind in there. Again, we're talking about $200-$250 that would be on an annual basis that would be in the solar area. That's the difference. Is that helpful? Great. Thanks. Yeah, that's very helpful. Thank you for that. And then just, I know in the fourth quarter, you know, we talked a lot about Covert, so I figured we could talk about some other upside opportunities. You know, in the fourth quarter, we talked about the VGP potential gas and electric capital upside. I know they weren't in the deck today, but maybe can you just kind of talk about, you know, where you are in potentially bringing those opportunities into the five-year plan? Is that more of a EEI fourth quarter item? I know we're focused on the IRP in the near term, but just what about all the other upside opportunities that are outside the plan today? That's great. Again, we'll take a look at this five-year plan. We're building it out right now, and we'll share it here in Q4. Obviously, Covert's a big piece of it. There's other elements within an IRP as well. We accelerated 75 MW of battery storage into the years of 2024 to 2027. That has to be incorporated in as new capital upside in that five-year plan. The extension of Karn 3 and 4 has some impact as well. Those are all additions and things that need to be worked through from a capital plan. In terms of the voluntary green pricing, that also it continues to progress nicely with our customers. As they subscribe, we build out that plan. We've issued an RFP for that work. I haven't seen the results of that yet. It's still out there. That would be a potentially solar. It could be other renewables that build in the 2024-2027 timeline. That upside is, again, we plan conservatively, materializing. We're not ready to announce that yet, but directionally, it looks good. Is that helpful? Great. Thanks. Yeah, thank you for the time today, and congrats again on the IRP. Yeah. Thank you. The next question is from Paul Patterson of Glenrock Associates. Paul, your line is open. Hey, good morning. Hi. Morning, Paul. Congratulations on the IRP settlement. Most of my questions have been answered here. Just, you know, with respect to sales and what have you, is COVID over, do you think? I mean, are we now sort of a normal level of what you think will be normal going forward? Or, I don't know. I'm just hoping maybe it is. We're all, Paul, we're all hoping it is over too. Rejji will walk through a sales piece a little bit, and then I'll talk more on some macro factors. Maybe just touch on sales, Rejji. Yeah. Paul, to be clear, I won't give you a medical assessment because clearly the pandemic is still with us. I know that's not the spirit of the question, but figured I'd be remiss if I didn't say that. From, I'd say a retail sales perspective, we continue to be encouraged with what we're seeing virtually across all the customer classes, as I noted in my prepared remarks. You know, whether it's commercial, you know, we're up, you know, 3% above pre-pandemic levels. Looking at sort of Q1 2022 versus Q1 2019, residential is up versus the 2019 pre-pandemic levels. We're still seeing that nice mix that we've enjoyed for the last couple of years. Residential started to come back a good deal, but still hanging in there and again, in excess of the pre-pandemic levels. Then on a total retail sales basis, you know, we are, I know, about 1% above the pre-pandemic levels, and industrial is about flat, excluding one larger customer. I would say, again, per my prepared remarks, I think at this point, we are effectively at or better than pre-pandemic levels across most of our customer classes. We feel good about the economic conditions in Michigan. You know, we continue to see very attractive leading indicators. I think it's also worth noting that of the percentages I just shared with you, that does not take into account the energy waste reduction, you know, programs we have that reduce our load year-over-year by 1.5%-2%. When you exclude that performance looks even better. We feel very good on the retail sales side. Again, obviously the pandemic's still with us. Garrick, I'll hand it to you if you have any other comments. Yeah. Just some quick macro factors. Bloomberg recognized Michigan as the number one economy, state economy coming out of a post-pandemic. That's certainly a highlight. We've been recognized as a top state foreign direct investment over 14, really approaching 15,000 different firms that have located here in Michigan, 5,000 different locations. The big announcement with General Motors, but it's not just General Motors, there's a host of other things from manufacturing to agriculture and agricultural processing that have grown here in the state. Feel good about the broader economic trends that we're seeing here in Michigan as well. Thanks for your question, Paul. Okay, great. Just there's the other final thing is that there was some legislation that was recently introduced regarding outages and reliability. It seemed to me that maybe it was more of a Detroit thing or that might be driving. I wasn't really completely clear. I'm just wondering, do you have any color about, you know, you don't see this very often about what might be driving that legislation. I mean, it seems like it's some Democrat representatives or whatever that are proposing it. I'm just wondering if you had any thoughts about that. You know, our electric rate case and our plan underway certainly looks at improving electric reliability across the state to improve value for our customers. That's well underway. This legislation that was introduced, we don't anticipate getting any traction out of committee. That's the short of it. Okay, great. Thanks so much. Thank you, Paul. Our final question is from Anthony Crowdell of Mizuho. Anthony, your line is open. Hey, good morning, Garrick Rochow. Good morning, Rejji Hayes. Thanks for fitting me in here. Thanks. Hey. You bet. Hopefully an easy one. Where's Rocco? It's the first call I've been on without Rocco. I guess following up on Mike's earlier question, and I think the question was going around maybe moving above the 6%-8% EPS growth rate, and I think Garrick, you responded with CMS doesn't do sugar highs, I guess. If I think about it, is there any desire of the company maybe to get back to that previous earnings trajectory that you had before the EnerBank sale? Well, let me say the first question is Rocco's great. Austin is really performing well during those calls as well. A shout-out to Austin. Bottom line, from the earnings glide path we had with EnerBank, we see a clear path to do so. I would suggest that we're on that path for all the reasons I stated earlier, in regards to my response to Mike. I feel good about where we're headed and confident here in that growth rate in the future. Great. Last question, then I'll let you guys get back to doing some work there. I guess since the IRP filing, it appears, you know, we've moved from an energy transition theme to maybe an energy security theme. Have the state regulators given any messaging on energy security that would benefit your CapEx plan? I would argue that we're focused on both. Again, we can't sacrifice one for the other. This IRP that's settled here does both. It allows us for that clean energy transformation, as well as ensuring reliability and security of the state. Again, there's always some policymakers and legislators that are looking at that, and we're gonna continue to look at opportunities from a capital investment perspective. We feel really good about our five-year plan to balance both reliability, security of the grid, as well as the planet. I would add to it our customers ensuring that it's affordable. Rejji, why don't you add something as well? Yeah, Anthony, the only thing I would add, just to get into some of the specifics of the IRP from a capacity perspective, and to Garrick's comment, this is why we feel quite good about energy security or reliability, however you want to refer to it, is that the Covert facility is going to bring over 1.1 GW of capacity, again, assuming the settlement agreement is approved. We're also going to RFP shortly after approval, if all goes according to plan, you know, the 700 MW tranche of PPA opportunity by 2025, and so that offers additional capacity and again, 500 MW of that will be local dispatchable capacity. We're also extending the retirement or delaying the retirement of Karn 3 and 4, which also provides over a gigawatt of capacity. Again, we're taking, obviously affordability into account, we're taking reliability into account, and we're taking, obviously the clean aspects of our plan into account. That's why we feel good about not just the economics for all stakeholders, but most importantly, reliability. Great. Thanks for taking my questions, and looking forward to seeing you guys in Miami. Same. That concludes the question and answer session. I would now like to turn the conference back over to Mr. Garrick Rochow for any closing remarks. Well, that's it. Thank you, Austin. Nice job for our first time with Austin. I'd like to thank all our callers and investors for joining us today. Take care and stay safe. That concludes the conference call. Thank you for your participation. You may now disconnect your lines.