Greetings, and welcome to the FirstEnergy Corp. First Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. At this time, it is now my pleasure to introduce your host, Irene Prezelj, Vice President, Investor Relations for FirstEnergy Corp. Thank you, Ms. Prezelj. You may now begin. Thank you. Welcome to our first quarter 2022 earnings call. Today, we will make various forward-looking statements regarding revenues, earnings, performance, strategies, prospects, and other matters. These statements are based on current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from those indicated by these statements can be found on the investor section of our website under the Earnings Information link and in our SEC filings. We will also discuss certain non-GAAP financial measures. Reconciliations between GAAP and non-GAAP financial measures, the presentation that supports today's discussion, and other detailed information about the quarter and year can be found in the Strategic and Financial Highlights document on the investor section of our website. We'll begin today's call with presentations from Steve Strah, our President and Chief Executive Officer, and Jon Taylor, our Senior Vice President and Chief Financial Officer. Several other executives will be available for the Q&A session. Now I'll turn the call over to Steve. Thanks, Irene, and good morning, everyone. Thank you for joining us today. We're off to a solid start in 2022. Yesterday, we reported GAAP earnings of $0.51 per share and operating earnings of $0.60 per share, in line with the midpoint of our guidance. With our financial performance, operational momentum, portfolio of assets, and robust long-term business model, we are in a strong position, and I'm optimistic and excited about the future. Today, we are reaffirming our operating earnings guidance of $2.30-$2.50 per share for 2022 and growth of 6%-8% thereafter based on our five-year $17 billion investment plan. While the dividend is subject to board approval, I can affirm that we will still expect to maintain our annual dividend rate of $1.56 per share this year with the objective to grow the dividend within our payout ratio as earnings increase from our 2022 base. This year, we're focused on continuing our transformation into a company with a strong foundation, an unrelenting focus on our customers, and a leader in the energy transition. Over the last couple of years, we've asked a lot of our employees as we implemented a series of changes. From FE Forward initiatives to our enhanced values, numerous updates to policies and procedures, and multiple training sessions across the company, our employees have accomplished a lot, and they have done this while executing at a high level across the company. I am very grateful for all of them and incredibly appreciative of their work and strong performance over the many years, but especially over the last 18 months. I am very proud of what they have done. Building off this momentum, we believe that our employees and culture will be the single most important value drivers of our long-term strategy. Earlier this year, we formed a cross-functional culture transformation working group to consolidate, coordinate, and streamline our numerous initiatives designed to drive culture change with the goal of making these changes meaningful and impactful to employees. By better aligning our culture initiatives and narrowing the focus with a simpler, integrated culture change roadmap for 2022, we can help employees make meaningful steps in a few areas at a time. The outcome of this work resulted in identifying three key focus areas for our culture transformation for 2022. Embedding our refreshed values, integrity, safety, DE&I, performance excellence, and stewardship into every aspect of our culture. Fostering an open, trusting environment where leaders create opportunities for two-way dialogue and employees feel valued and empowered. Improving advancement and development opportunities for our employees. We are supporting these efforts by consistently demonstrating our values and action in communicating with employees, creating a culture champion network to support our transformation efforts, facilitating listening sessions hosted by me and other members of our senior leadership team, along with small group employee discussions and quarterly speak-up sessions that encourage open and transparent two-way dialogue. Enhancing our focus and accountability around more robust, meaningful discussions between employees and their supervisors that support career management and development. We're striving to empower employees to make their jobs more meaningful and encourage the candor and collaboration that can make our company more innovative, customer-focused, and a great place to work. Changing a culture takes time, trust, and persistent modeling, as well as alignment with our employees' personal values and needs. I am deeply committed to this, as is our leadership team, and we view it as critically important work. By listening, being more open and transparent, we can do better and produce better results for all of our stakeholders, including our employees, customers, and investors. Taking a more open and engaged approach is also a cornerstone of our efforts to prioritize our customers and enhance the customer experience. Last month, before winter utility disconnection moratoriums lifted in our areas, we launched an enhanced campaign to engage residential customers who may be facing financial hardships. We recognize that many customers in this position don't reach out for help, and they may be unaware of the various utility bill assistance programs available to them. To reach these customers, we produced a video message featuring several members of our customer service team. They spoke passionately about their desire to assist customers, and we raised awareness of various programs and payment options that might help during these difficult times. Our goal was to reach out and invite customers to come to us for help. At the end of March, we had more than 250,000 customers enrolled in utility assistance programs, with $71 million in funding applied to those accounts. Compared to the first quarter of 2021, that's an increase of more than 17% in contributions directly benefiting customers enrolled in these assistance programs this year. This effort also contributed to a continued decline of past due balances, which are now on par with pre-pandemic levels in Ohio and West Virginia, reducing the risk of bad debt. This campaign is the first step to enhance the customer experience, show customers that we care, and we will help them wherever they are on their journey. As we discussed on our fourth quarter call, FE Forward is our engine for optimizing our organization and customer-focused initiatives, including numerous projects designed to enhance communications, self-service options, and provide better experiences for customers who are in need of assistance. For example, we've recently enhanced our website to make it easier for customers to understand and pay their bills. They can also use new features to easily make a payment for a family member or friend, enroll in payment plans that level out their billing, identify assistance programs, and avoid service disconnection. From an organization standpoint, now that we've aligned our utility operations into a five-state model to enhance collaboration, streamline processes, and maximize efficiency, we are beginning a longer-term review to consider the possible benefits of combining our Ohio entities as well as those in Pennsylvania from a legal, financial, operational, and branding perspective. Finally, FE Forward will improve productivity and our cost structure through investments in digital technologies, upgrading and integrating key systems, and using data to help us make better, more efficient decisions for our customers. Through these investments, we anticipate significant productivity improvements, substantially reducing the need for high-cost external contractors that augment our workforce today. Our commitment to prioritizing customers also means providing excellent service and preparing for the grid of the future. In Ohio, we are nearing the end of the first phase of our Grid Mod program, which began in 2019 and includes investments in smart meters, distribution automation, and voltage regulating equipment. The program also supports our advanced distribution management system that is being installed to help automate the outage restoration process and optimize grid performance. We're excited about the benefits these investments can provide to our customers, including enhanced reliability, improved power quality, and greater visibility into their electricity usage. We plan to file for a second phase of Grid Mod investments in Ohio in the third quarter to continue this successful program. In New Jersey, JCP&L received approval from the BPU to begin installing smart meters on customer homes and businesses in 2023. The approved plan includes a capital investment of $421 million for the installation of more than 1.1 million smart meters over a 36-month period. Across our entire footprint, our utilities have installed more than 2.7 million smart meters since 2014, with implementation efforts nearly complete in Pennsylvania and currently underway in Ohio. In New Jersey, we are working toward a settlement of our proposed EV-driven program. The four-year program is designed to accelerate the adoption of light-duty electric vehicles with incentives and rate structures that would support the development of an EV charging infrastructure throughout our JCP&L service territory. We are also making solid progress to complete our sale of a 19.9% stake in FET to Brookfield. Last week, CFIUS notified FET and Brookfield that it's determined there were no unresolved national security issues and its review of the transaction was concluded. Yesterday, FERC issued its orders on the pending applications for Blackstone's designee to serve as a voting member on the FE Corp board and for authority to close the transaction with Brookfield. We remain on track to close the sale of the FET minority interest in the second quarter of this year and deploy the proceeds thereafter. We also continue to make progress in resolving outstanding litigation in order to provide certainty to stakeholders and focus our attention on the future. Last week, we reached a settlement in the ratepayer civil RICO lawsuit in the amount of $37.5 million. We previously recognized a reserve for this settlement in our fourth quarter 2021 earnings. I'm looking forward to working with our refreshed board, including new nominees, Sean Klimczak of Blackstone and Jana Croom, who is the Chief Financial Officer for Kimball Electronics. At the same time, I'd like to express my sincere appreciation to our outgoing board members, Don Misheff, Mike Anderson, Julia Johnson, Tom Mitchell, Chris Pappas, and Luis Reyes. I am very grateful for their expertise and guidance. Thank you for your time today. We are committed to continue delivering financial and operational excellence as we execute our long-term business strategies and transform our company into a more innovative, resilient, and industry-leading organization. Now I'll turn the call over to Jon for a financial update. Thanks, Steve, and good morning, everyone. Thanks for joining us. As Steve said, we're off to a solid start this year. Our first quarter GAAP earnings of $0.51 per share and operating earnings of $0.60 per share were in line with the midpoint of our guidance. Excluding the impact of our recently issued equity, rate credits provided to Ohio customers under our PUCO-approved stipulation last year, and accounting policy changes, operating earnings increased by $0.03 per share compared to the first quarter of 2021. Our first quarter results include several special items, the largest being a $0.06 per share charge associated with the redemption and early retirement of an $850 million FE Corp note in January of this year. Excluding the items I mentioned, the results in our distribution business decreased slightly but were consistent with our business plan. The year-over-year change was primarily driven by a slight increase in operating and other expenses, primarily related to planned plant outages in West Virginia and higher storm costs and employee benefits, partially offset by lower uncollectible expense. These costs were partially offset by higher customer demand and the continued economic recovery in the commercial and industrial segments. It's important to note that our operating costs were in line with our forecast as discussed on the fourth quarter call. Our total distribution deliveries increased 3.6% compared to the first quarter of 2021 and were only slightly off our load forecast for the first quarter. Breaking the year-over-year impact down by customer class, we saw a 2.2% increase in residential demand due primarily to weather. On a weather-adjusted basis, customer usage decreased only slightly versus the first quarter of 2021 as customers continued resuming normal work and social activities. Deliveries to commercial customers increased 7.6% and 4.7% on a weather-adjusted basis, which is a significant increase in this customer class. While sales to industrial customers increased 2.5%, with many sectors, including steel and automotive, showing recovery from recessionary conditions. Overall, customer demand continues to slowly return to pre-pandemic levels. Our one-year residential sales trend is about 3% higher than 2019 levels, while commercial and industrial deliveries remain about 4% and 2% below 2019. In our transmission business, first quarter results increased $0.03 per share, primarily due to rate-based growth associated with our ongoing investments in our Energizing the Future program. In our corporate segment, our results compared to the first quarter of 2021 primarily reflect lower interest expense and higher investment returns. In addition to our earnings guidance, we are on track to meet our cash from operations target of $2.6 billion-$3 billion this year and improve operating cash flow consistent with earnings over time. We met with the rating agencies earlier this month and had a good conversation about our progress, including our ongoing efforts to improve our balance sheet and strengthen the credit profile of FirstEnergy as we work to reach 13% FFO to debt by 2024, targeting mid-teens thereafter. As Steve mentioned, we're on track to close the FET transaction in the second quarter. As we said, we plan to use a significant portion of the $2.4 billion in proceeds from the Brookfield transaction, together with the $1 billion Blackstone equity investment to strengthen our balance sheet by reducing debt or debt-like obligations and to fund our capital program. In addition to the $850 million FE Corp note we retired in January, we plan to retire an additional $500 million at the corporate level after the Brookfield transaction closes and recapitalize certain operating companies to enhance their credit metrics and capital structures. Later this year, we'll make a determination on the deployment of the remaining $800 million, which could be used for a voluntary pension contribution, further reductions in FE Corp debt, or to fund CapEx. As we have mentioned previously, 2022 is a light year on the debt financing front, with up to $750 million of planned debt issuances. However, steep increases in interest rates and market volatility have impacted our pension plan. As of the end of the first quarter, the discount rate for our pension obligation increased nearly 75 basis points or 25% to 3.75%, while the assets in the pension plan had close to a 6% loss for the quarter. While the funded status has improved from 82% at the end of 2021 to 84%, the volatility in the interest rate and equity markets has created a potential headwind for higher pension expense in 2023 and beyond. This is something we will continue to watch throughout the remainder of the year, but we are already thinking through different opportunities to offset this potential headwind. Yesterday, we affirmed our 2022 operating earnings guidance and provided guidance for the second quarter of $0.46-$0.56 per share. Given the number of moving pieces we have this year, we recognize consensus estimates by quarter are somewhat challenging for analysts at the moment, and we appreciate your work to get through this period with us. We're off to a solid start this year, and we've got an excellent transformation plan to continue becoming an industry-leading company focused on long-term value for investors, customers, our communities, and employees. As always, I appreciate your time and your interest in FirstEnergy. Now we'll open the line for your questions. Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Once again, that is star one. Thank you. Thank you. Our first question is from the line of Jeremy Tonet with J.P. Morgan. Please proceed with your question. Hi. Good morning. Good morning, Jeremy. How are you? Just wanted to start off, I guess, with the review that you spoke about with potentially combining the Pennsylvania and Ohio entities in the respective states. Just wondering if you could walk us through in a bit more detail what would be kind of the gives and takes of why or why not do that as you think about this process going forward. Why is the review happening now as opposed to any point in the past as well? Just kind of curious on your thought process and what the drivers could be there. Well, thanks for your question. Through our FE Forward program, we have aligned our operations into a five-state operating model, and we're finding efficiency gains there already, even though it's early in the process, and we're very excited by that. We're reviewing the legal entity and financial consolidation because we believe the time is right to stand a team up and do a very thorough review of the opportunity. We have fielded calls and had questions over the last several years, in my experience, on whether there would be an opportunity here. Given our comprehensive review of the organization and opportunities, we thought now is the right time to get a project team stood up and underway. While it's early, the team's really gonna be charged with assessing the benefits for the company, you know, through any kind of consolidation. We also have to keep our customers in mind and what type of benefits they may see from any action that we take here. The potential benefits, Jeremy, to me, are the potential for increased efficiencies in some of our administrative functions. There is also a possibility that it could provide us better access to capital markets. That's really our view of it. Got it. It doesn't seem like there's anything out there that would prevent you or dissuade you at this point as long as everything unfolds as what you expect in the review process. Is that kind of a fair way to think about it? Well, I think the team is charged with probably a critical cost benefit analysis. Once we're completed with that, we're gonna do what makes sense here for our customers and for our company. If it makes sense to us, we'll move ahead, and we'll keep you updated on our progress. Got it. Thanks for that. Just pivoting here, I want to hit on some of these accounting changes that you're going through at your distribution companies. Could you just refresh us, walk us through the process that led you to these changes and how we should be thinking about impacts going forward here? Is everything kind of set at this point as far as what levels of changes there are? Yeah. Hey, Jeremy, this is Jon. First of all, let me apologize in advance for my voice. I've been under the weather this week, and my voice is a little off. To answer your question, there's really two primary accounting changes. One was corporate support costs that we had historically capitalized based on a methodology. As we went through the FERC audit, they had maybe a different point of view. We came to a conclusion that some of the corporate costs that we had historically capitalized going forward wouldn't get that level of capitalization going forward. Then the second accounting change was around vegetation management, where we had historically capitalized a portion of our vegetation management program. Through various state audits and the FERC audit, we decided to move forward with having all that flow through the P&L. On average, it's about $150 million a year that historically had been capitalized that now will flow through the P&L. That is baked into our plan for the full year of 2022 and going forward. Got it. Sounds good. I'll leave it there. Thank you. Thank you. Our next question is from the line of Julien Dumoulin-Smith with Bank of America. Please proceed with your question. Hey, good morning to you, and thank you for the time. Maybe just high level, how did the April rating agency conversations go? How are you thinking about the prospects for fully being IG? Julien, thanks for the question. As Jon had mentioned in his prepared remarks, you know, we had three, what I would characterize as very good meetings in April to discuss our continued transformation and our ongoing efforts to improve our balance sheet. I think in all three cases, there was an acknowledgment of the progress that we are making as a company and executing on what our plan was for the last year to 18 months. It's also clear to me that we have to continue that track record of executing our business plan. Our focus, as we've said many times, is to get to the FFO to debt goal of 13% no later than 2024, and I think that's well received, as well as thereafter getting into the mid-teens level. We also had a dialogue on the use of proceeds for the two transformative transactions that we executed on in the fourth quarter. I think we are taking those steps needed to get to investment grade. As we have stated before, that's very important for us, and it is a very key focus for us moving ahead. Jon Taylor, I don't know if you have anything to add to that, perhaps. No, Steve, I think you said it well. I thought the meetings were very productive. A lot of discussion around culture and the things that we're doing around our code of conduct and other policies, as well as our financial plan. As you know, Julien, two of them have us on positive outlook. I think as long as we continue to execute, I'm optimistic that they're gonna be in a position to upgrade us sometime this year. It might be later this year, but as long as we continue to execute against our plan, I'm optimistic that they'll be able to do something later this year. Now, for S&P, you know, they have us on a stable outlook. They have a little bit of a different timeline. From the conversations that we had, I do anticipate that they could be in a position to at least have an outlook change maybe as early as the fourth quarter. Excellent. Great. Just a couple more detailed ones here, if I can. I mean, on the pension, what does that currently look like given the moves that we've seen in rates just even since 3/31? Can you quantify the potential earnings impact? Then also on the accounting change, was there any amount that was raised for the amounts you capitalized? What was that amount and in what jurisdiction? Yeah. Julien, on the pension, let me just maybe level set the group here on. You know, obviously there's a lot of moving parts, but there's been some volatility in the interest rate environment as well as the equity markets. On the balance sheet side of things, it's been positive, right? It's moved our funded status from 82% at the end of last year to 84%, which is about a $350 million improvement in the liability, which improves credit metrics by about 20 basis points. However, for pension expense, because of the plan losses versus the expected return, that's gonna put some pressure on or at least some potential pressure on pension expense. If you had to market at the end of March, it would have been about a $0.10 per share headwind for us. Now a couple of thoughts I would offer up. First of all, we have eight months to go in terms of setting pension expense for next year. So it's early, and we have time to recover. But more importantly, you know, the management team is already planning as if this headwind is gonna exist. We'll be able to use the O&M benefits associated with our FE Forward program that we recently announced as offsets. As well as we're looking at other opportunities around the timing of maintenance activities. We're looking at our debt financing plan, including voluntary pension contributions and many more opportunities. Bottom line is we wanted to be transparent and more importantly, articulate our plan that we're working on. Obviously, this is something that we're gonna continue to monitor, but we run our business conservatively and always have levers that we can pull to offset items such as this. Julien, this is Steve. I would just also add, we have seen volatility surrounding pension performance in our past. We have demonstrated in our past that we can overcome headwinds. I would add that it is our ongoing effort to be transparent about key issues like this. It's early in the year. As Jon said, we have eight months. The team is dedicated to defeat any headwinds that we will see. I'm very confident in that. Once again, we'll keep you updated throughout the year as we proceed. All right. And then- Oh. Oh- Jon- Yeah, please. Julien, I'm sorry. You had a two-part question. Maybe you could just reiterate it. Sorry. On the accounting changes, just what was in rate base, if you will? How is that moving around? Sorry. Just super quick clarification. Yeah. So all the accounting changes, Julien, were prospective. So, you know, it backs the historical rate base. So it was a prospective change. Excellent. Thank you, guys. Appreciate the patience. Thank you very much, Julien. Thank you. Our next question is from the line of Steve Fleishman with Wolfe Research. Please proceed with your questions. Yeah, great. Thanks. I think you answered my question on the pension. It sounds like that's just manageable within the 6%-8% growth rate. Is that fair? Yes. Yes, absolutely. Maybe any thoughts on whether you've obviously were very successful with the transmission sell down. Any thoughts on whether it might make sense for additional asset sales? I guess you don't really have any further equity needs except that $100 million a year thing. I'm just curious, any thoughts there? Yeah. Hey, Steve, this is Jon. You're right. We don't have any additional equity needs in our plan. Obviously, we feel like we have the right level of growth and cash flow to get back to investment grade and fund our capital programs and pay competitive dividend. You know, having said that, you know, I think if you look at the track record of this management team, we're gonna do what's right for shareholders. If there was ever an opportunity or need like that again in the future, we would absolutely look at all of our options and capitalize on the difference between public and private market valuations, just like we did last year. Okay, great. Just any, I guess, further update on the shareholder settlement process. I think after it got a little noisy with that one judge, just how confident are you that that's gonna get approved? Well, Steve, you're referring to the derivative lawsuit settlement. Just to- That's correct. ... everyone got it. All parties in the shareholder derivative cases agreed to a global settlement. As you know, it's subject to court approval. On March 11th, the parties submitted their papers to the Southern District of Ohio Court. The approval process will take a little bit of time. I just wanna continue to respect that ongoing process. That's where we stand on it. Okay, great. Thank you. Thanks, Steve. Our next question is from the line of Angie Storozynski with Seaport Global. Please proceed with your questions. Thank you. Just following on the investigations, can you give us an update what's going on with the SEC investigation? Sure, Angie. Thanks for your question. The investigation's ongoing, and we as a company continue to fully cooperate, and we're ready to do that. I can't really speculate on any timing for completion right now. We're somewhat on their timetable and we respect that, so I don't wanna get too far ahead of the process. That's really where we stand with it right now. You haven't provisioned, so there's no reserve or any provision for that potential settlement or fine, whatever you call it. No. You know, we've noted in our 10-Q that we believe that it's probable that we'll incur a loss, but we can't reasonably estimate it at this time. Okay. Secondly, Jon, you mentioned that the O&M is tracking your annual plan. It's a little bit surprising to me to see maintenance outage expense for power plants during the first quarter, which is the peak you know usage season for power. Is it just you know it's basically that's when the outage happens and hence the recognition of the cost? Yeah. The outage was in late February, March. You know, March being kind of a shoulder month, I don't feel like that's unusual at all. Okay. Lastly, I think that you guys mentioned that there's another Grid Mod CapEx filing in Ohio. Is that something new? Because I actually didn't expect any regulatory proceedings besides just the pending audits in Ohio this year. No, that's Angie, that's something that we've had on our radar for quite some time. You know, we started the Grid Mod I program three years ago. It was always the intention that there would be different phases of the Grid Mod program. That's something that we'll file probably later this year, or we will file later this year. We've already kinda you know, had some discussions with some of the intervening parties around the plan and some of the thoughts. It'll be kind of a continuation of our Grid Mod I program. You know, smart meters, distribution automation, voltage regulation. We might do some pilot work around you know, trip savers and utility-owned storage, battery-owned storage, those types of programs. This has always been in the plan. Okay. Last one. Where do you expect to be on the FFO to debt by the end of this year? From an S&P perspective, we'll be over 11%. You know, from a Moody's perspective, we'll be somewhere between, you know, 10.5%-11%. That's kind of where we're targeting. A lot of it's gonna depend on, you know, what we do with the final $800 million of the proceeds. You know, whether we fund the pension or, you know, take out additional holding company debt. Those numbers could change quite a bit, but that's our current thinking. Great. Thank you. Thanks, Angie. Our next question comes from the line of Michael Lapides with Goldman Sachs. Please just use your questions. Hey, everybody. Thank you for taking my question. Just curious, can you remind us, ex the accounting changes, what was embedded in 2022 guidance for O&M growth or O&M savings rate year-over-year? Yeah. Michael, if you adjust last year's O&M for the accounting changes, you know, just our base level operating costs, we're gonna be at about $1.4 billion this year. Last year, we were a little bit north of that number. As you start to think through the rest of this year, especially in the second half of this year, you will start to see some O&M reductions relative to the prior year based on our FE Forward program. And then that will continue into the following year. We're super excited about it, and it's meaningful, you know, reductions. You'll start to see that in the second half of this year. That's gonna give us some flexibility to do some things strategically where if we wanna put some additional O&M in certain jurisdictions or do some other things, it just gives us a lot of flexibility when you have that type of program. Got it. Yeah. Oh, go ahead, Steve. Sorry, Michael. This is Steve. I was just gonna add, even while you're gonna see that impact on O&M, which will be a lowering impact, we're keeping our customers at the center of the equation here also. That is even as we lower O&M by the reinvestment in certain ways in our various computer systems, the ability to streamline service to customers, the customer experience will be enhanced all at the same time. I just wanted to add that. Sorry, I stepped on you there. Oh, all good. Just one follow-up, though. When I think about the long term, kind of whatever O&M assumption is embedded in guidance, does that include the benefit you may realize from the utility consolidations in Ohio and Pennsylvania? Michael, so the benefit associated with the consolidation of Pennsylvania and Ohio, you know, that's not necessarily an O&M benefit. There might be some administrative things that, you know, are streamlined, but in the main, it's not an O&M benefit because as Steve mentioned, we've already gone to a five-state operating model operationally, right? We're already operating like that. That's where some of the benefits on the O&M side is the streamlining of the operations into that five-state operating model. The benefits associated with consolidating, you know, some of the legal entities is on the financing side, right? I mean, right now, those companies, smaller companies, and they're accessing the private debt markets and, you know, they're a little bit more expensive than if you were to access the public markets. Got it. Okay. Finally, just coming to one of the regulatory items, the light vehicle charging program in New Jersey that you're kind of trying to reach settlement for. Can you remind us what's the capital required in that? I think it's gonna be south of $100 million. I think it's gonna be probably somewhere around $50 million that will be rate-based. Yeah, we're working the settlement, and hopefully we'll have some clarity around that soon. Got it. Thank you, Jon. Thanks, Steve. Much appreciated, guys. Thank you, Michael. Our next question is from the line of Srinjoy Banerjee with Barclays. Please proceed with your questions. Hi. Good morning, guys. Thanks for taking the question. Maybe a couple of one. You mentioned OpCo recapitalization. Could you remind us which OpCos you would specifically target, and just how much of the proceeds from the disposal you would allocate there? Secondly, around the $800 million that could be used for pension contribution or holdco debt, are you leaning towards one or the other right now? You know, would Moody's prefer you to allocate it more towards holdco debt reduction, and could that accelerate the upgrade to investment grade? Thanks. Yeah. When it comes to the equity contributions into the operating companies, that's primarily gonna be in our Pennsylvania companies in Mon Power in West Virginia, maybe a little bit in Ohio, but primarily Pennsylvania and West Virginia. Like I said, just a little bit in Ohio. That's kinda what we're targeting right now. A lot of those cap structures over the years have moved down to, you know, the mid-40s. We're gonna get those back up to, you know, 50%. We feel good about that plan. When it comes to the $800 million, obviously, a lot of it depends on the interest rate environment, you know, where the funded status of the pension plan is, incremental capital opportunities. You know, our focus is on improving the balance sheet, you know, enhancing our credit metrics, but also to make sure anything we do is accretive to earnings. The conversations that we had with Moody's specifically, I didn't get the sense that they, you know, pension contribution versus holdco debt takeout. I don't think they. It counts as adjusted debt to them anyway, both. I didn't think they had a view one way or the other. You know, we're obviously, as we kind of make these decisions, we'll run things by them. Thank you. Thank you very much. Just one very quick follow-up. You know, when you have the conversations with the agencies, did you get a sense that they were looking for anything else outside of the sale of the, you know, the FET minority stake? So, you know, sort of conclusion of any of the investigations like the SEC one? Just curious there. Thanks. No, I didn't get that sense. I mean, like I said, I think for us it's just a matter of executing our plan, and you know, deploying the proceeds from the Brookfield transaction. I think they're very you know, pleased with the changes that we've made. They're very interested in you know, our cultural changes and the things that we're doing around our compliance program or and stuff like that. I didn't get the sense from them that there was anything else that they were looking for. I don't want to speak for them. I just don't recall that in the conversation being a big issue. Perfect. Thank you very much. Mm-hmm. Thank you. Our next question comes from the line of Paul Fremont with Mizuho. Please proceed with your questions. Thanks. Does the debt pay down at the holdco and the potential recapitalization of utilities in any way change your equity guidance for the next five years? If not, should we just expect that capital spending will ultimately be funded all with debt? Paul, you know, let me maybe address your question there. I mean, if you think about our $17 billion capital program, and the equity proceeds that we have coming in, plus the cash from operations that we'll generate over the five-year period, we're only gonna fund our capital program with 30% debt, $5 billion. In the meantime, we're gonna take out $1.5 billion. Over the forecast period, our balance sheet debt is only gonna grow by $3.5 billion, even though we're gonna invest $17 billion. Does that include expected funding, additional funding of the holding company? I mean, the plan right now is the holding company debt, after we take out $500 million this year, will be at $6.5 billion. We will not have any more holding company debt. In fact, if we make a decision that we're gonna take out more holding company debt, it will be less than that. Okay. I guess you're talking about possible pension funding. Have you determined on a target number for pension funding this year? It would be voluntary. It's a voluntary contribution. I guess in the past. There's no required- It's been, like, around $500 million. Is that sort of a reasonable assumption that that would continue? The remaining proceeds, Paul, is $800 million from the two transactions. If we decide to make a, you know, pension contribution, that's totally up to us. It could be the full $800 million. It could be we decide to go a different route and maybe take out additional holding company debt. Maybe, you know, we fund the pension $300 million or $400 million. There's a lot to be worked out, and so I can't give you a good answer. But, you know, it's a voluntary contribution, not a mandatory or required contribution. Great. That's it. Thank you very much. Thank you, Paul. Our next question is from the line of Gregg Orrill with UBS. Please just use your questions. Yeah. Thank you. I was wondering how you're thinking about the 50 basis point RTO adder. I know you've disclosed sort of your sensitivities to that. You know, in sort of the downside scenario, how does that affect your thoughts around earnings guidance? I don't think it's gonna have a material impact on earnings guidance, Greg. You know, I think we've been fairly clear that, you know, on the sensitivity that we do have for it will not materially throw us off track in terms of achieving our goals. We also continue to believe that the adder is appropriate, and it's helpful for us as we continue to build out and improve transmission reliability for our system and our five-state footprint, and that's where we stand on it. Got it. Thank you. Sure. Thank you. Thank you. There are no further questions at this time. I would like to turn the floor over to Mr. Strah for closing remarks. Well, thank you very much, and thanks for your ongoing support and attention today. I did wanna just take a brief moment and wish everyone a very happy Earth Day, which is today, actually. At FirstEnergy, we're really proud of our commitment to the environment. This week we stated a goal in which we're gonna plant 20,000 trees throughout our service territory. It's just one of a number of different initiatives organized by our green teams, which are employee volunteers who support environmental initiatives in a full range of items from planting trees to beach cleanups to recycling. I'm just very, very proud of our employees that are engaged in such an important activity for us, and I just wanted to acknowledge and thank them for that today. With that, I'll call a close to the call. Thank you for your continued attention and support, and we'll be talking to you soon. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.