Greetings, welcome to the FirstEnergy Corp second quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Irene Prezelj, Vice President, Investor Relations and Communications for FirstEnergy Corp. Thank you, Ms. Prezelj. You may begin. Thank you. Good morning, everyone, and welcome to FirstEnergy's second quarter 2023 earnings review. Leading our call today is Brian Tierney, our President and Chief Executive Officer, and John Taylor, our Senior Vice President and Chief Financial Officer. Our earnings release, presentation slides, and related financial information are available on our website at firstenergycorp.com. Today's discussion will include the use of non-GAAP financial measures and forward-looking statements. Factors that could cause our results to differ materially from these statements can be found in our SEC filings. The appendix of today's presentation includes supplemental information along with the reconciliation of non-GAAP financial measures. Now it's my pleasure to turn the call over to Brian. Thank you, Irene, and good morning, everyone. This is my first earnings call as President and CEO of FirstEnergy, following John Somerhalder, who did an outstanding job leading this company during a period of transition. I am thrilled to be here with you today and look forward to talking about our second quarter and year-to-date results, a dividend update, some discussion of why I came to FirstEnergy, learnings from key stakeholder engagement, and the outlook for FirstEnergy's future. Let's start with a quick look at the results we announced yesterday. We delivered second quarter GAAP earnings of $0.41 per share versus $0.33 per share last year. The company reported second quarter operating earnings of $0.47 per share at the upper end of our guidance range, versus $0.53 per share last year. Mild temperatures continued to affect our service territory, impacting earnings by $0.06 in the quarter. Cooling degree days were 40% below normal and 48% below last year. Pension, Signal Peak, and financing costs were negative in comparison to last year. Our results were favorably impacted by a strong focus on operating expenses and continued execution on a regulated capital investment program for the benefit of our customers. For the year-to-date period, we reported GAAP earnings of $0.92 per share versus $0.83 per share last year. Operating earnings for the period were $1.06 per share, compared to $1.12 for the first half of 2022. The impact of mild weather in the first half of the year reduced earnings by $0.18 per share compared to 2022, with heating degree days being 16% below last year and cooling degree days being 47% lower. The positive impacts of investments made for the benefit of our customers and operations and maintenance cost discipline partially offset the negative impact of pension and financing costs. Despite the impact of the mild weather, we're working hard to be disciplined about our cost structure and to have our investments reflected in rate base. As such, we are confident reaffirming our 2023 operating earnings guidance of $2.44-$2.64 per share. Last week, our board declared a dividend of $0.39 per share, which is payable September first. Subject to board approval, we expect to have one additional dividend payable this year. At that time, it's our expectation that we will be in a position to resume dividend growth in line with the new targeted payout ratio of 60%-70%, which the board approved earlier this year. This ratio is more in line with our peers and reflects our improved credit profile, as well as our commitment to enhancing value for investors. Many of you know that I recently returned to the electric industry. I decided to come to FirstEnergy because I thought the company had evolved from a business and cultural perspective to a point where my background and experience could help further that evolution and growth. I could not be more excited to be working with my colleagues to provide the service that is the lifeblood of modern living to our communities. The employees of FirstEnergy don't just view their service as a job; it is a vocation that they take very seriously. This vocation and the service we deliver are more important than ever. Electricity demand is growing through the electrification of sectors like transportation and home heating. On the supply side, requests for interconnection of distributed energy resources and renewables is putting more stress on the electricity grid. As a wires-only company in four states and a fully integrated company in one state, I can think of no other electric utility that is better positioned to enable the increased demand and facilitate the energy transition than FirstEnergy. Through several strategic transactions, including great execution of a $1.5 billion convertible senior note transaction in the second quarter, the board and the management team have strengthened the balance sheet to invest in our regulated businesses in our service territories. This will lead to better customer reliability, system resiliency, and higher growth for the company. In the time before I arrived, the new board and management had done a commendable job of taking responsibility for and putting the activities of the past few years in the rearview mirror. On July 20th, the company filed the second of three planned updates to the Department of Justice on the company's deferred prosecution agreement. It was a very positive report detailing the progress the company has made on people, processes, and training to preclude such activities from happening again. We continue to cooperate with the department on any and all requests they make to us. During the quarter, the company received a subpoena from the Ohio Organized Crime Investigations Commission related to matters already detailed in the deferred prosecution agreement. We have cooperated with the commission and will continue to do so. Over the past 60 days, I have had the opportunity to meet with key company stakeholders. I have listened and learned a lot about where the company is in its evolution and some of the key elements required for future success. I've had many town hall, in-person, and virtual meetings with employees and union leadership. We've estimated that I've been able to reach about half of our 12,000 employees so far. This is a very engaged and dedicated workforce. Employees are asking for resources to better serve our customers. I have committed to them that we will invest in our system and them by making sure that we have the right complement of employees with the right training and the right equipment to serve our customers. These employees were not distracted by the events of the past few years and remain focused on safety and our customers. They will lead us into the future with their hard work, skill, and determination. Their commitment was on display again this weekend as our employees worked to restore power to customers impacted by the recent storms. I've had the opportunity to meet with three of our five commissions and two of our state governors. In talking with them, I committed that the company will take responsibility for the actions of the past when those dockets come before them. I also expressed our desire to engage constructively in normal course of business with the commissions for the benefit of our customers. Each of the commissions I spoke with want FirstEnergy to keep up with the normal day-to-day business of investing in our utilities and serving our customers. I have not detected any regulatory overhang associated with the past that would impact our forward-facing activities before the commissions. This is really important because we have a full regulatory schedule that John will take you through in detail. Camilo Serna and his regulatory team are engaged in base rate cases in Maryland, New Jersey, and West Virginia that represent about $7 billion in rate base with returns that need to be updated. We have important ESP V and Grid Mod II filings in Ohio and the consolidation case in Pennsylvania. We anticipate base rate filings in Ohio and Pennsylvania next year, with current combined rate bases of about $10.5 billion, with returns that also need to be updated. We've spent a lot of time together as a management team and with the board discussing how to best organize the company to reach our goals quickly and sustainably. There are key roles that need to be filled. In July, we added two key hires, Abigail Phillips as Chief Risk Officer and Amanda Mertens Campbell, our Vice President of External Affairs. These are experienced professionals who have hit the ground running and are already making an impact. We are currently looking to fill our Chief Operating Officer role. We have attracted well-known, industry-leading candidates and hope to be able to make announcements in the near future. Over the past two years, FirstEnergy has consolidated key functions like engineering, HR, workforce development, and others. These actions led to efficiencies and consistency in standards. At the same time, there is a sense that certain decision-making would be better if it were closer to the customer and to the employees providing the service. We are looking at ways to make that happen, and we'll be updating you on this in the months to come. I spent considerable amount of time with investors talking about our plans for organic investment and growth. These discussions have focused on the investment needed in our electric grid, management additions we plan to make, and the regulatory schedule necessary to convert investment into growth. I've had the opportunity to meet with three of the major rating agencies. I've committed to further optimizing our financing plan and improving our credit metrics and balance sheet. This included paying down short-term borrowings and repurchasing high-coupon debt in the open market with the proceeds of the convertible bond offering from earlier in the quarter. We anticipate FFO to debt being in the 14% to 15% range by 2025. Following meetings with these and other stakeholders, I have not found any surprises relative to what I knew coming into the company. What I have found are some key indicators for success: a skilled, engaged, and dedicated workforce, a constructive regulatory environment focused on customer affordability and reliability, a system in need of investment for reliability, resiliency, and to support the energy transition, and finally, a strengthened balance sheet to be able to make that investment and to support organic growth. I believe in this company's strategy of making necessary investments to improve reliability, resiliency, and the customer experience. In addition to reaffirming the company's guidance for 2023, I am reaffirming our 6%-8% long-term growth rate off of the original midpoint of prior year's guidance. We have a strong platform to build upon. We are getting, and will continue to get, the right people in place to lead this company to sustainable growth. I am incredibly excited about this company and am thrilled to be here at the start of what I know will be a very bright future. With that, I will turn it over to John for more financial detail. Thank you, Brian. Good morning, everyone. Despite the extremely mild temperatures across our service territory in the second quarter, our focus on efficient operations and financial discipline allowed us to deliver operating results above the midpoint of our guidance. I'll start today with a review of our financial performance and outlook, then provide an update on recent regulatory activity. As Brian mentioned, second quarter GAAP earnings were $0.41 a share, and operating earnings were $0.47 a share. This compares to 2022 second quarter GAAP earnings of $0.33 a share and operating earnings of $0.53 a share. Second quarter results in our distribution business benefited from our ongoing capital investment programs and our laser focus on operating expenses. Together, these helped offset the impact of lower distribution sales, which largely resulted from mild temperatures, as well as a lower pension credit. Mild temperatures with cooling degree days 48% below the second quarter of 2022, impacted residential demand by more than 8% and total customer demand by 4%, with a year-over-year impact of $0.06 a share. Total residential sales decreased 11% from the second quarter of 2022, or 2% on a weather-adjusted basis. On a trailing 12-month basis, weather-adjusted residential sales continue to trend about 4% higher than 2019 pre-pandemic levels, and for the June year-to-date period, they are 2% higher than last year. In the commercial sector, lower weather-related demand drove a 6% decrease compared to the second quarter of 2022, while demand was down 3% on a weather-adjusted basis. Usage by commercial customers over the trailing 12-month period continues to trend below 2019 levels by nearly 5% on a weather-adjusted basis. Sales to industrial customers increased by just over 1% compared to the second quarter of 2022 and continue recovering toward pre-pandemic levels. As a reminder, revenue from our C&I customer classes are not as sensitive to sales volumes as a result of rate design for these classes, which is typically based off peak usage. In our transmission business, our results benefited from our Energizing the Future investment program and associated rate base growth of more than 8% compared to the second quarter of 2022. Favorable weather and accelerated material deliveries allowed us to deploy nearly $400 million of capital into our transmission investment program during the quarter, bringing our year-to-date investments to nearly $750 million, which is over 20% ahead of our internal plan, and $260 million, or more than 50% ahead of last year. Looking at our corporate segment, second quarter results benefited primarily from lower operating expenses and lower interest costs, which helped to offset a lower earnings contribution from Signal Peak. We are very pleased with how we responded to the challenges we faced this year, especially the impact of the extremely mild temperatures on distribution sales, which on a year-to-date basis is $0.18 per share below last year and $0.16 per share off plan. The team's effort allows us to confirm our guidance range this year of $2.44 to $2.64 a share. First, our focus on our cost structure, particularly our operating expenses, has been second to none. As you can see, our O&M has improved $0.13 a share year over year and is well ahead of our internal plan. Our focus on managing our labor costs through productivity improvements and selective hiring is paying off. In addition, in May, we announced an involuntary separation program and a voluntary early retirement program, impacting approximately 550 employees. We continue to focus on third-party and other operating costs, including corporate facility costs, branding and sponsorships, and improved customer collection rates, which has helped us lower our bad debt expense. Currently through June, our base O&M is running about 6% below plan and 11% below last year, and the expectation in the second half is for that trend to improve versus last year, given some of the steps we have taken to further reduce costs and the maintenance work we accelerated from 2023 into 2022. Second, in early May, we completed a very successful sale of $1.5 billion in convertible senior notes with a coupon rate of 4%. The initial conversion price represents a premium of approximately 20% from our closing share price on May 1st. We consider this a cost-effective bridge to when we receive the full $3.5 billion from our previously announced agreement to sell a 30% interest in FirstEnergy Transmission, LLC. The use of proceeds will be EPS accretive as we repaid high-cost, short-term borrowings, reduced 7 3/8 coupon debt at FE Corp, and made a $750 million contribution to our pension plan, which had required contributions beginning in 2025. As a result, our net qualified pension obligation improved to approximately $800 million at the end of the second quarter, down from $1.7 billion at the end of last year, representing a funded status of 91% at the end of June. In addition, we don't have any minimum funding requirements through 2027. The convertible note issuance supports our ongoing work to optimize our financing plan, improve our credit metrics, and our balance sheet as we target FFO to debt metrics of 14%-15%. Finally, we do anticipate a lower effective tax rate for the year, closer to 17%, resulting from the expected use of state net operating loss carryforwards. Again, despite the extremely mild temperatures we've seen this year, the team has worked extremely hard to rise to the challenges so we can deliver on our commitments. Now let's shift gears and talk about our rate proceedings and other regulatory activity in the quarter. I'll start with the three base rate cases we filed earlier this year. These cases, which represent over $7 billion of rate base and weighted average test year return on equity of less than 6%, are progressing well through the regulatory process and consistent with our expectations. In New Jersey, we received a procedural schedule for our proposed revenue increase of $193 million, with evidentiary hearings to be held in early January of next year. In Maryland, very constructive evidentiary hearings were held last month on our proposed $50 million rate case, which was filed in March and supports equity returns of 10.6%. We do expect new rates to go into effect in October of this year. In West Virginia, our Mon Power and Potomac Edison West Virginia utilities filed a base rate case in May, requesting a $207 million increase in revenue to support reliability investments, grid resiliency, our generation assets, and an enhanced customer experience while providing assistance to low-income customers. Key proposals in the filing include distribution rate base of $3.2 billion and return on equity of 10.85%. A hearing has been set for January of next year, and new rates are expected to be effective by the end of March. Importantly, even with the proposed rate adjustments in each of these jurisdictions, our customers would continue to have some of the lowest residential rates among their in-state peers. Other regulatory activity also continues to progress. We filed our Ohio Electric Security Plan V in early April. As we discussed on our 1st quarter call, our proposal supports our generation procurement process for non-shopping customers, continued support for investments in the distribution system, storm and vegetation management riders, and energy efficiency programs. Our filing also includes proposals that support low-income customers and electric vehicle incentives. We have requested approval for the new ESP, effective June 1st of next year, when the ESP IV ends, and hearings are scheduled for November of this year. We also received a procedural schedule last month for the Ohio Grid Mod II filing we made last summer. Under the schedule, hearings are planned for October of this year, and we look forward to advancing the $626 million capital investment plan to continue our work enhancing the delivery of safe, reliable power, offering modern customer experiences, and supporting emerging technologies. In Pennsylvania, hearings have been set for next week to consider our application to consolidate our four Pennsylvania distribution utilities. As we stated, this is an important step to align with our state operating model, simplify our legal entity structure, and increase the flexibility and efficiency of our financing strategy. We are in settlement discussions with the parties to the case. In May, FirstEnergy and Brookfield submitted applications to FERC and to the Pennsylvania PUC to facilitate the FET minority interest sale that was announced in February. We have received approval for the sale from the Virginia State Corporation Commission, and the transaction also requires successful review by CFIUS. Finally, Mon Power is no longer reviewing the possible purchase of the Pleasants Power Station. Last week, FERC approved the sale of the plant to a subsidiary of Omnis Fuel Technologies. We will file an update with the Public Service Commission of West Virginia when that sale is complete. All in all, several regulatory proceedings in flight, but everything is progressing very well and consistent with our plan. The regulatory team and the employees that support the regulatory filings are doing a terrific job, and we couldn't be happier with the progress. As a reminder, you can find summaries of our key filings, together with news releases and links to the dockets, on the Regulatory Corner section of the IR website. I'm very proud of our team's performance despite the challenges we have faced this year. We are on track with key regulatory initiatives, and we're executing very well in the areas that we control, with strong capital deployment and financial discipline with our operating expenses. Thank you for your time today. Now let's open the call to your questions. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would 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 poll for questions. Thank you. Our first question comes from the line of Jeremy Tonet with JP Morgan. Please proceed with your question. Hi, good morning. Good morning, Jeremy. Just want to start off, I guess, if we're looking through the 10-Q a little bit here, noticed this OOCIC subpoena and was wondering if you might be able to provide a bit more detail on what, what that entails, and could that impact the DPA in any way? We don't think it will impact the DPA in any way. We. ... you know, everything in the DPA was laid out. The company accepted responsibility for the activities that happened in the DPA. The OOCIC seems to be asking questions around what was detailed in the DPA and that the company's taken responsibility for. Other than that, we really can't offer any color other than to say that we're cooperating with their subpoenas, and we'll continue to do so. Got it. That's helpful. Thanks. Just with regards to Signal Peak, I was just wondering if you could provide any updated thoughts as far as, you know, asset earnings profile and I guess, you know, how core that asset is or any other details you could share there? Hey, Jeremy Tonet, this is K. John Taylor. You know, obviously, you know, Signal Peak is not an asset that necessarily fits in with our, you know, regulated strategy. It is something that we look at from time to time to determine if there's a market where we could monetize that asset. It has been tough, but we continue to look at that, you know, from time to time. Commodity prices have come down since the beginning of the year, but we've factored that into our plan going forward. Got it. Any updated thoughts on what% of earnings that might look like in the future, given what you described there? Yeah, I think it'll continue to be less than 10% of the earnings of the company going forward. It's going to come down, you know, on a relative basis as well as a absolute basis, and we factor that into, into the plan going forward. Got it. That's very helpful. One last one, if I could. Brian, it seems like you, you've, undertaken a number of new strategic initiatives and, it seems like some geographic decentralization efforts and overall, I'm just wondering: How significant do you think the synergies could be over time, you know, with some of the strategic measures that you have undertaken at this point? I think a couple of things, Jeremy. I think the consolidation that the company did around certain functions, HR, engineering, workforce, development, and the like, that's where we get real synergies from. I think we're going to get better decision-making, pushing the decision-making closer to the customers and employees, because an executive running that particular entity will have the best insight into what the commissions want, what the customers want, and what the employees need to do their jobs. I think that decision-making can happen much closer to where the activity is happening, rather than a lot of that decision-making happening here in Akron. I've seen that model work before at various other companies, and I think, we'll benefit from that going forward. Got it. That makes sense. Very helpful. I'll leave it there. Thanks. Thanks, Jeremy. Thank you. Our next question is from Mr. Steve Fleishman with Wolfe Research. Please proceed with your question. Thanks, appreciate it. Don't get called Mister that much anymore, so good morning. Congrats, Brian, on your first call. Good morning, Mr. Fleishman. Thanks. I guess, just, in your intro, you mentioned reaching out and seeing a lot of various constituents, including kind of regulators and the like. I'm just given the history in Ohio, I'm guess, most curious your perception of any discussions there, regulators, political, employee base, et cetera, any color, specifically in Ohio? Yeah, so I've reached out to the commission there and employees. I've not had a chance to speak with the executives in the state yet, but are still trying to get those scheduled. I'll say that the commission there is, and always has been very professional, engaged, experienced, and dedicated to making sure that utilities make the investments that improve reliability and the customer experience in the state. That, Steve, really hasn't stopped over the last three years, right? We're concluding Grid Mod I, we're concluding the ESP IV right now. Ohio, over time, has been very effective in making sure that there are those riders and trackers in place to make the specific investments that the commission wants us to make. When I met with the commissioners there, they seemed very focused on making sure that we continue to engage in those activities, those processes, and those investments going forward. Like I have with, with everyone I met with, that there will be a time and a place to deal with the activities of the past, and people have documents ready to do that. I've committed that, like we have in other venues, that the company will take responsibility for that and, and do the right thing. But there's a real desire to make sure that we focus on the go-forward business, and there seems to be no regulatory hangover associated with the past, either in Ohio or in West Virginia, New Jersey, that I've also visited with. Okay. That's helpful. Then just you talked about, you know, kind of updating the ROEs in these cases. Is that, I mean, if you look at your data based on the way you kind of have it out there, you know, looks like you're under-earning pretty much in all these jurisdictions. Are you talking about kind of getting that basically, you know, kind of dealing with the under-earning situation? Yeah. Thanks, Steve, for exposing my coded language there. Yes, that's what we're, we're looking to do, is, is go to places where we are under-earning, either due to the fact that we haven't been in for a long time, or that we've made significant investment that hasn't been updated, and make sure that we get investment reflected in rate base, and that we ask for authorized ROEs that are more consistent with what you're seeing across the industry, rather than the lower ROEs that we're currently earning. Okay. Lastly, I think you mentioned meeting with the rating agencies, or maybe you or Jon could just update on any potential credit upgrades. Yeah. We've been to see all three of the rating agencies recently. You know, we've been on a watch for a change for Moody's for over 18 months now, have paid special attention there, trying to give them what they could need. We hope that they will take action here in the near future, in a positive way. As we look at S&P, I think they're looking for final resolution of the DPA, which will happen hopefully in 2024, as well as FFO to debt that are consistently moving above the 12% range, and we hope to be doing both of those here in the near future. Okay. Thank you. Thank you, Steve. Thank you. Our next question is from Mr. Shar Pourreza with Guggenheim Partners. Please proceed with your question. Hey, guys. Good morning. Good morning, Shar. Good morning. John, I wanted to just really just get a little bit deeper on Signal Peak, if it's okay with you. Sorry to beat a dead horse here, but, you know, the prices have declined another 30% since that Q1 update. As we're thinking about maybe oil prices, any hedging you may have in place or what hedges are off, I guess, how does all this tie in with the linearity of your 6%-8% growth rate? In other words, as we're thinking about 2023, 2024, is there enough levers like O&M and liability management to mitigate incremental Signal Peak pressures as we're thinking about your annual guidance in the area of that growth rate? Yeah. Yeah. Thanks, Shar. I mean, you're, you're right, the, the prices have declined somewhat over the course of the last year. I, I would tell you that in 2024 and 2025, we kind of had that baked into our plan to begin with. So on an absolute and relative basis, we had those earnings declining, somewhat to what we've seen historically, at least in the last couple of years. Then if you look at just where we're filing cases currently with over $7 billion of rate base under review, you know, probably earning a return of 6%, you're, you're really going to see strong regulated growth in the distribution businesses. We will have some O&M increases in 2024 relative to 2023, primarily because of some timing, but we're also doing a pretty nice job, you know, managing that. At least based on what I see today, we have clear line of sight into fairly linear growth going forward. Okay, perfect. That's a, that's an important point. Thank you for that. Obviously, you know, we're approaching the Ohio case next May, which is, I think, a very key event we're all going to monitor for obvious reasons. Just remind us on the drivers of the case, is it capital, is it rate base, deferred costs? How we should think about maybe that ROE request in relationship to what your earned ROEs are, especially if there's a chance the commission diverts from historical precedence on treatment of goodwill there. How do we put all this together into that case? How are you messaging or will message around rate impacts, or, or do you still think it'll be bill neutral? Thanks. Yeah. I would say a couple of things. Rate base, since the last case, has increased over 50%. Our cost of service has increased primarily because of some of the accounting changes associated with our vegetation management program, the A&G cost that we previously capitalized. We're projecting a return, an earned return when we file those cases somewhere in the 7%-7.5% next year, versus, you know, an allowed return in terms of what we're seeing in the state, 9.5%, 10%. You know, the capital structure, we think, will probably be closer to 50/50. Right now, if you look at the actual capital structure, it's probably closer to 55% equity, but we think it'll be more in line with what we have today, which is 49% equity. I mean, those are the key attributes of, of the case. We'll continue to refine those and give you a more fulsome update when we file in May of next year. Okay, perfect. Thanks, John, for that. That's super helpful. Brian, congrats on your first earnings call. See you, guys. Thank you, Shar. I appreciate it. Thank you. Our next question is from Mr. Julien Dumoulin-Smith with Bank of America. Please proceed with your question. Hey, good morning, team. Thanks for the time. Appreciate it. And congrats, Brian, again. Thanks, Julien. Good morning. Can you hear me? Yes, sir. Hey, good morning. Just following on, up on a couple items. Maybe, John, just starting with what you were saying, talking about a second ago, the increase in O&M that you were talking about going into next year, can you talk about how much of an offset you could be getting from the separations and headcount here? I, I know you put, you put some comments in the queue here on that front. Then related, obviously, you're, you're adding some headcount here at the C-suite and elsewhere. Just put some takes on that O&M increase. You talked about timing issues, but just delving into that a little bit more. Great question, Julien. Let me give you a little bit of context as to what we're seeing. When you think about the original plan that we had going into 2023, we had planned for about a 12% year-over-year O&M reduction relative to 2022, which was right at about $1.5 billion of base O&M. Okay? I would tell you about half of that was what I would consider timing or one-time, primarily associated with the work that we accelerated from 2023 into 2022 to help mitigate the pension. The other half was sustainable O&M reductions around productivity improvements, around lower branding and advertising costs, some efficiencies that we were getting to transition to more data and analytics to drive, you know, more efficiency in our operations. That was the original plan. Later on top of that, the impact of the voluntary and involuntary program, you know, we'll continue to see more sustainable savings going forward. I think what, what that will, what that will result in is about the only thing that you'll really see going into 2024 is that one time, which is about $100 million or so of incremental O&M that you'll see into the plan going into 2024. Everything else will be sustainable, sustainable and will be used to offset any type of inflation going forward. Really, what we're anticipating, you know, if you look at our current forecast this year versus 2022, we've gone from about 12% improvement to about a 15% improvement, with about half of that flowing back into next year. Got it. Excellent. Thank you so much, John Taylor, for your detailed response there. Then if I can to continue in the spirit of detail, how do you think about asking for higher authorized equity ratios, considering the desire to use the Brookfield proceeds, as you discussed, for equity growth investments? Then also consistent with the idea of higher equity ratios in the current and past rate case filings you've pursued already here. Yeah, yeah. Great question. I would tell you with the first FET transaction, plus the common equity issuance, we improved the capital structures in New Jersey, West Virginia, and Maryland by probably anywhere from 2 to 3 points. We were probably 49%, you know, 45%, and now we're close to 50%, if not above 50% in those jurisdictions where we have rate proceedings ongoing. If you think about the next FET transaction, which will close next year, about half of those proceeds have been deployed already through the convertible note offering. We put that money to the pension, we took out some holding company debt, and then we reduced short-term borrowings. With the other 50%, we'll look to improve the capital structures, primarily in Pennsylvania, which right now are about 49%, and we'll look to improve that to, you know, close to 53% as we gear up to file that case next year. Got it. Okay, excellent. 53. Wonderful. Really appreciate that, and best of luck, guys. Again, congrats, Brian. Thanks, Julien. Thank you. Our next question comes from the line of Ms. Angie Storozynski with Seaport Global. Please proceed with your question. Thank you. I appreciate the message. It's been decades, but thank you. First, on, on Moody's, have you spoken to the agency since you received the, the new subpoena? I'm just wondering if that has a chance of, anyway, derailing this, the, the upgrade that we've been waiting for. Yeah. We have spoken with them, as you'd expect, when we respond to a subpoena. The dialogue seems to be around the things that were associated with the DPA that we've already settled with the U.S. Department of Justice and taken responsibility for. Other than that, we're not aware of anything else and certainly don't expect any derailment of anything. Okay. And there's no news on the SEC investigation or any sort of settlements or any quantification of the potential downside here? No. They, you know, the, the initial subpoena came to us in September of 2020, and then each year since, they've updated their request for information, and that seems to be what's happened here at the end of May. No, we, we can't quantify what any fine might be there, but expect that there will be one ultimately. ... Okay, and then, and moving on to the equity layer in Ohio, and I know we've talked about it, before, the, the goodwill, you know, substantial goodwill and, and how you calculate your equity layer. I mean, is there any concern as you go into this, the distribution rate case about, you know, how the commission is going to calculate the, the equity layer in Ohio? I, I would just say a, a couple of things. You know, we have the, the, the riders today, DCR and the AMI rider, which deals with the grid mod work. All of those are based on the, the capital structure that we have for base rates or our actual capital structure. You know, we have precedent in the state of Ohio through the, the SEET proceedings as well as through other cases in the state that they don't remove goodwill and, and, and those types of calculations. We, we don't necessarily see it as a, as a concern, but it'll be, be something that we'll work through over the course of the case. Okay. Lastly, just looking at the performance of your pension funds, I'm just wondering, I'm assuming that the opposite is going to be true, meaning that there will be a potential gain that will support your 2024 earnings. If there is any O&M inflation, it will be more than offset by that potential gain and any efficiencies on the O&M side that you talked about earlier. Is that right? Well, I, I would just tell you through June, the asset performance was close to 8%, versus an expected return for the full year of 8%. The discount rate has come down slightly since year-end. We don't have in the plan, you know, growth from the pension, in 2024 and 2025, other than from the contribution that we made, which will be for the full year, in 2024 versus a partial year for, for 2023. Based on our plan, we're going to continue to drive, you know, O&M efficiencies through our FE Forward program, as well as other continuous improvement initiatives. We're not relying on the pension to drive growth for the company. Good. Thank you. Thank you, Angie. Thank you. Our next question comes from the line of Ms. Sophie Karp with KeyBanc Capital Markets. Please proceed with your question. Hi. Good morning. Thank you for taking my question. Good morning, Sophie. I just wanted to follow up on Ohio, could you provide a little more color on if there's any ROE discrepancy between different utilities in Ohio, between the three utilities you have there? Is 7.3 the average of the three? If there are discrepancies, then can you provide a little more color on what the range is? You were cutting out, Sophie, but I think your question was, we provided an ROE of 7.3% on a consolidated basis. Is there any disparity between that amongst the three utilities in the state? Yes. Yes. Yeah, I, I, I don't have that information here readily available, but I would imagine there would be some disparity between the three, you know, companies. I don't think it would be significant, significantly different from the 7.3%, but we, we would typically file in the state all three companies at the same time. So that's why we provide it at the, at the state level. Yeah, but when you file, do you think that there will be, I guess, a pathway for you to consolidate these utilities in this rate case, or are they too far apart in terms of the economics to attempt that? Yeah. I guess there's two steps to that, right? First, like we're doing in Pennsylvania, it's a legal entity consolidation. We're still going to have four separate rate books in Pennsylvania, and we'll merge those probably over a period of 2-3 rate cases, and we'll do the same thing in Pennsylvania. I mean, excuse me, Ohio. We'll make the filing to do the consolidation on a legal entity basis, but we'll still have, you know, three separate rate books, and we'll merge those over time. Got it. Okay. Just, lastly, a little bit of a housekeeping question. Could you just reiterate what's the level of FFO to debt that you had at the end of the quarter? What would that be, if you know, pro forma for the Brookfield transaction closing? Well, the pro forma for the Brookfield transaction closing, when we deploy all the proceeds, would support the 14%-15% that we're targeting. If you look at on a trailing 12-month basis, I'm assuming it's probably close to 10.5%. You know, we were at 10.5% at the end of last year. You know, as we, you know, start to receive the proceeds in next year, deploy those proceeds, you'll see a pretty significant improvement. We'll also have rate relief in New Jersey, West Virginia, Maryland, that will help the metrics going into next year. You know, right now, I would anticipate, you know, the, the plan with the pension contribution for the full year of 2022, you know, being close to 11%, you know, FFO to debt for this year. Excellent. Thank you so much. Thank you, Sophie. Thank you. Our next question comes from the line of Mr. Greg Orrill with UBS. Please proceed with your question. Yeah, thank you. Maybe a follow-up on the O&M, and just how you're thinking about that, you know, longer term throughout the plan, what levels can you achieve? You know, what areas can you look at to drive out those cuts or efficiencies? Thanks. Yeah, so like, like I mentioned earlier, I mean, you will see a little bit of an increase next year, just mainly because of the work that we accelerated from 23 into 22, as well as some other timing items. But I think as Brian and I have talked about the plan going forward, you know, continuous improvement initiatives are gonna be very important to the plan. And so that'll be, you know, something that we continue to stay focused on. Now, whether that, you know, is, is less than inflation or do we wanna drive out, you know, all the inflation and keep O&M flat, I mean, I think that'll depend on the facts and circumstances within the plan, and where we are. But, you know, we don't anticipate significant O&M growth, you know, once we get past 2024. Greg, we've, we've talked about this internally, right? I've seen utilities that are the premier utilities in the industry, have continuous improvement as part of their culture. We've had a program in FE Forward, which this year is beginning to pay significant dividends as employees are embracing the tools that we've given them to be able to do that. We're going to make that not a program, but part of our culture and DNA going forward, that we're not going to brand as FE Forward, we're just going to call it continuous improvement. Our goal will be to flatten or even decrease that O&M curve over time as part of an overall program that is continuous improvement, not just O&M savings. Okay, thank you. Thanks, Greg. Thank you. Our next question comes from the line of Mr. Paul Patterson with Glenrock Associates. Please proceed with your question. Hey, good morning. Good morning, Paul. Just on the subpoena, the timing just seems a little odd to me. From reading the 10-Q, it seems to me that you guys weren't aware of this investigation, and it just sort of the subpoena sort of shows up, I guess, so late in the day, it seems. Any thoughts about that, or? Yeah, other people might agree with your comment on the timing. By law, the OOCIC's investigations need to be kept confidential, so it's not a surprise to us that our first knowledge of it was the subpoena. Given the fact that it seems to be dealing with activities that have been dealt with, resolved, responsibility taken for, and paid for in the DPA, we just would have to leave it up to the OOCIC, what their interest in these matters are. Okay. I mean, you have any discussions where they're explaining it, or you can relate to us about what might be going on, I guess, with respect to them. Is that right, or? Yeah, no, just nothing other than us facilitating transfer of information that they're requesting, which is all related to the DPA activities. Okay, great. Then with respect to your discussions with regulators, around your service territories, I noticed that you guys have been involved or at least proposing, it seems to me, increased funding for low-income, you know, affordably, affordability challenged, ratepayers, if I'm correct. I'm just wondering, how is the regulatory reaction to that? Do they see that as going in a long way to sort of addressing the issue of, you know, rate concerns? Yeah, I'll just say we're trying to engage with our commissions constructively on that issue. All of them, as you might suppose, are very focused, given economic issues, given inflationary pressures on our customers, all of them are focused on affordability for our customers, we're trying to put our dollars to work to address those concerns as well. I think we're just trying to be constructive with our customers and commissions as we work through other rate matters that we have before them. Oh, absolutely. No, I, I, I understand that. I guess I'm not asking it right. I guess I'm wondering is, when you approach them with that proposals, are they receptive or, I mean, maybe it's too early to say or, or what have you. You know, sometimes the jurisdictions get more concerned about sort of the actual total sort of impact. In other jurisdictions, it seems like if you can sort of address the issue of those most, most at risk, I guess, of, of, of, adverse issues, that that seems to go a long way. Do you follow what I'm saying? Do we have any place on that? Yeah, I don't know if I'm missing or misunderstanding the questions. All of our commissions view it as being positive and constructive when we try to help in our rate proceedings, those who are most challenged to pay their bills. Okay. Sorry. I'm sorry, maybe I didn't hear correctly. I apologize. That's all right. Then finally, there's this Chevron doctrine that's, I guess, at the Supreme Court. It's kind of a significant issue, it seems like actually, just in, in terms of EPA for what have you. You know, I don't know what to sort of make of it, in terms of what the potential impact might be. I was wondering, do you guys have any sense about what, what a substantial change in this, this sort of long-held sort of regulatory approach to things might be if the, if the Supreme Court, as some might, are speculating, would be, would have a new, completely different take on it? Yeah. Paul, we'll dig into that, but I'll just say that's not been on the top of my list in my first 60 days here. Sure. I can imagine that. I'm just wondering if there's any, if there's any, if there's any, any thoughts that you guys have about it, but, but I can, I can understand if there's other stuff going on. Thanks so much. Okay. Thanks, Paul. Thank you. Our next question comes from the line of Mr. Paul Fremont with Ladenburg Thalmann. Please proceed with your question. Great. Thank you very much. With respect to the OOCIC, is there anything under, under the DPA that would prevent the state from taking actions for potential violations of state law covering the same ground that the federal DPA covered? Paul, we just feel like we've taken responsibility for the activities that are outlined in the DPA and and have paid the fine for that and taken responsibility for it. I, I really don't know the answer to your question. Okay. It's possible that they could just relitigate the same issues that were essentially resolved and litigated at the federal level? Yeah, that, that would be unusual. Okay. That, that's my only question. Thank you. Okay. Thanks, Paul. Thank you. There are no further questions at this time. I would like to turn the floor back over to Mr. Tierney for closing comment. Okay. We'd just like to thank everyone for their participation in today's call. We look forward to continuing this dialogue, going forward. Appreciate your interest and, and are pleased with the quarter, and, and, look forward to seeing you next time. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.