PNM Resources, Inc. (PNM) Q4 2022 Earnings Call Transcript

PNM Resources, Inc. (NYSE:PNM) Q4 2022 Earnings Conference Call February 24, 2023 11:00 AM ET

Company Participants

Lisa Goodman - Executive Director of IR

Pat Vincent-Collawn - Chairman & CEO

Don Tarry - President & COO

Lisa Eden - SVP & CFO

Conference Call Participants

Paul Zimbardo - Bank of America

Ryan Levine - Citi

Jonathan Reeder - Wells Fargo

Anthony Crowdell - Mizuho

Tim Winter - Gabelli Funds

Operator

Good greeting and invited to nan PNM Resources Fourth Quarter 2022 Conference Call. All participants will beryllium successful a listen-only mode. [Operator Instructions] After today’s presentation, location will beryllium an opportunity to inquire questions. [Operator Instructions] Please statement that this arena is being recorded.

I would now for illustration to move nan convention complete to Lisa Goodman, Executive Director of Investor Relations. Please spell ahead.

Lisa Goodman

Thank you, Joe and convey you everyone for joining america this greeting for nan PNM Resources 4th fourth and 2022 net call. Please statement that nan position for this convention telephone and different supporting documents are disposable connected our website astatine pnmresources.com. Joining maine coming are PNM Resources' Chairman and CEO, Pat Vincent-Collawn; President and Chief Operating Officer; Don Tarry; and Senior Vice President and Chief Financial Officer, and Treasurer, Lisa Eden.

Before I move nan telephone complete to Pat, I request to punctual you that immoderate of nan accusation provided this greeting should beryllium considered forward-looking statements pursuant to nan Private Securities Litigation Reform Act of 1995. We be aware you that each of nan forward-looking statements are based upon existent expectations and estimates and that PNM Resources assumes nary responsibility to update this information.

For a elaborate chat of factors affecting PNM Resources results, please mention to our existent and early yearly reports connected Form 10-K, quarterly reports connected Form 10-Q, arsenic good arsenic reports on Form 8-K revenge pinch SEC.

With that, I will move nan telephone complete to Pat.

Pat Vincent-Collawn

Thank you, Lisa. Good morning, everyone and convey you for joining america coming connected this beautiful mounting New Mexico Friday morning. Today is nan time we observe immoderate of our favourite people. It is World Bartender Day and I'm conscionable going to time off it astatine that. 2022 was a twelvemonth afloat of successes arsenic we stayed committed to moving guardant and executing connected our business plans aliases arsenic 1 mightiness opportunity taken attraction of business. Today, we will screen our year-end results for 2022 to supply an update connected our pending merger pinch AVANGRID, reappraisal operational highlights, and stock much specifications connected our net guidance for 2023.

On Slide 4. I'll commencement pinch our financial results. We vanished nan twelvemonth pinch ongoing net of $2.69 conscionable supra our expectations for nan year. For 2023, we are narrowing our guidance scope to $2.65 to $2.75. In December, our Board accrued nan communal dividend to $1.47 per stock connected an yearly basis. Lisa will locomotion done each of these numbers successful much detail.

Next, an update connected our pending merger. The lawsuit remains connected entreaty pinch nan New Mexico Supreme Court. Over nan past month, we person been pleased to spot nan committee station announcement of 3 closed sessions pinch nan lawsuit connected nan agenda. We do not yet person immoderate accusation available. In New Mexico, nan recently appointed committee took their seats successful January and we're confirmed by nan New Mexico Senate earlier this month. We person already seen their acquisition and expertise connected show and we are looking guardant to moving together to execute New Mexico's c free power future.

In December, PNM revenge its 2024 Rate Change arsenic planned. Our past lawsuit was revenge successful 2016 pinch a 2018 trial year. We deferred our plans to record earlier because it was not nan correct point to do during nan pandemic, and we stay committed to nan enactment retired agreements we made pinch our parties during nan merger negotiations. We moved guardant pinch backing needed infrastructure projects and now successful an situation of rising costs, we are capable to propose a 2024 measure effect of little than 1% partially because of our exit from nan San Juan Generating Station. Don will talk astir much specifications of nan lawsuit and nan schedule starring up to an expected determination earlier nan extremity of nan year.

In Texas, we made our first transmission costs of work filing for 2023 successful January, reflecting different beardown twelvemonth of investments successful Texas to support increasing customer demand. In a twelvemonth of proviso concatenation and labour challenges, our teams planned up and remained agile while expanding our strategy and interconnecting power retention systems, chemic plants, crypto mines and datacenters.

Before I move it complete to Don. I will screen our ESG highlights for nan year, connected Slide 5. The status of nan San Juan Generating Station is our apical biology accomplishment successful 2022. More than half of our assets portfolio is now c free pinch further renewable and retention resources slated for 2023. However, our accomplishment agelong acold beyond this plant. We proceed to adhd much electrical vehicles to our fleet, we proceed to activity to grow customer power ratio programs, collaborate pinch manufacture experts to reside beingness ambiance risks and partner pinch stakeholders to bring consciousness to biology concerns impacting our communities.

We developed a greenhouse state emissions inventory for Scope 1, 2 and 3 emissions to reside nan evolving disclosure needs of investors and different stakeholders. We besides implemented an biology justness geographic mapping and screening instrumentality to amended place and prioritize communities astir successful request of investments. We proceed to activity towards fostering a divers workforce typical of nan communities we serve. In 2022, our percent of minorities and women accrued to 53% and 28% respectively. Equity and inclusion are cardinal to building and sustaining diverseness astatine each levels of nan statement and we are continuously monitoring our attack for our desired results.

One of nan biggest priorities for our teams was to support nan labor astatine San Juan done nan works closure and to guarantee these squad members near pinch dignity, pridefulness and resources for their future. We've provided profession counseling and modulation training, use reviews and status planning. We are happy that astir 20% of these works labor are still moving for nan institution successful various roles. Ultimately, half nan labor successful nan past years of nan works person severance costs astatine astir 75% of those were besides status eligible. Through nan Energy Transition Act, we besides funded severance and occupation training for labor of nan associated ember mine.

It was a challenging twelvemonth successful nan labour marketplace and we took other steps to return attraction of our squad members and to guarantee that our teams person nan basal resources to proceed supporting customers. We besides turned our eyes toward nan early and created a statewide business conjugation to grow internship programs offered done our section colleges. We already person immoderate of these interns joining nan institution afloat clip aliases continuing their internships successful 2023. These are students who admit nan challenges and opportunities created by nan modulation to cleanable power successful New Mexico and they want to beryllium a portion of our solution.

At nan aforesaid time, we proceed to grow upon our acquisition support for nan autochthonal American organization successful nan state, backing and endowment circumstantial to Pueblo students looking to proceed their acquisition astatine nan adjacent level. Both of these programs service to fortify New Mexico, those early workforce and past besides supply a caller position and lend to nan diverseness of thought. We cognize that nan early challenges successful our manufacture will require caller ways of reasoning and look guardant to what these students tin contribute.

With that, I will move it complete to Don.

Don Tarry

Thank you, Pat, and bully morning, everyone. I'll commencement connected Slide 7 pinch our load maturation by work area, pinch PNM first. Load grew astatine 2.9% successful nan 4th fourth compared to nan anterior twelvemonth pinch maturation coming from each customer classes. For astir of 2022, we saw residential and commercialized load maturation supra our expectations, while business customer description s were delayed by proviso concatenation and related marketplace issues. We expect nan maturation we saw successful nan 4th fourth to proceed into 2023 betwixt 2% and 3%. We're still seeing nan results of New Mexico's economical improvement efforts done our customer description s. We besides spot authorities and tribal projects that are little impacted by market-wide economics.

At TNMP load maturation successful 2022 exceeded expectations for some volumetric and request based load positive nan added maturation from crypto mining customers entering nan market. These customers are mostly successful our West Texas work territory providing immoderate economical diverseness to nan region. Our operations successful North Central Texas and nan Gulf Coast, provides beardown geographic and economical diverseness to TNMP, and each of those areas support a operation of business operations and increasing residential and commercialized communities surrounding nan adjacent larger cities. For 2023, volumetric maturation is expected astatine 2% to 3% accordant pinch nan full-year results of 2022. Demand based maturation is expected astatine 3.5% to 4.5% supra nan 2022 levels.

Now turning to Slide 8. I'll screen nan ways we've been taking attraction of business astatine PNM and making advancement connected our strategical objectives. The translator of our procreation portfolio has been beforehand and center. We person plans to exit ember and scope c free energy by 2040 5 years up of nan New Mexico mandate. The closure of San Juan Generating Station this twelvemonth was a important measurement successful achieving these goals, reducing nan magnitude of ember successful our portfolio and advancing america to 55% c free capacity. Our adjacent large measurement is exit of our ownership liking successful Four Corners Power Plant and wholly destruct ember procreation from our portfolio, which we are still pursuing for nan extremity of 2024.

As you tin spot successful nan pastry charts, we are replacing these resources pinch renewable and batteries retention aft moving done nan 2022 delays for PPA developers, we expect 350 megawatts of star and 170 megawatts of artillery retention coming online successful 2023. At that point, complete half of our assets portfolio will beryllium renewables and storage. And pinch our continued ownership of Palo Verde, we will deed 61% c free capacity. These changes supply important benefits for nan situation and our communities and besides financial benefits for customers, which I'll screen successful a minute.

Another cardinal to successful modulation towards a c free portfolio is T&D infrastructure. Investments successful our grid supply nan instauration for serving nan increasing request connected PNM strategy and maintaining reliability. The highest request connected our strategy has been increasing astatine a faster complaint than our full load and we deed a caller strategy highest successful 2022, our first since 2013. Our attraction has been connected strengthening nan infrastructure that straight serves customers, substations successful lines are being reconfigured to accommodate caller customers on pinch customer owned resources. We are building nan strategy to beryllium much resilient and trim outage restoration time.

Other T&D investments astatine PNM subordinate to grid modernization projects. We revenge our broad grid modernization scheme to instrumentality smart meters and different projects that will laic nan groundwork for early improvements and supply our customers pinch much resilient grid. When we look ahead, we spot nan request for description of our system, our alteration successful procreation resources, intends that transmission capacity tied to existing plants tin beryllium utilized for nan replacement options. But arsenic nan assets needs turn beyond these replacements, caller transmission capacity will beryllium needed to facilitate further resources crossed nan state.

Now turning to Slide 9. I'll locomotion you done nan cardinal regulatory proceedings tied to these investments. As Pat mentioned, successful December, we revenge our first PNM complaint reappraisal successful six years. PNM customers already use from having little bills and overmuch of nan state and we worked to equilibrium nan request for investments successful our strategy pinch nan impacts connected customers, The Energy Transition Act was designed to facilitate nan modulation to cleanable power while reducing costs to customers and this complaint filing showed that it is moving arsenic intended. The filing successful -- nan filing is simply a 2024 early trial year, truthful it rolls guardant our complaint guidelines for nan afloat six years and incorporates existent costs trends.

The status of San Juan and nan return of nan Palo Verde leases reduces nan requested betterment successful guidelines rates and besides reduces nan costs recovered done our substance cost, arsenic replacement resources travel online. Securitization provides for little financing costs arsenic we make this modulation each successful nan projected measure effect successful 2024 is constricted to 0.9% aliases $0.75 per period for nan mean residential customer.

The procedural schedule successful this lawsuit calls for intervener testimony, seller colony filing by May 12 and hearings scheduled successful June. The schedule for our grid modernization filing includes hearings scheduled successful March. Remember that we person asked for support of our task scheme by July 1 of this year, but we delayed our requested implementation day of nan complaint rider until September 1, truthful that it would not beryllium added to summertime bills this summer, erstwhile nan usage is typically higher.

We besides prioritized debased income customers and communities successful our filing, these are nan customers astir successful request of devices to negociate their usage and bills and it besides makes consciousness to bring improvements to these areas first. Also successful March, nan New Mexico Supreme Court has scheduled oral arguments and our projected exit from Four Corners Power Plant successful December of 2021, nan committee rejected our filing to exit our ownership stock of nan works and securitize our undepreciated investments. The briefing schedule was completed successful 2022 and we are looking guardant to nan oral arguments for further opportunities to coming our case.

Now turning our attraction to TNMP connected Slide 10. Our attraction has been to support finance levels to support up pinch nan gait of growth. The complaint guidelines doubled complete nan people of 5 years pinch different beardown twelvemonth of investments planned for 2023. The needs scope from serving caller residential subdivision to connecting caller chemic plants. The regulatory situation successful Texas continues to support these finance levels. We person made usage of semiannual transmission betterment filings on pinch yearly distribution betterment filings.

In January, we made our first transmission filing for 2023 requesting complete 150 cardinal of task cleared by December of past year, We would expect to betterment to beryllium approved and implemented by March of this year.

With that I will move it complete to Lisa to screen nan numbers successful much depth.

Lisa Eden

Thank you, Don, and bully morning, everyone. I'll commencement connected Slide 12, pinch a summary of nan changes successful 2022 net compared to 2021. Earnings per stock grew $2.45 successful 2021 to $2.69 successful 2022, arsenic we person besides been taking attraction of business connected nan financial side. The cardinal drivers are accordant pinch nan items we've discussed passim nan year. Usage was up astatine some PNM and TNMP owed to some load maturation and weather, peculiarly arsenic TNMP arsenic crypto rate mining participate nan marketplace successful West Texas.

Recovery of investments done nan TCOS and DCOS system was besides important accrued nan EPS astatine TNMP. At PNM higher transmission request and marketplace prices accrued net on pinch nan summation of nan Western Spirit contract. These increases served to offset expenses astatine nan utilities for depreciation, spot taxation and liking associated pinch our complaint guidelines investments on pinch increases to our planned O&M spending.

Market losses connected our decommissioning spot dampened our net astatine -- net maturation astatine PNM. We took actions successful 2022 pinch money managers to guarantee alignment pinch our portfolio objectives. To beryllium clear, nan decommissioning spot on pinch our pension plans stay good funded, contempt nan challenging marketplace conditions successful 2022 and we don't expect making immoderate rate contributions to these spot successful nan adjacent future. Earnings astatine our firm conception are driven by nan full -- by holding institution indebtedness and successful 2022 higher liking rates reduced EPS.

Turning to Slide 13. I'll screen our expectations and cardinal drivers for 2023 guidance. As Pat mentioned, we person narrowed our guidance scope to $2.65 to $2.75 per share. Given nan maturation we've seen successful Texas and New Mexico successful 2022, we brought up nan bottommost extremity of nan scope to $2.65. In position of our load, our guidance assumes a return to much normal upwind conditions, which is partially offset by load maturation astatine some PNM and TNMP.

At PNM costs reductions from nan status of nan San Juan Generating Station and return of nan Palo Verde leases, nett of replacement powerfulness costs offsets depreciation, spot taxation and liking expenses associated pinch caller investments. At TNMP, complaint betterment done nan TCOS and DCOS riders screen costs increases associated pinch caller investments arsenic we proceed to grow our strategy for expanding request and economical growth.

At PNM, we don't expect nan realized marketplace losses connected our decommissioning and reclamation spot to repetition successful 2023. And astatine corporate, we person assumed higher liking disbursal to bespeak nan existent liking complaint environment, including $850 cardinal of swaps we entered into past twelvemonth to mitigate our vulnerability until we trim our adaptable indebtedness levels, either done successful merger aliases putting much imperishable financing successful place.

We proceed to presume we adhd up to $200 cardinal of equity successful 2023, which would person a dilution effect connected EPS astatine each of our segments, shown successful nan appendix slides. Our afloat guidance scope accounts for various timing assumptions pinch nan imaginable effect of up to $0.08 for nan year, translating into a $0.04 effect to nan guidance midpoint.

Slide 14 shows our continued plans for superior spending done 2025 and nan associated complaint guidelines growth. This finance scheme continues to beryllium focused connected T&D infrastructure and gathering nan increasing needs of customers crossed New Mexico and Texas and includes our projected grid modernization scheme astatine PNM. Rate guidelines maturation astatine 8% from 2020 to 2025 pinch beardown maturation coming from some PNM FERC and TNMP.

At PNM, investments and infrastructure support unit customer maturation and switch nan complaint guidelines that is removed arsenic we modulation retired of coal. We've been capable to defer complaint increases for our customers, while continuing to gain our authorized returns. FERC investments person grown quickly pinch nan summation of nan Western Spirit task astatine nan extremity of 2021. Our different transmission investments are recovered timely done nan yearly look complaint update.

TNMP grows astatine 17% complete nan play arsenic infrastructure is added to support reliability successful our increasing work territory. The transmission and distribution riders supply timely betterment of these investments without nan wide complaint case. The specifications of our spending beyond 2025 will beryllium provided later this year, but we're comfortable we tin proceed our maturation target of 5%.

Slide 15, shows our maturation target and humanities achievements. The midpoint of our 2023 guidance achieves our erstwhile targets for maturation and reaches a 10 twelvemonth maturation complaint of 6.7%. We are connected way to meet our existent target of 5% maturation for 2020 done 2025. Growth isn't linear each twelvemonth because of factors for illustration weather, timing of regulatory filings aliases marketplace conditions, but we stay focused connected nan semipermanent view. Our 8% complaint guidelines maturation complete nan play is partially offset by nan assumed equity successful 2023 (ph). This maintains our finance people in installments metrics and places america successful a bully position moving guardant and we are assured successful our expertise to proceed targeting 5% growth.

I'll wrap up connected Slide 16 pinch our dividend. We look to turn dividend accordant pinch net targeting nan midpoint of 50% to 60% payout ratio. In December nan Board of Directors raised our yearly dividend to $1.47, a 5% -- 5.8% increase, pinch a payout ratio of 54% of our 2023 guidance midpoint. Our Board typically addresses nan yearly dividend successful December erstwhile finalizing our financial scheme for nan pursuing year. Meanwhile, we will proceed to salary dividends until nan adjacent of our merger.

With that, I'll move it backmost complete to Pat.

Pat Vincent-Collawn

Thank you, Lisa. Before I unfastened it up for questions, I would for illustration to convey our squad members successful New Mexico and Texas for nan awesome activity they did successful 2022 and proceed to do successful 2023 to return attraction of each other, our customers, our communities and nan environment.

With that, Joe. Let's unfastened it up for questions.

Question-and-Answer Session

Operator

We will now statesman nan question-and-answer session. [Operator Instructions] And our first mobility present will travel from Paul Zimbardo pinch Bank of America. Please spell ahead.

Paul Zimbardo

Hi. Good morning, team.

Pat Vincent-Collawn

Good morning, Paul.

Don Tarry

Good morning, Paul.

Lisa Goodman

Good morning.

Paul Zimbardo

Thank you all. The first one, I saw nan remark astir nan further equity perchance successful nan 2nd half of '23. Could you give, what was nan 2022 FFO to indebtedness and conscionable expectations location for 2023?

Pat Vincent-Collawn

Yeah, Paul. So we ever target betwixt 13 and 16% and, [Technical Difficulty] 2022 was conscionable astir 14%.

Paul Zimbardo

Okay. Great. And past secondarily, convey you for nan inheritance connected nan spot performance. I cognize you mentioned immoderate actions you took pinch nan money managers successful 2022, could you explicate what are nan assumptions that you embedded successful nan capacity for 2023. I deliberation it's for illustration a $0.15 to $0.19 improvement. I don't cognize if that's conscionable benignant of a reversal aliases you presume higher returns aliases immoderate benignant of mix?

Lisa Eden

Yeah, Paul. So we conscionable -- 2022 was really a bad year, we're 75% fixed income and 25% equity successful that NDT trust. So we don't expect nan aforesaid marketplace conditions successful 2022 going into 2023.

Paul Zimbardo

Okay. And correct maine if I’m wrong, I deliberation if it's conscionable benignant of level marketplace conditions. Wouldn't that conscionable beryllium like, unchanged year-over-year. I was conscionable confused astir nan improvement?

Lisa Eden

Yeah. So if you remember, regarding our NDT, truthful erstwhile we person realized gains aliases losses successful nan NDT Trust, it will travel done nan income connection and unrealized will not beryllium portion of nan ongoing. So arsenic a result, past twelvemonth we had a batch of realized losses because fixed income head successful peculiar changed their portfolio and truthful they realized losses during nan twelvemonth and we don't expect that successful adjacent year.

Paul Zimbardo

Okay. No, That's very helpful. Thank you. And past last, quickly, if I may. Do you person immoderate further liking complaint hedges for 2024?

Lisa Eden

No, we don't, Paul, but we do scheme to rumor for illustration we said before, up to $200 cardinal of equity. We're besides looking to do securitization astatine nan extremity of nan year. So our adaptable complaint indebtedness vulnerability will beryllium a batch different successful 2024.

Paul Zimbardo

Yes. Great. No. Thank you each very overmuch and person a bully weekend.

Lisa Eden

Thank you.

Pat Vincent-Collawn

Thank you.

Operator

Our adjacent mobility will travel from Ryan Levine pinch Citi. Please spell ahead.

Ryan Levine

Good morning. Just wanted to [Multiple Speakers] Good morning, everyone. Just had a wide mobility successful position of nan pending merger application. Wonder, what scenarios would you person to re-file nan exertion entirely?

Don Tarry

Ryan, correct now, it's pinch nan Supreme Court. I would statement that nan committee has had immoderate hearings -- successful backstage confidential hearings that we've noticed. We don't cognize nan specifications of those astatine this point. Not judge precisely what would trigger re-filing, so...

Ryan Levine

Okay. And immoderate colour astir dividend argumentation successful nan interim, pending -- pending this imaginable exertion being executed connected -- location immoderate ongoing conversations astir immoderate dividends changes?

Pat Vincent-Collawn

No, I deliberation arsenic Lisa said nan Board does nan dividend successful December. They conscionable accrued it past December. So they would not beryllium doing that again until December and truthful we expect nan merger would adjacent earlier then. So I wouldn't capable to -- this December.

Ryan Levine

Okay. Thanks for nan clarification.

Pat Vincent-Collawn

Okay. Thanks.

Don Tarry

Thanks, Ryan.

Operator

And our adjacent mobility comes from Jonathan Reeder pinch Wells Fargo. Please spell ahead.

Jonathan Reeder

Hey. Good morning. If you could conscionable grow a little, possibly connected nan past question, tin you conscionable talk your latest thoughts successful position of really nan merger support process perchance gets going again, connected what nan PRCs timeline to scope into last bid mightiness be? I cognize you conscionable benignant of indicated surely expect it earlier December and past do you request to first excavation nan entreaty of nan PRC's determination that's presently pending astatine nan Supreme Court, and if so, do you person plans to do that?

Pat Vincent-Collawn

Jonathan, correct now, we request to hold to spot what nan committee has done successful their sessions, if anything. And truthful correct now, we're going to holding pattern, looking guardant to proceeding astir their deliberations and immoderate outcomes and that will find what adjacent steps are.

Jonathan Reeder

So successful what shape are we going to perceive backmost from nan PRC, like, I mean are they required aliases scheduled to springiness america immoderate benignant of update like?

Pat Vincent-Collawn

No, I mean they person -- if you've listened to nan meetings, they person reported connected nan truth that they person had closed sessions and transportation complete nan pursuing matters and successful peculiar connected nan merger lawsuit that commissioner, excuse maine -- Chairman O'Connell has accused himself and they person deliberated connected that. So that is each we person heard, I would assume, astatine immoderate constituent successful clip they would study retired connected an unfastened meeting, but it is -- location is nary timetable for them to do that.

Jonathan Reeder

Okay. And past I conjecture really do you guys grip it from twelvemonth extremity pinch nan merger statement expiring present successful April, if you haven't heard thing from nan committee and you haven't pulled your appeal, for illustration what should we expect successful position of that?

Pat Vincent-Collawn

Yeah. The Board is going to see each nan merger and imaginable Merger Extension items successful owed people and not going to estimate now connected what happens successful that April timeframe.

Jonathan Reeder

Okay. And past I conjecture conscionable fixed nan transition of clip and everything, are location further concessions that mightiness request to beryllium made. Do you deliberation successful each nan anterior signatories to this colony are still connected committee pinch nan deal? Should we expect you to file, for illustration a caller colony statement that astatine slightest encapsulates nan commitments that AVANGRID made aft nan past colony was filed.

Pat Vincent-Collawn

I think, it's a mates of things, we person not heard that immoderate of nan interveners are not connected board, we person not been actively talking to them astir this and commencement astir nan complaint lawsuit and grid mod. With them, and I'm going to estimate connected nan caller exertion until we perceive what nan committee has to say, I mean that, that's really what we request to perceive from -- what we request to perceive earlier we determine adjacent steps.

Jonathan Reeder

Okay. And past I conjecture from nan standalone maturation perspective. I guess, I was a small confused connected Slide 15, is nan 5% semipermanent maturation target is that disconnected nan midpoint of nan '23 guidance $2.70, for illustration a 5 twelvemonth target aliases are you conscionable benignant of reiterating nan 5% done 2025 disconnected nan 20 base?

Lisa Eden

So, Jonathan, we are very pleased pinch this slide, you tin spot 6.7% CAGR from 2013 to 2023 and what we person said is that we're comfortable pinch successful our maturation target of 5%. We group retired nan maturation target of 2022 to 2025 and we will supply specifications later successful nan year, but astatine this constituent we're comfortable pinch nan 5% growth.

Jonathan Reeder

But conscionable nan 5% maturation done 2025 aliases extending beyond there?

Lisa Eden

We are comfortable pinch 2020 to 2025 percent and past arsenic we look guardant 5% is, we are comfortable pinch that maturation target. And...

Pat Vincent-Collawn

And Jonathan, we person and if you look astatine our superior slide, we haven't updated our superior past 2025. So erstwhile we do that, if we extremity up doing that, past we would -- we would spell further connected those numbers, but correct now, 2025 is nan furthest we person for our projections.

Jonathan Reeder

Okay. And past past for me, expanding connected nan already to talk financing needs successful nan merger scenario. Can you talk a small much astir really you would reside nan $1 cardinal outstanding nether nan word loan. Is it conscionable semipermanent debt, a operation of indebtedness and equity beyond nan $200 cardinal already contemplated successful guidance aliases possibly do you return this strategy that seems to beryllium celebrated correct now and rumor convertible?

Lisa Eden

Yeah, Jonathan. So what we've said is that we will put imperishable financing successful place. We person talked astir our equity needs for this year. But beyond 2023, we haven't precisely specify what that's going to look like, but of people that will beryllium thing that we will do later successful nan year.

Jonathan Reeder

Okay. All right. Great. Thank you for taking my questions.

Lisa Eden

You're welcome.

Pat Vincent-Collawn

Thank you and person a awesome weekend

Operator

Our adjacent mobility will travel from Anthony Crowdell pinch Mizuho. Please spell ahead.

Anthony Crowdell

Hey. Good morning. Thanks for nan update connected National Bartender Day. I really admit it.

Pat Vincent-Collawn

You're welcome. Just extremity well, Anthony. I cognize you well.

Anthony Crowdell

Absolutely. I conscionable person 1 speedy 1 and I apologize if you've already addressed that it's connected Slide 13 benignant of wherever Jonathan was headed. You mentioned non-merger script perchance for $20 cardinal of equity. What if -- and possibly conscionable divided into galore hairs here, but what is nan mergers support process is still going connected by nan clip we get to extremity of '23, it -- would this institution is still do nan equity aliases that's equity needs only if nan woody was voted down and I -- I besides admit if you don't want to talk it because nan woody is still pending?

Pat Vincent-Collawn

Yeah. So we really can't reply that 1 correct now, because it requires a full bunch of discussions pinch nan Board and AVANGRID whether nan entreaty is still going on. So we will update you connected that 1 adjacent clip erstwhile we person immoderate much clarity.

Anthony Crowdell

Perfect. Thanks truthful much. I'll spell to nan Bartender now. Thanks.

Pat Vincent-Collawn

Okay.

Operator

[Operator Instructions] Our adjacent mobility present will travel from Tim Winter pinch Gabelli Funds. Please spell ahead.

Tim Winter

Good greeting and congrats connected a bully year.

Pat Vincent-Collawn

Thank you.

Don Tarry

Thanks, Tim.

Lisa Eden

Good morning, Tim.

Tim Winter

I was conscionable hoping for immoderate much explanation connected nan interplay of nan merger exertion betwixt nan Supreme Court and nan commission. So you request -- what I understand is you request to propulsion nan entreaty pinch nan Supreme Court to get nan committee moving connected your merger application. And past nan 2nd portion of that would be, what if nan committee remanded -- nan Supreme Court remanded it backmost to nan commission, let's conscionable opportunity today, what would beryllium nan adjacent process? And past yet pinch 1 commissioner refusing himself, do you request some of them to o.k. it, aliases really does that work?

Pat Vincent-Collawn

So I'll commencement pinch nan last. Yes, you request pinch 1 commissioner recruiting himself, you request 2 of nan two, if you get 1 connected 1 astatine nan tie-ins and it fails, truthful that's 1 thing. Next mobility is nan Supreme Court remanding it backmost today, they haven't helped arguments, they haven't briefed, they haven't done anything. So nan likelihood of that happening are Counsel is looking astatine maine none. So I shouldn't opportunity none, slim to none. But what we would request to do is, earlier nan see it again, it's now successful nan Supreme Court, we would person to inquire pinch nan committee for it to travel back, and nan Supreme Court would person to see that case, but we would request some parties aliases I should opportunity each parties to inquire for it backmost from nan court.

Tim Winter

Okay. So that wouldn't conscionable beryllium your determination it's -- it's much than that.

Pat Vincent-Collawn

Yeah. Correct. It is much than that.

Tim Winter

Okay. And do you person immoderate -- immoderate thoughts connected extending nan merger statement aliases really agelong this is going to play out?

Pat Vincent-Collawn

No, Tim. We're conscionable going to hold and for illustration I said that nan Board will see everything successful owed course. And there's really nary logic for them to deliberation astir it now because it's only successful February. So we'll spot what happens betwixt now and then, and they will determine then.

Tim Winter

Okay. Thank you.

Pat Vincent-Collawn

You're welcome.

Operator

This concludes our question-and-answer session. I'd for illustration to move nan convention backmost complete to Pat Vincent-Collawn for immoderate closing remarks.

Pat Vincent-Collawn

Thank you, Joe. And again, convey you each for joining america this morning. As I've said aggregate times, extremity your bartender good and please return a taxi home. Stay safe.

Operator

The convention has now concluded. Thank you very overmuch for attending today's presentation. You whitethorn now disconnect your lines.