Good day, ladies and gentlemen, and welcome to today's Xcel Energy Year End 2022 Earnings Conference Call. For your information, today's conference is being recorded. Questions will be taken from institutional investors, reporters can contact media relations with inquiries and individual investors and others can reach out to Investor Relations. At this time, I’d like to turn the conference over to your host today, Mr. Paul Johnson, Vice President, Investor Relations and Treasurer. Please go ahead, sir.

Good morning, and welcome to Xcel Energy's 2022 fourth quarter earnings call. Joining me today are Bob Frenzel, Chairman, President and Chief Executive Officer; Brian Van Abel, Executive Vice President and Chief Financial Officer. In addition, we have other members of the management team in the room to answer questions if needed. This morning we will review our 2022 results and highlights and share recent business developments and regulatory developments. Slides that accompany today's call are available on our website. As a reminder, some of our comments during today's call may contain forward-looking information. Significant factors that could cause results to differ from those anticipated are described in our earnings release and our SEC filings. Today, we will also discuss certain metrics that are non-GAAP measures. Information on the comparable GAAP measures and reconciliations are included in our earnings release. I'll now turn the call over to Bob Frenzel.

Thanks Paul, and good morning, everyone, and welcome to our fourth quarter call. We had another very successful year at Xcel Energy, continuing to execute on our strategy while delivering strong financial and operational performance. For our investors, we delivered EPS of $3.17 representing the 18th consecutive year of meeting or exceeding our initial earnings guidance. In February, we raised our annual dividend for the 19th straight year increasing at $0.12 per share or 6.6%. More recently, in November, we extended our long-term investment plan which features a 10-year capital outlook with an approximate 7% rate base growth. We ranked in the top quartile in customer reliability or CAIDI and our residential electric builds are more than 20% below the national average. And amidst the backdrop of significant commodity increases this year, Xcel Energy's 4,500 megawatts of owned wind farms continue to be an industry-leader in net capacity factor performance, generated approximately $1 billion of fuel-related customer savings in 2022 and almost $3 billion since 2017. Our nuclear fleet remains the top performing fleet in the country and achieved a capacity factor of 96% last year. We had an active regulatory year and resolved multiple rate cases and Uri storm cost recovery proceedings. The commissions in Minnesota and Colorado approved resource plans that will add nearly 10,000 megawatts of utility scale renewables to our systems through this decade. The Minnesota Commission approved our 460 megawatt Sherco Solar project. The Colorado Commission approved our $2 billion Power Pathway transmission project and MISO awarded us $1.2 billion of transmission projects and we accelerated our timeline for transitioning out of coal and now expect to be coal free by the end of 2030, all of which contribute to our leadership in clean energy transition for our customers. We continue to lead in carbon reduction as well. In 2022, our estimated carbon emissions were approximately 52% below 2005 levels and we remain on track to achieve 80% carbon reduction across the company by 2030. The passage of the Inflation Reduction Act will reduce the cost of renewables for our customers, improves cash flow and credit metrics for the company and enhances the competitiveness of our renewable offerings. We continue to execute on our electric vehicle vision, implementing multiple new programs for our customers. We also filed comprehensive transportation plans in Minnesota and Wisconsin that are pending commission approval. We've advanced our ESG leadership and have been recognized by multiple entities, including an upgraded rating by MSCI from AA to AAA. And finally, we were named among the world's most ethical, admired and responsible companies and we're recognized for being the best veteran employer as well as for our disability inclusion in the workplace. I'm really proud to lead a team that can deliver on operational, financial, environmental and diversity goals, all simultaneously. Looking ahead, we're well-positioned for sustainable organic growth over the next decade, including affordable renewable additions in our resource plans, the transmission needed to enable those carbon-free resources and responsible community transitions as we retire our coal plants. We've recently issued a requests for proposals in Minnesota, Colorado and at SPS seeking approximately 6,000 megawatts of new renewable generation, a portion of the 10,000 megawatts that have been approved in our jurisdiction. We'll submit our recommended portfolios of generation assets to our commissions by the middle of this year and anticipate decisions in the second half of this year. We also expect to issue additional RFPs in Minnesota and Colorado this year and next year for the remainder of our approved needs. As we've discussed in the past, we believe that we have a geographical advantage in the clean energy transition due to the strong wind and solar resources in our service territory. This access to low cost renewable energy should also give us further advantage in developing green hydrogen and other clean fuel projects, which are becoming more feasible as a result of federal support from the Infrastructure and Jobs Act and the IRA. Late last year, we submitted hydrogen hub concept papers for both the Rocky Mountain and the Upper Midwest regions to the Department of Energy to compete for awards from the $8 billion hydrogen hub program. In December, we received favorable notice from the DOE for our concepts and we're encouraged to submit full applications in April. In addition, our pink hydrogen production pilot at our Prairie Island nuclear generating station is expected to be operational this year. Finally, we expect to bring forward opportunities this year to utilize clean fuels and green hydrogen blending at both our gas-fired generation stations and in our gas networks for Home and Building heating. As we continue to utilize innovative technologies to decarbonize our business, we are well-positioned to take advantage of potentially significant hydrogen capital investment opportunities in the future. As the penetration of renewable assets in our states increases, we're also interested in pursuing advanced storage opportunities to balance our electric system needs. Today, we're excited to announce a new partnership with Form Energy to develop two long-duration energy storage pilot projects. Form Energy's 100-hour battery technology could be a critical component to our decarbonization strategy providing the resiliency and reliability that we need on the system to support our significant renewable portfolio. We plan to deploy a 10 megawatt multi-day storage system at a retiring coal plant in both Minnesota and Colorado. These projects are expected to be online as early as 2025. And as we wrap up, I want to thank the thousands of employees who worked in below zero temperatures, and sustained high winds in several feet wet, heavy snow to keep the lights on and the houses warm during our recent winter storms. Your efforts exemplify our company values of connected, committed, trustworthy and safe. And I believe that our dedicated employees and partners are what distinguishes Xcel Energy with our customers. With that, I'll turn it over to Brian.

Thanks Bob. Good morning, all. We had another strong year recording earnings of $3.17 per share for 2022 compared with $2.96 per share in 2021. This represents EPS growth of 7.1%, slightly above our long-term growth rate target of 5% to 7%. The most significant earnings drivers for the year included the following; higher electric and natural gas margins increased earnings by $1.05 per share, primarily driven by regulatory outcomes and riders to recover capital investments. In addition, a lower effective tax rate increased earnings by $0.15 per share, but keep in mind, production tax credits lowered the ETR, PTCs are flowed back to customers through lower electric margin are largely earnings neutral. Offsetting these positive drivers were increased depreciation expense which reduced earnings by $0.40 per share reflecting our capital investment program, higher O&M expense which decreased earnings by $0.24 per share, higher interest expense and other taxes, primarily property taxes, decreased earnings by $0.23 per share and other items combined to reduce earnings by $0.12 per share. Turning to sales, our weather-adjusted electric sales increased by 1.8%, largely due to higher C&I sales driven by strong economic activity in our service territories. We anticipate a modest slowing of our sales with growth of 1% in 2023. Shifting to expense, O&M expenses increased $170 million for the year, driven by cost related to technology and customer programs, storms, vegetation management inflation and additional actions due to weather. We also invested in our employees to ensure we retained our top talent. While we expect inflationary pressures to remain, we continue to focus on our continuous improvement programs, which we expect to drive increased productivity and efficiency. As a result, we anticipate O&M expenses will decline approximately 2% in 2023. We’ve made progress on a number of regulatory proceedings. In the Minnesota Natural Gas rate case, the ALJ recommended the commission approve our settlement which reflects a rate increase of $21 million, an ROE of 9.57%, an equity ratio of 52.5%, a decoupling mechanism and a property tax tracker. We anticipate the commission decision later this year. In the Minnesota electric rate case, the commission accepted our proposal to reduce our request for MISO capacity revenue and established a tracker. Hearings were completed in December and we continue to meet with the parties to see if we can reach a constructive settlement. However, we have a strong case and are comfortable with a fully litigated outcome absent this settlement. We anticipate a commission decision later in 2023. In November of 2022, we filed an electric rate case in Colorado seeking a net increase of $262 million based on an ROE of 10.25%, an equity ratio of 55.7% in the 2023 forward test year. We anticipate a commission decision and implementation of final rates in the third quarter. We also filed a New Mexico electric rate case seeking a rate increase of $78 million based on an ROE of 10.75%, equity ratio of 54.7%, the forecast test year in the early retirement of the total coal plant. We anticipate a commission decision and implementation of final rates in the fourth quarter. As far as future filings, we plan to file our Texas rate case later in the quarter and Wisconsin in the second quarter. As we have discussed in the past, the Inflation Reduction Act provides significant customer benefits, key elements include the following; tax credit transferability will provide $1.8 billion of liquidity increasing cash flow and reducing equity needs. We've met with companies in our service territory and expect to enter into bilateral tax credit sale contracts later this year. Our FFO to debt metrics improved by 100 basis points during the forecast time period. The solar PTC and tax credit transferability improved the competitiveness of our renewable bids and we anticipate pricing will decline on solar projects by 25% to 40% and wind projects by 50% to 60% due to the new and extended tax credits, which is great for our customers as we embark on this clean energy transition. Finally, we don't anticipate any material impact from AMT as a result of makers' depreciation and existing tax credits on our balance sheet. We are reaffirming our 2023 earnings guidance range of $3.30 to $3.40 per share, which is consistent with our long-term EPS growth objective of 5% to 7%. We have updated our key assumptions to reflect actual year-end results which are detailed in our earnings release. With that, I'll wrap up with a quick summary. We had a strong operational and financial year in 2022. We delivered 2022 earnings within our guidance range, the 18th consecutive year and increased our dividend for the 19th consecutive year. We received approval of our resource plans in Colorado and Minnesota, which will result in approximately 10,000 megawatts of new renewables. The Inflation Reduction Act has passed a significant benefits for our customers in the company. We are reaffirming 2023 guidance, consistent with our long-term earnings growth rate. We remain confident we can continue to deliver long-term earnings and dividend growth within the upper half of our 5% to 7% objective range as we lead the clean energy transition and keep bills low for our customers. This concludes our prepared remarks. Operator, we will now take questions.

[Operator Instructions] First question is coming from Mr. Nick Campanella calling from Credit Suisse. Please go ahead. Your line is open, sir.

Hi, thanks for taking the question. So, I guess just on the O&M and the '23 guide that really stuck out to us and I heard some of your comments in the prepared remarks just talking about continuous improvement. Can you maybe just give us a little bit more on what levers you're pulling that's leading to that O&M reduction and is this -- we are more one-time in nature to '23 or sustainable through the plan? Thank you.

Hi, Nick. Yes, good question. And a couple -- let me make a couple of points on it. One is a little bit of a function of where actuals in 2022 ended up in terms of updating our 2023 O&M guidance, but we're really proud of the continuous improvement efforts that we've had underway and they've been underway for a long-time from 2014 to 2021, we kept O&M flat and that's something I'm really proud of our employees who are doing and there is a really good benefit to our customers. We did have inflationary pressures in 2022 but also took actions given the good weather year to reinvest in 2022 in the system and our employees. As I think about 2023, a couple of things. One is, now we're investing a lot in technology and how do we make us more efficient in our plants, we have some of the digital operations factory which is really using AI in our plants to move from more reactive, proactive maintenance. We're investing significantly in, call it, real time scheduling in other opportunities to use AI. We also are starting to get on a treadmill of shutting down our coal plants, we have a broader coal unit a year that will start to shut down which provides us with a tailwind as we think not only in '23 but through basically the end of this decade in terms of as we lead this clean energy transition. And then we also do see some abatement of, call it, the high diesel costs, we had a storm year that was above normal in 2022, for example, we had quintuple the number of storm days in December. So there are some things that happened in '22 that won't happen in '23 that should help us achieve it. So, a long answer, but a lot there to unpack and hopefully that helped provide some color on it.

Yes, that's great. Thank you so much. That's helpful. And on the Minnesota Electric case, it sounds like you're confident in taking this the full distance to an order. But I just wanted to be clear, is the settlement more unlikely at this point and how should we be thinking about that taking into consideration, where we are in the docket today?

Nick, it's Bob, thanks for the question. And as we said in the prepared remarks, we filed this case over a year-ago, we probably actively working with parties since the September timeframe and we've reduced our total initial ask dramatically through extension of asset lives through the MISO capacity revenues and for bringing down the actual sales that we experienced in the state. So we think that reduced revenue ask is really a tailwind for us in the case, there's probably some pretty decent -- recent decisions in Minnesota, you saw the Minnesota Power case the other day and our gas settlement that Brian mentioned in his prepared remarks are data points that we feel confident in taking this, as you say, all the way, but we're always open to engaging with all the parties and if there is an opportunity to move forward with a settlement, we would certainly think to do so.

Thank you very much, sir. We now go to David Arcaro calling from Morgan Stanley. Please go ahead.

Thanks so much for taking my questions. I was wondering if you might be able to give any preview of what we could expect from the Clean Heat Plan filing later this year in Colorado, whether there might be potential CapEx investments additions to the plan and what new technologies and opportunities that might be to invest there?

Hi, David, it's Bob. That's a great question. Look, we're excited about the Clean Heat Plan opportunity, it's really an opportunity for us I think to share and align our vision for a net zero future on the gas business with our commissions in a more formal way. I'm not certain that I would expect to see a significant amount of sort of new investment opportunities as part of that process, but really an opportunity to align on our multipronged strategy to decarbonize the gas business. As I think about it, we're working with upstream providers to reduce methane on the purchase gas that we buy for our customers. We're working on our own system, we have been for over the past decade in methane leak reduction, we've done a terrific job there, but there is always more to work to tighten up our own system and then we work on customer programs that encourage energy efficiency that encourage maybe fuel switching and beneficial electrification and then I think the big opportunity from an investment perspective is really the comments I made around clean fuel in my prepared remarks. We are working with multiple parties in the Colorado jurisdiction on a Rocky Mountain hydrogen hub, we think it's a really attractive project, a multistate MOU has been signed with several of the Western states and the governors and all the energy offices of those states are working together. So I think clean fuel's a real opportunity for us and for our customers to advance the clean energy transition and to help us realize a net zero future in the gas business.

Yes, David and I'd just add a couple of points there. One is, we don't have anything in our current five-year plan related to hydrogen investment opportunities. So to the point, if there's an opportunity to pull that forward and move faster on hydrogen, absolutely an upside opportunity as we think about it over the next five years. But also lot of, call it, industry discussion about natural gas commodity cost and the volatility we think longer-term now us owning renewables and creating green hydrogen blending it into the LDC creates more price certainty for our customers and takes that volatility out, so I think that's a longer-term opportunity and benefit as we think about how do we help our natural gas customers and improve the certainty of our overall bills.

And then just broadly, and I mentioned this in my prepared remarks was probably worth saying again, which is, we are benefited by the geography that we sit in having great access to low cost wind and low cost solar, not only should we be able to do this for our customers beneficially but you're looking at opportunity of making the Rocky Mountain region or the upper Midwest regions, energy exports centers where we're creating a product that can be broadly transmitted to the rest of the country whether that's electricity via wire or whether that's green hydrogen via pipe or trucking, we should be a destination for those installations which overtime should help economic development in our states and add to employment backlogs as well.

That's really helpful color. Thanks for that, lot of initiatives, it sounds like related to that program that you'll be rolling out. And then separately on the announcement with Form Energy and long-duration storage, it's nice to see that crystallizing here. I was wondering if you might have a sense for how much long-duration storage might make sense on your system over time? Is there a certain number of megawatts or a proportion relative to your generation fleet that might make sense. Wondering how you might see the scale up to the extent these initial projects are successful and make it through the regulatory process?

Yes, thanks, David. As we go through resource plans with each of our states, we find that we have increasing need for as we have higher penetration of renewals and increasing need for, what we'll call, dispatchable energy resources, and historically, those would have been combustion turbines maybe they are fired with a clean fuel like hydrogen or synthetic natural gas. Over time as long-duration storage might become more feasible and cost effective, you can see duration -- long-duration storage being a part of that solution, and I think if I were to add-up and I'm going to do this math on the fly, but we have several thousand megawatts in our resource plans for firm dispatchable generation. And if we had an asset, lithium-ion batteries are interesting and they have a utilization for our systems, but so do the long-duration storage. These are 20 megawatts projects, there's probably several hundreds in our resource plans that could be realizable within the next five to 10 years if the technology proves out.

Yes, and I would just add to that, we're really excited about this technology, shows that we're leading and really demonstrating that we're on the forefront of this clean energy transition and we've always talked about we know how to get to our 2030 goals of 80% plus carbon reduction and so this is really about taking that last 15% to 20% out of the sack and providing one of the solutions. So if you think about that and when you look at our resource mix in 2030, you can start to size what do we need to do beyond that in terms of storage capabilities that will be one of the solutions.

Thank you so much, sir. We now go to Jeremy Tonet from JPMorgan. Please go ahead.

Hi, good morning. It's actually Rich [indiscernible] on for Jeremy. Thank you for the time today. Maybe starting with changes to one of your drivers. I know we hit O&M already but just curious if you can parse the full range of what are effectively true-ups for '22 actuals versus new expectations for '23, are any of these changes you're putting in higher or lower within the guidance range at this point in time?

I'll just read up to start, right, we're still feeling our midpoint of the guidance range, early in the year is where we expect to be and in terms of specific changes, right, gas sales is up a little bit, but that's really a function of where we landed on the year-end and really gas sales for us 1% is less than $5 million in terms of a change. The increase in the rider revenue that's a function of we had a good wind in PTC year in 2022, so that's relatively earnings neutral, we do see a little bit of a benefit depreciation and interest expenses lower. Let's see the forecasted rates for 2023 are lower than in Q3. But overall, we look at it is relatively neutral as we think about the puts and takes and so we're now targeting midpoint of the guidance range and now looking-forward to having a discussion 12 months from now and our goal is to deliver for the 19th straight year.

Great, thanks for the color there. And then turning back to Colorado and a lot of their focus on the gas system planning side that you addressed this a little bit from the Clean Heat Plan perspective, but I'm curious for your higher level thoughts on how this might impact your electric operations in state as well?

Hi, Rich, it's Bob. Look, I did mentioned as part of our Clean Heat Plan in our long-term strategy for decarbonizing on behalf of our customers that we do expect some amount of beneficial electrification to happen whether that's water heaters or cooking or home heating, but we believe that the asset value of the distribution system is incredibly valuable for our customers and has the ability to deliver a significant amount of energy on the coldest days in Colorado, our design temperature that we planned for in Colorado is minus 30, so it's still a very cold weather climate, has a need for a very efficient delivery system which we believe the pipeline system is there. Now, I do think that we can put -- as part of our strategy is to look at clean fuels and green hydrogen and synthetic natural gas and the opportunity that presents for our customers to realize a good product at an affordable price, that's also sustainable, it's important. But electrically, with EV's and beneficial electrification as we think about the future of our electric business in Colorado, there's probably growth there that's driven by both of those aspects.

Thank you very much, sir. We'll now move to Julien Dumoulin-Smith of Bank of America. Please go ahead. Julien Dumoulin-Smith: Hi, good morning, team. Thanks for the time and the opportunity, nicely done. So Brian just on the -- so, just first on bills, I just want to understand a little bit on the trajectory of bills, can you talk a little bit on what the rate increases are in customers this winter especially on the gas side? And then also just given the cresting that we've seen in some of the commodity prices here, how is that setting itself up to ultimately get reflected to back to your customers, if you think about the cadence of your hedging programs?

Yes. Hi, Julien. Good question, and we think about -- I'll talk a little bit about both sides of the business because we think about on the electric side really well-positioned from overall customer bill perspective. Now we're, call it, 85% electric and if you just look at our income statement and the cost of goods sold and fuel impacts on the electric side is modest given the inflationary environment we saw in 2022, Bob talked about it, right, it's really -- it's our wind build out that we've always talked about been the hedge for rising commodity costs and that's played out in 2022 and really good to see from a customer bill perspective. And also we went into the year, being on a national average, more than 20% lower on residential customer per bill. So, good place and a good place to be on the electric side. Obviously, on the natural gas LDC side, you have a lot fewer levers and lot fewer assets. And so you saw some of the headlines of 40% to 50% bill impacts for our customers, obviously, we do not like to see any sort of bill impacts of that magnitude, but you're absolutely right that that is starting to subside with where natural gas prices are going. And if you caught it, we've just, in the past two months, we’ve twice updated our gas commodity clause in Colorado which lowered the gas -- the commodity portion of the customers' bills by about 30% that will start to feel in Q1 relative to Q4 because we're actually going to be over collected, so we proactively did that and the commission was appreciative of that. So we're certainly taking every opportunity we can to make sure that we have reflecting the lower commodity costs in our customers. So that's really where we see, I think longer-term, we feel really good about delivering bills at the level of inflation as we think about 2030 and beyond and what the IRA is doing for us and for our customers. So we feel good both near-term and longer-term as we think about it.

Hi, Julien. I'll agree with everything Brian said and add, if you look at the long arc of history and look-forward over the last 10 years and into the next 10 years. I think that comment around bills at or below the inflation level is consistent on the electric and gas side, this has been a tough year on the gas side, we're empathetic and we've worked hard with the federal government to enable significant amount of -- record amounts of why heap and then actively getting that into people's hands that needed the most. Longer-term, clean-energy transition, I think we can do this as we said, because we are strategically advantage in our position, we can do this very cost-effectively across the country and we have a good starting point in total bills and what our customers feel 20% below the national average or more in our residential electric areas. And our gas business, I think you highlighted this in one of your reports is one of the top two or three lowest gas businesses in the country. So good starting point, but it doesn't mean we don't have work to do and obviously we're always empathetic to our customers who are feeling bill increases at the grocery store, at the fuel pump, at rents and mortgage payments and everything else. So, but thanks for the opportunity to talk about it. Julien Dumoulin-Smith: Yes, absolutely. You bet, hi listen, just going back to one of the questions from earlier. On the settlement conversations versus fully litigated cases obviously with curve backdrop is an ideal for having rate increases altogether. Can you talk a little bit about expectations we will settle cases broadly speaking here, to what extent could Minnesota be an isolated data point in the current instance given the current fact pattern or are you seeing challenges more broadly, here again without pointing fingers at specific statements necessarily?

Well, I'll start Julien and Brian can add-on if he's got anything to add. I think generally, we look for settlements. I think we're encouraged to look for settlements. I even think as you look at some of the recent data points in Minnesota, the commission is looking for settlement. So with that as backdrop, maybe this case is isolated, maybe we saw the path to reach a settlement with the parties and I think we're being encouraged to do so. I think broadly speaking, that's the case for most of our jurisdictions, and most of our staff, we need to make sure that we are delivering for our customers operationally, we're delivering for our customers and reliability, but we also need to make sure that we keep a financially healthy utility, credit metrics are really important preserving credit metrics and our operating companies is critical as we seek to raise capital cost advantageously and to deliver on the capital investment profile that we know we need to do. So, I think there is where the debate happens and again I think we've got a long track record of settling and so I would take your comment as encouraging to think that we're going to continue to settle cases going-forward.

Thank you very much, sir. We'll now take questions from Travis Miller calling from Morningstar. Please go ahead, sir.

Obviously you had a good year with the C&I demand, wondering what's your outlook in that 1% total sales for C&I we see another big year or does that moderate a bit?

Hi, Travis. Yes, I can take that one. No, I think we continue to see similar to what we saw in 2022 where strong growth in the C&I, if I parse it out, we have -- what we're expecting is about 2% up in C&I for 2023 and about a 1% decline in residential rate, continued decline from the COVID levels that we saw the increase in residential. C&I particularly good growth in SPS and I think just under the 2022 sales, when you look at the C&I numbers, you see that Colorado C&I is negative, but if you actually make an adjustment, we helped a large customer installed 240 megawatts solar farm to ensure that they stated in Colorado, ensured those jobs stayed in Colorado. And so if you made that adjustment Colorado C&I would actually have been a plus 2% for the year. So strong economic activity in C&I growth across all of our service territories, we expect that albeit a little bit of slowing in 2023 but to remain there.

Okay, great. And then a follow up to the hydrogen hub discussion, I think if I heard you correctly, April was the next point in which you file some more information, at what point is it there or is it later on where you get start getting a sense for given your proposal of non-approval that a proposal for CapEx potential spending?

Yes, Travis, I think it's early innings with the departments. April is the next filing date for, I'll call it, full plans, I think the Department of Energy is looking at probably around two dozen. So it's going to take them a while to parse through that in award grants for the -- I'm going to guess four to six that move forward from that perspective. We think both of our projects are incredibly interesting, provide lots of regional benefits from multiple sources and multiple users, which I think is a criteria that the department is going to look at. But if you're going to ask me to guess, I'd say it's at least end of next year before we get any clarity on those April applications potentially longer.

Yes, but expect us that's the hydrogen hub concept, which we're very interested in and I think we have a great opportunity to be significant participants, but also expect us to move forward with hydrogen pilots and opportunities both on the electric side and the gas side as we think about working through our Clean Heat Plan in Colorado, our Natural Gas Innovation Act in Minnesota and then also on the electric side as we think about how do we decarbonize the last 15% to 20% in our stack.

Sure, okay. End of next year being 2024?

Correct.

Okay. And then just real quick on that, how many partners are in those two proposals, Rocky Mountain, Midwest proposals?

I think we'll get back to the specific number, Travis, but I'm going to guess it's in the five to 10 in each region.

Okay, let's just looking for a rough number. Okay, very good. That's all I had. Thanks.

Appreciate it.

Thank you very much, sir. We'll now take questions from Mr. Paul Patterson from Glenrock Associates. Please go ahead. Your line is open.

So, I hear you on the Minnesota regulatory environment, it's pretty much what I've been hearing. But one thing I was little surprised by or I just -- it's hard to keep track of everything, there were some articles about some sort of state goal being below the national average by 5% and I think industrial's made a filing about this sort of saying that the rates are in danger or what have you about being in line with that policy. And I was just wondering, could you just refresh my memory about what is state policy goal is and sort of following-up on Julien's question, that's just sort of the trajectory -- how you see those performance within that thing going-forward because we have changes and moderation in fuel prices are going forward, just you're do not moving pieces I guess I'm just sort of wondering if you could -- and frankly I'm just not up to speed on the wall that they're talking about?

Hi, Paul, this is Chris Clark. I'm the President of our Minnesota company. Yes, there is a goal and statute that seeks to have our prices for our commercial and industrial class, be within 95% of the national average. I think the starting point here is really that we provide our customers a great value and I think the look that got some attention is simply a look at the rate. But if you actually look at our total bills for our C&I class, you'll see that over a 10-year period, they've been relatively flat and that's because the EIA data that gets pulled for rates is only one component of the bill. So I think when you look at what we achieved for our C&I class, if you take into account the conservation programs that have been really nation leading here in Minnesota and other credits, and things that those customers have done to be successful, you'll see that our C&I class rates are competitive, and in fact, we do a great job of attracting new business to our state. So, I think it's important when we look at the picture of how we're doing with our C&I rates and really take that into account. And as Brian and Bob have said, when we look at the plans for our clean energy transition, we're confident that we can deliver those results in line or less than CPI. And I think over the long-term, we've shown that we can continue to be a successful company and navigating this, keeping rates affordable for our customers and delivering great value.

Okay, also a great answer that. The second question, I have -- and I apologize if I missed this I got just interrupted here. The iron battery deployment, I apologize if you've already discussed this but are you just going to own these and what's the cost of them or could you just give a little bit more flavor of the economics associated with these two projects?

Yes, good question. No, we haven't disclosed the cost of these batteries, yet. We haven't made the regulatory filings yet and we are looking forward to having a discussion on our stakeholders and the commission, but we certainly will O&M, we think there are a valuable grid asset and important to us to own them as we think about how do we start to deploy these new technologies as we look to decarbonize and get to 100% carbon-free. So obviously, with any new technology the cost of more expensive, but this is a 100 hour battery that we don't see other solutions out there that are viable and it also iron oxide, right, if you think about rare metals, this is something that's readily available as we think about supply chains and what's the ability to scale. So overall, we're pretty excited about this. I think it demonstrates our leadership as an innovative clean tech company and we're excited to work with our commissions, but certainly more to come in terms of disclosing the cost.

Okay, great. Just any idea when you guys might make regulatory filing roughly speaking?

Later this year, it will be this year.

Okay. I mean, you guys are deploying in 2025, right, so?

Yes.

Thank you so much, sir. Our next question is coming from Mr. Anthony Crowdell of Mizuho. Please go ahead, sir.

Thanks for squeezing me in here. Just hopefully two quick ones. I guess when you look at the four major rate filings you guys have, they're all asking for a forward test year. When we look at 2023 and beyond, what do you think is a reasonable assumption for structural lag? Can that be reduced from say 90 to a 100 basis points to maybe 50, 60?

Hi, Anthony, good question. As we think about it from an earned ROE perspective, that's always been a goal of ours, right, we had a goal in 2015 to hold it from 100 to 50 bps and we're successful. And then in 2018, '19 and then had some COVID hit and we scale back on regulatory filings. I think as we look forward, our goal is to close that and we had some success from 2021 to 2022, albeit modest about 15 bps. And so our goal is to continue to focus on closing that and probably that 50 basis point range as you mentioned is a good goal as we think about it going forward and something that we're always focused on improving the regulatory constructs in getting now as we think about either multiyear plans or longer-term plans really providing the benefit of price to our customers, I think is really important something we'll continue to forward work through.

Great. And just one follow up on top of Julien's question. I think Bobby had mentioned you prefered the settlement route and not just specific to Minnesota, but just in general. It seems like lately some commissions may be or tinkering with settlements if I use that term, it seems that's maybe turning at a greater frequency, does that give you pause on achieving your settlement?

Hi Anthony, it's Bob. Great to see your name in the inbox today. Now, it doesn't give me pause look, I think we've had a long history here. We continue to work proactively with staffs and commission. And sometimes we go before ALJs and there's always things that are around the edges, important, but I think generally speaking settlements are encouraged and I think commissions understand that they want to encourage settlements that they need to be respect the entirety of them without tinkering. I think you've seen some commentary in some of the jurisdictions you might have been thinking about to that fact.

Thank you so much, sir. And as it appears to have no further questions, Brian I'd like to the conference back over to you for any additional or closing remarks. Thank you.

Yes, thank you all for participating in our earnings call this morning. Please contact our Investor Relations team with any follow up questions.

Thank you so much, sir. Ladies and gentlemen that will conclude today's conference. Thank you for your attendance and you may now disconnect.