Q2 2023 Southwest Gas Holdings Inc Earnings Call

Participants

Chad Van Sweden

Justin L. Brown; President; Southwest Gas Corporation

Karen S. Haller; President, CEO & Director; Southwest Gas Holdings, Inc.

Paul M. Daily; President & CEO of Centuri Group, Inc.; Southwest Gas Holdings, Inc.

Robert J. Stefani; Senior VP & CFO; Southwest Gas Holdings, Inc.

Thomas E. Moran; VP, General Counsel & Corporate Secretary; Southwest Gas Holdings, Inc.

Richard Wallace Sunderland; Associate; JPMorgan Chase & Co, Research Division

Ryan Michael Levine; VP; Citigroup Inc., Research Division

Presentation

Operator

Ladies and gentlemen, good day and welcome to the Southwest Gas Holdings Second Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, today’s conference is being recorded.
I would now like to turn the call over to Tom Moran, Vice-President, General Counsel and Corporate Secretary for Southwest Gas Holdings. Please go ahead.

Thomas E. Moran

Thank you, Kate. Hello, everyone, and welcome to the Southwest Gas Holdings second quarter 2023 earnings call. Throughout the call, we will be referencing presentation slides, which we have posted on our Investor Relations website.
I'm joined on today's call by Karen Haller, President and CEO of Southwest Gas Holdings; Rob Stefani, Senior Chief Financial Officer of Southwest Gas Holdings; Justin Brown, President of Southwest Gas Corporation; Paul Daily, President and CEO of Centuri Group; and Chad Van Sweden, the CFO of Centuri Group.
Please note that on today's call, the company will address certain factors that may impact this year's earnings and provide some longer-term guidance. Some of the information that will be discussed today contains forward-looking statements.
These statements are based on management's assumptions, which may or may not come true, and you should refer to the language on Slides 2 and 3 of this presentation and in the press release as well as our SEC filings for a description of the factors that may cause actual results to differ from our forward-looking statements. All forward-looking statements are made as of today and we assume no obligation to update any such statements.
I'll now turn the call over to Karen.

Karen S. Haller

Thanks, Tom. Thank you for joining us today to discuss the Southwest Gas Holdings' second quarter results. Turning to Slide 5, we are pleased with our progress on our transformational strategy of returning Southwest Gas to its core foundation as a premier, fully-regulated natural gas utility. We achieved significant milestones this quarter, building on our progress in the first quarter, which continues to position the utility for strength and success, while also advancing the separation of Centuri into stand-alone infrastructure services leader.
Notably, we received constructive regulatory outcomes at the utility during the quarter and delivered solid quarter results as we realized benefits from our efficiency and productivity enhancement efforts. Customer growth and demand remain strong, and the Southwest Gas team is acutely focused on safely addressing the needs of our customers, investing in the communities we serve, and delivering value for our shareholders.
We are strategically deploying capital and investing in our operations so that we can meet the demand for safe, reliable, and affordable energy solutions, while also working constructively with our regulators and legislatures to complement our strong organic rate-based growth.
We are confident in our momentum. We remain on track to deliver 5% to 7% CAGR and rate-based growth over the next three years and maintain a strong investment-grade balance sheet and competitive dividend.
Additionally, Centuri has performed outstanding during the first half of the year as they execute on their project pipeline and overcome the headwinds faced during 2022. As you can see on Slide 6, we are making excellent progress on our 2023 strategic priorities, completing several key strategic milestones during the second quarter.
At Holdings, we completed our 2023 financing plan with a $550 million term loan in the middle of April. We continue to see limited near-term equity needs for 2024 and 2025 and anticipate equity needs of less than $100 million in total through the end of 2025.
At Centuri, the spin remains well on track. We received ACC approval for a separation of Centuri and confidentially submitted a draft registration statement on Form 10 with the SEC. We look forward to a decision on the tax-free nature of the separation from the IRS, which we anticipate in the fourth quarter to be followed by completion of the spin in the first quarter of 2024.
Capital activities associated with ultimate spin structure options could occur earlier. At the utility, we continue to execute on our business plan. We received APC approval of the PGA surcharge in Arizona and remain on track with our expected Nevada rate case filing in the third quarter, while also announcing today an expected Arizona rate case filing in the first quarter of 2024.
Additionally, we are focused on the utility optimization review and will begin prioritizing initiatives during the remaining months of 2023, as I will cover in more detail later on this call.
We are pleased with our continued progress and our strategic plan is on track. On Slide 7, we walk through our strong first quarter performance of Southwest and Centuri. We are proud to announce that at the utility, we delivered the highest second quarter net income on record. We experienced another quarter of strong customer growth, adding approximately 42,000 new meter sets over the last 12 months, while continuing to make investments to ensure our system remains safe and reliable for the benefit of our customers.
As mentioned in the previous slide, we also received several constructive regulatory outcomes during the quarter. At Centuri, we announced record-setting second quarter revenue and EBITDA, which resulted in adjusted last 12-month EBITDA of $285 million. This strong second quarter performance was driven by strong storm restoration services, sustainable energy projects, and nearing the completion of a large gas pipeline contract.
As Paul will discuss, Centuri continues to win new business based on the strength of its relationships and capabilities and is well-positioned to play a critical role in the continuing energy transition. We recently completed a comprehensive full-cost opportunity assessment, where we identified areas of opportunity for improvement and optimization, including operations and operations support, information technology, procurement, among others.
We also made several leadership and organizational changes, including the formation of the Office of Continuous Improvement and Optimization, led by Senior Vice President Julie Williams. Julie and her team will work with our outside advisors to drive initiatives and positive change throughout the entire organization. We are now taking a deep dive into the opportunity assessment and developing specific initiatives that we believe will help us accomplish our goals of optimizing utility performance and accelerating our pursuit of operational excellence, identifying cost savings and efficiency opportunities for us to execute over the next couple of years.
Further, these initiatives will help support the tremendous growth we have across our service territory, help pass on realized savings to our customers, improve ROEs, and result in positive returns for our stockholders.
As I mentioned previously, we added 42,000 first-time meter sets during the past 12 months, with approximately $20,000 year-to-date. We expect to continue to benefit from a strong demographic and economic growth in the Southwest. Between 2023 and 2028, population growth is projected to be 3.76% in Arizona and 3.95% in Nevada.
New customer growth, combined with our pipeline replacement activities associated with our safety and integrity management programs, are the cornerstones of our $2 billion three-year capital expenditure program. The investments we have made to ensure safe and reliable energy service to our customers have translated to double-digit rate-based growth since 2017.
With our current capital investment plan, we expect to continue to grow our rate base at a compound annual growth rate of 5% to 7% over the next three years. We are committed to pursuing timely recovery of these investments by working collaboratively with our regulators to reflect these investments in our authorized rate base in a timely manner, either through rate cases or tracker programs.
I will now turn the call over to Rob, who will review our financial performance for the quarter.

Robert J. Stefani

Thanks, Karen. On Slide 11, we outline our earnings per share performance for the second quarter. The company's consolidated GAAP and adjusted EPS are shown by each operating company. As Karen mentioned earlier, the utility and Centuri each had a record-setting second quarter. The utility recorded its highest second quarter net income on record.
Centuri recorded its highest ever second quarter revenue and EBITDA on record. On an adjusted basis, we finished the second quarter of 2023 with EPS of $0.47 a share, a $0.24 per share improvement when compared to the same time period of the year prior, which included a full three months of MountainWest.
The utility's performance during the quarter is a product of our disciplined O&M management, regular pursuit of constructive regulatory outcomes, an improvement in interest income from the PGA, and an increase in COLI.
At Centuri, we are encouraged to see a significant quarter-over-quarter improvement in GAAP and adjusted earnings, signaling that we have transitioned past the headwinds of 2022. Centuri continued its work on a large gas infrastructure project and saw growth in storm restoration work and offshore wind.
In the appendix, we provide a reconciliation of adjustments by operating company. The vast majority of the second quarter adjustments relate to Centuri spin costs and consulting fees related to utility optimization.
Now I would like to provide a walkthrough on the performance of each operating company. Moving on to Slide 12, you will see the year-over-year performance drivers for our utility, Southwest Gas Corporation. In the second quarter of 2023, utility gross margin increased by approximately $26 million compared to last year. This improvement was driven primarily by the recovery on prior investments in our utility infrastructure and associated regulatory account balances, as well as continued customer growth.
Items offsetting these increases include decreased Arizona vintage steel pipe and customer-owned yard line revenue, miscellaneous revenue in customers outside of the decoupling mechanism.
O&M decreased $3 million between quarters, which was largely due to an $8 million decrease in legal claim-related expense. This benefit was offset by an increase in external contractor and professional services costs, as well as increases in other costs such as leak survey, line locating, and uncollectible customer accounts.
The approximate $19 million increase in depreciation and amortization between quarters was primarily due to the timing of the California Climate Credit Program referenced in our 10-Q filing, with the remaining increase resulting from a 6% increase in average gas plant and service.
Other incomes increased $22 million compared to last year. This was driven by increased interest income related to the carrying costs associated with regulatory account balances largely related to the purchase gas cost recovery mechanisms.
Favorable quarter-over-quarter changes in non-service related components of employee post-retirement benefits as well as improvement in investment returns underlying the company's own life insurance policy values. Offsetting these increases include a reserve taken on a software project.
Interest expense increased by approximately $9 million from the prior year primarily due to interest associated with the senior notes issued in 2022 and 2023 as well as the $450 million Southwest Gas Corporation PGA related term loan issued in January of this year to support gas purchases.
Moving on to Centuri's results this past quarter, Slide 13 reviews the drivers behind Centuri's second quarter adjusted EBITDA results. Centuri's second quarter revenues increased by approximately $100 million compared to the prior year. This increase was driven by progress on a large gas infrastructure project delivering natural gas to a battery factory in the Midwest, emergency response and offshore wind projects.
Centuri's revenues were partially offset by corresponding increases in operating expenses driven by higher volume of infrastructure services provided and increased subcontractor costs on offshore wind projects. Additionally, Centuri saw increased interest expense primarily due to higher interest rates on the approximately $1.2 billion of outstanding variable rate borrowings largely associated with the Riggs Distler acquisition.
Centuri is well positioned to continue serving its long-term customers while leveraging our geographic reach and expertise to serve new customers and markets. We are excited about the opportunities and momentum we see in 2023 and beyond for Centuri given the national focus on infrastructure investment.
On Slide 14, we outline our 2023 financing plan for Southwest Gas Holdings and Southwest Gas Corporation which was completed earlier in the quarter. As Karen noted, we do not anticipate meaningful equity needs in 2024 through 2025. At Holdings, we reiterate that we plan to target an FFO to debt ratio of approximately 14% by 2025 and our executed financing plan puts us on a path toward that.
Moving to Slide 15, we take a look at our balance sheet strength and our commitment to maintaining an investment-grade profile. On the left-hand side, we walk through net debt by operating company. When looking at the utility net debt levels, it is important to also consider the PGA balance which represents working capital that Southwest has spent for prior commodity purchases which is currently owed to Southwest by its customers. We expect a timely recovery of this PGA balance and earn a cost of carry on it as is reflected in the chart in the appendix on slide 29 which provides additional detail.
Our recent Arizona surcharge approval will continue to reduce the time to recovery. On the right-hand side of the slide, we note that we have not had any changes to our credit ratings or outlook from any of the three rating agencies.
I would now like to turn the call over to Justin Brown to discuss the utility.

Justin L. Brown

Thank you, Rob. Starting on Slide 17, we provide an update on the anticipated timing of our upcoming rate cases. We remain on schedule to file Nevada rate case in the third quarter and we're currently targeting filing by the end of this month. We're also actively preparing for two rate cases in 2024. First, an Arizona rate case in the first quarter and then given our existing five-year rate case schedule in California, we plan to file our next California rate case in the third quarter of next year.
Lastly, we're also evaluating the timing of our next Great Basin rate case and due to a prior settlement commitment, we know that that filing will occur prior to June of 2025.
Turning to Slide 18, we highlight other recent regulatory filings and constructive outcomes. First, we received approval for two different filings in Arizona. As Karen mentioned previously, the Arizona Corporation Commission approved our request to modify our existing gas cost balancing account rate to facilitate the timely recovery of the gas cost balancing account.
We anticipate this approval will provide approximately $130 million in incremental annual revenues. We also received approval of our annual customer-owned yard line or coil surcharge filing where we were authorized an increase of $4.3 million to recover previous coil investments.
In Nevada, we recently received approval of an all-party settlement for our annual rate adjustment filing. As part of this proceeding, the parties in the Commission also reviewed our gas purchases during the test period and found them to be reasonable and prudent.
As we mentioned on the last call, we have two filings pending in California and if the filings are approved, we believe both projects will be instrumental in the clean energy technology development and by demonstrating the role both our infrastructure and natural gas can play in a sustainable energy future by providing energy reliability, resiliency, and security to customers while also lowering GHG emission and helping support on-site combined heat and power and solar generation development.
The FERC recently issued a Certificate of Public Convenience and Necessity for our proposed mainline replacement project and recently granted the notice to proceed with construction, which we anticipate will start sometime this summer. Completion of this project will coincide with the timing of our next rate of case to minimize any lag associated with the investment in the project and recovery of that investment.
Great Basin also has an application pending for a proposed expansion project to meet the reliability and resiliency needs of a growing population and demand for natural gas service. Upon approval, new rates will become effective immediately upon completion of the project since it is a fully contracted expansion. We currently anticipate approval and completion of that project prior to the end of next year.
Turning to Slide 19, earlier this year Governor Lombardo issued an executive order in Nevada highlighting his energy priorities and policy objectives for the next decade. The executive order articulates support for an all-of-the-above approach to energy, placing an emphasis on affordability and reliability, as well as the important role energy plays in economic development and his commitment to ensure safe, reliable, and affordable energy remains available to all Nevadans, including ensuring that Nevadans have access to natural gas for use in their homes and businesses.
Consistent with this executive order, we worked with various stakeholders, including the Public Utilities Commission of Nevada, on legislation that would establish a robust and thoughtful approach to natural gas planning. The legislation was unanimously approved by both houses and was signed into law by Governor Lombardo in June. The legislation will require gas utilities to make filings every three years, identifying customer demands, resource plans for meeting those demands, including creating pathways for pursuing clean fuel technologies like hydrogen and renewable natural gas, as well as expanded opportunities for energy efficiency programs for the benefit of our customers.
The legislation will also ensure alignment among all stakeholders by providing gas utilities the opportunity to seek pre-approval of these investments before investments are actually made.
I'll now turn the call over to Paul Daly, President and CEO of Centuri Group.

Paul M. Daily

Thanks, Justin. Turning to Slide 20, I'm proud of the performance delivered by the Centuri team during the second quarter. With more than 12,000 employees in 43 states and provinces across the United States and Canada, Centuri has a very broad geographic reach and works with most of the largest blue-chip investor-owned utilities, and there are 100-plus million customers across the U.S. and Canada. These strengths mean Centuri is well-positioned to be a stand-alone strategic utility services leader with the scale and capabilities to meet the evolving needs of utilities and utility holding companies.
As Karen noted earlier, we are making continued progress towards Centuri's separation, which is on track to be completed in the first quarter of 2024. Importantly, as we work towards our pending separation, we have the resources, capabilities, and business structure to continue to deliver on our significant growth opportunities.
On Slide 21, we detail Centuri's proven track record of strong financial performance. As both Karen and Rob mentioned, Centuri had record-setting second-quarter revenue and EBITDA performance driven by strong continued execution and project wins, as well as strong demand from the on-going energy transition, which I'll discuss further shortly.
We have successfully managed through the inflationary pressures that we faced at this time last year and believe we are in a much better position as evidenced by our last 12 months adjusted EBITDA of $285 million, representing a $65 million year-over-year growth in LTM adjusted EBITDA.
While certain of our costs remain at or above the elevated levels experienced during 2022, we took proactive measures last year to negotiate more than $24 million of annualized incremental revenue increases on existing customer contracts and implemented $21 million of annualized cost savings to offset certain of these inflationary cost increases. We are continuing to deliver growth across our operations, both through expanding our core electric and gas operations, while realizing more project work in support of the energy transition.
Our acquisition of Riggs Distler in 2021 significantly increased our electric operations, helped further diversify our customer base, provided an important role in the Northeast, and provided significant opportunity in the offshore wind renewables market. As you can see on the right hand side, we have continued to diversify our portfolio to have a balance between electric and gas. We also remain diversified geographically with no one geography representing more than 11% of revenues.
Our record financial and operational performance was driven in large part by our strong execution across our project pipeline as detailed on Slide 22. Our winning model focused on serving the full scope of customer needs enables us to deepen our customer relationships as a trusted partner to support long-term capital spend programs while also building new relationships and expanding our work across North America. We are nearing completion of a $125 million gas pipeline construction contract in Indiana, which will expand an existing natural gas customer system with the installation of over 18 miles of new pipeline to provide service to a new manufacturing facility for electric vehicle batteries. This win highlights the need for additional infrastructure investment to bring innovative clean energy projects online in the coming years.
Our strong progress underscores our ability to deliver on very complex projects with hard and very fast timelines. We were also recently awarded a three-year electric utility distribution services contract worth $15 million to $20 million per year for a new customer. While not an overly large contract, it is notable as it is an opportunity which arose from our from the quality of our storm restoration work for them last year.
As you can see in the middle column, we are continuing to expand work supporting our customers as they execute on clean energy projects. We completed contract work for our first offshore wind project, which is the first ever advanced foundation components assembled and installed in the United States. We are on schedule with our second project having completed assembly of 22 of the 65 platforms. We recorded approximately 100 million dollars of revenue associated with the sustainable wind energy projects during the first half of 2023 and we remain on track to deliver approximately 250 million of wind energy revenues for the full year.
With a total of just over 525 million of wind contracts signed to date, we continue to see strong demand for offshore assembly, fabrication, and port logistics for offshore wind projects in the mid-Atlantic and Northeastern United States, which we expect will continue in the near term along with additional opportunities to construct the infrastructure needed to connect renewable capacity to the grid.
Finally, our scale and capabilities, particularly the numbers and locations of our crews, enables us to support our clients and their customers in times of need. This is particularly evident in our storm response and restoration services business.
Year-to-date, we've deployed more than 1,500 employees across 22 states for this restoration work, generating $64.5 million in higher margin revenue. As we look towards the second half of the year, we believe the business is very well positioned to realize response opportunities should we see an active summer or fall hurricane season. With our strong geographic footprint and comprehensive capabilities that span the entire utility value chain, Centuri is incredibly well positioned to continue its trajectory.
As summarized on Slide 23, Centuri will continue to benefit from the strong sector tailwinds across our gas and electric T&D markets, as well as significant multi-year opportunities in offshore wind-related infrastructure. Given the aging infrastructure and electric utility distribution, 45% of which is at or near the end of its useful life, we expect continuing strong demand from customers for significant replacements and upgrades to maintain system performance and increase grid resiliency and reliability.
Similarly, aging infrastructure and gas utility distribution has led to a regulatory-driven multi-decade replacement cycle with nearly half of gas distribution infrastructure near or at the end of its useful life of 40 years.
In addition to the decades of work to support investments needed in the gas and electric T&E infrastructure, Centuri is also uniquely positioned to benefit from the energy transition as we support our utility clients across North America. Investment in renewable energy continues to accelerate rapidly, and we are confident that the energy transition will be a key long-term growth driver for Centuri.
The Inflation Reduction Act and other federal infrastructure investments are driving opportunities for growth in areas where we are well positioned to perform work. We look forward to sharing our progress as we advance toward Centuri's separation in the first quarter of 2024.
With that, I'll turn it back to Karen.

Karen S. Haller

Thanks, Paul. Our year-to-date results are a testament to our on-going efforts, and we look to finishing the year strong. On Slide 27, we are reaffirming our 2023 utility net income and 2023 Centuri revenue and adjusted EBITDA margin guidance. We are confident that each business' strong performance to date will drive full-year results within the guidance ranges we reaffirmed last quarter.
Based on the results through the first half of the year, the 2023 utility net income is more likely to land in the upper half of our range. Additionally, we are making an upward revision to 2023 utility CapEx guidance, now $700 million to $720 million, which is largely a result of better-than-expected customer growth and favorable new business trends across our service territories and the associated investment in our infrastructure to respond to this increased demand for natural gas and to ensure we maintain a safe and reliable distribution system for the benefit of our customers.
At Centuri, we affirm our guidance ranges. Based on first-half 2023 performance, we would expect revenue at the higher end of the range. Centuri margin will depend on level of storm activity for the year. The third quarter is historically the most active quarter for major storms.
Before we open the call-up to Q&A, I want to emphasize that our teams are focused on executing our 2023 strategic priorities, delivering strong financial results, and providing exceptional service to our customers. At Southwest Gas Holdings, we are confident in our path forward as a premier pure-play natural gas utility. We will continue delivering steady organic rate-based growth through strong regional demand dynamics, as well as earnings growth through financial discipline, operational excellence, and constructive regulatory relationships. We're advancing toward the planned tax-free spin of Centuri, putting the company in a better position to align with stockholders and de-lever the business organically with healthy cash flow generation.
With that, I'd like to open up the call for questions.

Question and Answer Session

Operator

(Operator Instructions) We'll take our first question from Richard Sunderland of JPMorgan.

Richard Wallace Sunderland

Starting with the Centuri timeline, could you walk through some of the factors with the new late 1Q, 2024 language relative to the prior 4Q 2023, 1Q 2024 outlook? What's influencing the latest perspective on timeline to complete?

Karen S. Haller

Sure. I think that we believe we're still on track. We filed the PLR and we are expecting some kind of answer from the IRS on our PLR in the fourth quarter. And so that's largely driving our change to clarify where we are in the first quarter spend. So we expect to get an answer from the IRS in the fourth quarter, be able to spin in the first quarter, but we may access capital markets before that time.

Richard Wallace Sunderland

Understood. Alongside all this, you've talked in the past about other options or routes to affect the separation. Any updated thinking there? Any new analysis on that front?

Karen S. Haller

No. We're still focused on the spend at this point. We obviously have fiduciary duty to our stockholders. If any other types of transactions would become available, those are certainly things that the board would look at. But we are focused at this point on the spin and the first quarter completing that as announced.

Richard Wallace Sunderland

Got it. Got it, that's helpful. And then just one last one if I could the dividend, could you, could you remind us what your what your latest outlook is and timelines to evaluate is that has a timeline I guess been pushed out as well in consideration of the later Centuri separation timeline.

Karen S. Haller

No the timeline really has not changed and what we're looking at is as we announced previously, we are committed to providing a competitive dividend with our peers and so that has not changed at this point.

Richard Wallace Sunderland

Is competitive meaning in terms of payout ratio?

Karen S. Haller

Correct.

Operator

The next question is from Ryan Levine of Citi. Please go ahead.

Ryan Michael Levine

Good morning. I had a couple operational questions. First to start off, storm numbers seem to be a driver of second quarter performance given July activity seems to have accelerated some of the storm work. Are you seeing any of that across your business?

Chad Van Sweden

Yes, we certainly this is Chad Van Sweden the Centuri CFO. We certainly saw much stronger storm activity in the first half of the year than we've historically seen. If part of that is just weather, part of that is that we have really sort of formalized and organized our storm response capabilities and that we're able to capture more storm opportunities than we've historically been able to capture. As Karen mentioned, the third quarter tends to be the strongest quarter for storm activity and we are expecting a particularly active hurricane season this year.

Ryan Michael Levine

Okay. And then on CapEx, do you raise your utility CapEx numbers. Where -- what are the big drivers of that across your service territories and are there any other additional opportunities that you see to augment your capital spending program in the coming quarters?

Karen S. Haller

So the CapEx is largely driven by new business and if that's in our infrastructure and so we continue to see those opportunities, the growth as I mentioned previously has been very strong in both our jurisdictions in Nevada and Arizona and continues to drive that. We really did have better than expected growth, which is driving that number.

Ryan Michael Levine

Okay and then last on operations. The consulting study seems to have been completed by now, are any recommendations or any opportunities identified through third-party advisors been implemented or could those be incremental opportunities to cut costs beyond what's in your term plan?

Justin L. Brown

Hey Ryan, it's Justin. I think as Karen outlined, I think it's kind of a multi-phase approach right. So as she described, we completed the kind of the cost opportunity assessment right which gives you general direction on where to look and now we're embarking on phase 2 which is actually identifying specific initiatives that we'll be able to identify into the future. So yes those are those are things that are still into the future that we're evaluating as we develop those specific initiatives that will probably take up the third and end of the fourth quarter and then the hope would be as we start to look at maybe implementing some of those in 2024.

Operator

(Operator Instructions) There are no other questions at this time. This concludes our question-and-answer session. I would like to turn the call back over to Tom Moran for closing remarks.

Thomas E. Moran

Thank you Kate. And thank you all for joining us today. This concludes our conference call. Thank you for your interest in Southwest Gas Holdings and have a good day.

Operator

This concludes today's Southwest Gas Holdings Second Quarter 2023 Earnings Call and Webcast. You may disconnect your line at this time. Have a wonderful day.