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Avangrid, Inc. (NYSE:AGR) Q2 2019 Earnings Conference Call July 24, 2019 10:00 AM ET
Patricia Cosgel - Vice President of Investor and Shareholder Relations
Jim Torgerson - Chief Executive Officer
Doug Stuver - Chief Financial Officer
Bob Kump - Deputy Chief Executive Officer and President, AVANGRID
Laura Beane - Chief Executive Officer, AVANGRID Renewables
Tony Marone - Chief Executive Officer, AVANGRID Networks
- Patricia Cosgel - 投资者和股东关系副总裁
- Jim Torgerson - 首席执行官
- Doug Stuver - 首席财务官
- Bob Kump - AVANGRID副首席执行官兼总裁
- Laura Beane - AVANGRID Renewables首席执行官
- Tony Marone - AVANGRID Networks首席执行官
Praful Mehta - Citigroup
Julien Dumoulin-Smith - Bank of America
Christopher Turnure - JPMorgan
Insoo Kim - Goldman Sachs
Angie Storozynski - Macquarie
Martin Young - Investec
Andrew Levi - ExodusPoint
Reza Hatefi - LNZ Capital
- Praful Mehta - 花旗集团
- Julien Dumoulin-Smith - 美国银行
- Christopher Turnure - 摩根大通
- Insoo Kim - Goldman Sachs
- Angie Storozynski - 麦格理
- Martin Young - Investec
- Andrew Levi - ExodusPoint
- Reza Hatefi - LNZ Capital
Hello, and welcome to the Q2 2019 AVANGRID Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]
I'd now like to introduce your host for today's call Patricia Cosgel. You may begin.
您好，欢迎参加2019年第二季度AVANGRID收益电话会议。 此时，所有参与者都处于只听模式。 之后，我们将进行问答环节，届时将提供相关说明。 [操作说明]
我现在想介绍一下今天的主持人Patricia Cosgel。 你可以开始吧。
Thank you, Towanda, and good morning to everyone. Thank you for joining us to discuss AVANGRID's Second Quarter 2019 Earnings Results. Presenting on the call today are Jim Torgerson, our Chief Executive Officer; and Doug Stuver, our Chief Financial Officer. A team of AVANGRID officers will also be participating in the call to answer your questions. If you do not have a copy of our press release or presentation for today’s call, they are available on our website at www.avangrid.com.
During today’s call, we will make various forward-looking statements within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements, if any of our key assumptions are incorrect or because of other factors discussed in AVANGRID’s earnings news release, in the comments made during this conference call, in the Risk Factors section of the accompanying presentation, or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found on our website avangrid.com.
We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today’s presentation for definitional information and reconciliations of non-GAAP financial measures to the closest GAAP financial measures.
I will now turn the call over to Jim Torgerson.
谢谢你，Towanda，大家早上好。感谢您加入我们，讨论AVANGRID 2019年第二季度的收益结果。今天出席的电话会议是我们的首席执行官Jim Torgerson;和我们的首席财务官Doug Stuver。 AVANGRID官员团队也将参与电话会议以回答您的问题。如果您没有今天电话的新闻稿或演示文稿副本，可以访问我们的网站www.avangrid.com。
Thanks, Patricia, and good morning, everybody. And thank you for joining us today. Here with us also, we have Bob Kump, who is now Deputy CEO and President for AVANGRID; Laura Beane who is the CEO for our Renewables business; and then Tony Marone in his inaugural call as the CEO for Networks. So I want to wish them all well today. And Tony you can join in from the phone.
Let's start out. For the second quarter of 2019 net income was $110 million, or $0.36 a share. Year-to-date, net income was $327 million or $1.06 a share which was down about 7% over the year. Our adjusted net income in the second quarter was $101 million, or $0.33 a share. Year-to-date adjusted net income amounted to $319 million or $1.03 a share, which was down about 14% against 2018.
Now we were disappointed with the continued lack of wind resource that impacted most of our fleet. The lower-than-expected wind and the impact of non-deferrable minor storms and staging costs caused our earnings to be below our expectations for the second quarter and year-to-date. We are implementing various initiatives of our Forward 2020+ plan to partially mitigate the reduced revenue and cost increases and we're confident that this initiative will enable us to achieve our strategic and financial goals in 2019 and beyond.
I also want to mention that most of the efficiencies will be recognized in the second half of 2019. Also, we're continuing to execute on our strategic plan objectives. Now, our New England Clean Energy Connect transmission project is on track. And recently, the Massachusetts DPU approved 20-year contracts between Hydro-Québec and the Utilities. And those utilities are Eversource National Grid and Unitil.
In New York, NYSEG and RG&E filed their electric and gas rate cases in May for new rates effective in the second quarter of 2020. This includes requests for recovery of resiliency investments and deferral of the staging costs that we're experiencing. Our Patriot Wind 226-megawatt wind farm was purchased upon commercial operation in June and our 763 megawatts of renewables those are assets under construction and they are on track to come online by the end of this year.
For our Vineyard Wind offshore project as you probably know we were recently informed that the Bureau of Ocean Energy Management has delayed the final Environmental Impact statement. However, we are confident that the pending reviews can be concluded shortly, and the final EIS released soon after. Vineyard achieved other really relevant milestones during the second quarter, including the approval from the Massachusetts Energy Facility Siting Board, which is an independent state board responsible for the review of proposed large energy facility as well as the regional development review permits from the Cape Cod Commission and the Martha’s Vineyard Conservation Commission.
To date, we have secured about 80% of the supply chain and the remaining 20% of the contracts are in final stages of negotiations. During the second quarter, we entered in a new PPA for 140 megawatt for the La Joya ll onshore wind farm in New Mexico. On the financing side, we successfully issued our second green bond in May for $750 million and the coupon was under 4%. In addition on July 16 the Board declared a third quarter dividend of $0.44 payable October 1.
谢谢，帕特里夏，大家早上好。谢谢你今天加入我们。在这里，我们还有Bob Kump，他现在是AVANGRID的副首席执行官兼总裁; Laura Beane是我们可再生能源业务的首席执行官;然后托尼马龙在就职典礼中担任网络首席执行官。所以我今天希望他们一切顺利。托尼你可以通过电话加入。
现在我们对持续缺乏影响我们大部分船队的风资源感到失望。低于预期的风力以及不可延迟的小风暴和分期成本的影响导致我们的收益低于我们对第二季度和今年迄今的预期。我们正在实施Forward 2020 计划的各种举措，以部分减轻收入和成本的增加，我们相信这一举措将使我们能够在2019年及以后实现我们的战略和财务目标。
我还想提一下，大部分效率将在2019年下半年得到承认。此外，我们将继续执行我们的战略计划目标。现在，我们的新英格兰清洁能源连接输电项目正在按计划进行。最近，马萨诸塞州DPU批准了Hydro-Québec和公用事业公司之间的20年合同。这些实用程序是Eversource National Grid和Unitil。
在纽约，NYSEG和RG＆E于5月份提交了电费和燃气费率案例，以便在2020年第二季度实现新的利率。这包括恢复弹性投资的请求以及我们正在经历的分期费用的延期。我们的Patriot Wind 226兆瓦风电场于6月份进行商业运营，我们的763兆瓦可再生能源是在建资产，他们有望在今年年底上线。
对于我们的Vineyard Wind海上项目，您可能知道我们最近被告知海洋能源管理局推迟了最终的环境影响声明。但是，我们有信心可以在短期内完成未决的审核，最后的EIS很快就会公布。 Vineyard在第二季度实现了其他真正相关的里程碑，包括马萨诸塞州能源设施选址委员会的批准，该委员会是一个独立的州委员会，负责审查拟议的大型能源设施以及科德角委员会的区域发展审查许可证。和玛莎葡萄园保护委员会。
迄今为止，我们已获得约80％的供应链，其余20％的合同处于谈判的最后阶段。在第二季度，我们为新墨西哥州的La Joya ll陆上风电场投入了140兆瓦的新PPA。在融资方面，我们在5月以7.5亿美元成功发行了第二份绿色债券，票面利率低于4％。此外，7月16日，董事会宣布10月1日应付第三季度0.44美元的股息。
On slide 6, for the quarter GAAP earnings per share was $0.36 a share, up $0.01 versus the second quarter of 2018. The adjusted earnings per share was $0.33 which was down $0.08 or 22% versus the second quarter of 2018. For the first half GAAP earnings per share decreased $0.07 or about 7% to $1.06 and adjusted earnings per share decreased $0.17 or 14% to $1.03. The key drivers for the first half results by business are for Networks first, adjusted earnings per share decreased $0.04, or about 4% year-over-year to $0.86 per share. The results reflect the impact of higher depreciation, which is about $0.06 a share higher non-deferrable minor storms and staging costs and these negative impacts more than offset the contributions from our multi-year rate plans in New York and Connecticut.
And for Renewables, adjusted earnings per share decreased $0.15 to $0.22 per share significantly -- were down about 6% year-over-year on wind production. And that was primarily due to significant lower wind resource and extreme weather conditions in the first quarter. The year-over-year comparison was also affected by lower prices and expiring of PTCs. This was partially offset by higher revenues from the Klamath, which is our gas combined-cycle facility that added about $0.04 and as a result of lower renewables production and the volatility of prices in the West.
Now flipping to slide 7. Today, we're revising our guidance and lowering by $0.05 to the high end of our consolidated 2019 GAAP earnings guidance to $2.18 to $2.28 per share, compared to the previously reported guidance of $2.18 to $2.33 per share, and adjusted earnings to $2.25 to $2.35 per share, compared to previously reported $2.25 to $2.40 per share for 2019.
Now, this update primarily reflects in Networks the impact of staging costs, minor storms and the expected resolution of 2018 storm proceedings in New York, which are going to be partially offset by Forward 2020 efficiencies. In Renewables, in addition to the lower-than-expected wind resource over the first half of the year, we had weather-related delays for construction projects in Texas with Patriot purchased at COD in late June rather than as expected in May as well as the delay for Karankawa. This has probably cost us about $0.04 a share versus expectations for 2019. And again, these results are going to be partially offset by the efficiencies gained from our Forward 2020+ plan.
Impacts related to minor storms and the staging costs in Networks and low wind and extreme weather renewables, we're approximately negative about $0.15 for the first six months versus our expectations. Now, the number of minor storms increased by approximately 40% in the first six months of the year from 26 to 36 minor storms. And cost increased in line with it from $25 million to about $36 million. The majority of this was in NYSEG's territory. First half wind production was about 13% below expectations of which 7% was wind resource.
Now as we look to the second half of the year, there are a number of key risks and mitigation opportunities. We're implementing best practices and operating efficiencies across the company as part of our Forward 2020+ plan. In Renewables, we're assuming normal wind production for the second half of the year. Our earnings may also be affected by the construction and timing of the COD for the wind project and the sales and potential partnerships of renewables development project. Keep in mind, we said we will be looking at sales that would generate gains between $0.05 and $0.10 a share.
而对于可再生能源，调整后每股收益显着下降0.15美元至每股0.22美元 - 风电产量同比下降约6％。这主要是由于第一季度风资源和极端天气条件显着降低。年度比较也受到价格下降和PTC过期的影响。这部分被Klamath的收入增加所抵消，Klamath是我们的天然气联合循环设施，增加了大约0.04美元，原因是可再生能源产量下降和西方价格波动。
现在，这一更新主要在网络中反映了分期成本，小风暴和2018年纽约风暴诉讼的预期解决方案的影响，这些影响将被2020年前进的效率部分抵消。在可再生能源方面，除了上半年风电资源低于预期外，我们还与德克萨斯州的建设项目有着天气相关的延误，6月下旬在爱尔兰共和国购买了爱国者，而不是像5月份预期的那样。 Karankawa的延迟。与2019年的预期相比，这可能使我们每股损失约0.04美元。而且，这些结果将部分抵消我们的Forward 2020 计划所带来的效率。
现在，我们期待今年下半年，存在一些关键风险和缓解机会。作为Forward 2020 计划的一部分，我们正在整个公司实施最佳实践和运营效率。在可再生能源方面，我们假设下半年风能正常。我们的收益也可能受到风电项目的COD建设和时间安排以及可再生能源开发项目的销售和潜在合作伙伴关系的影响。请记住，我们表示我们将关注每股0.05美元至0.10美元的销售额。
In Networks we're addressing cost recovery mechanisms for minor storms in our rate requests such as minor -- thresholds, deferral of staging costs and funding for the minor storms themselves. However 2019 is still a year where we may be exposed to storm impacts. So until we get new rates in New York and Maine to reflect that we're going to be subjected to those storm impacts.
We also expect additional potential impacts due to regulatory outcomes, including the FERC ROE decision under current proposal of 10.41% as the base and a cap for incentives at 13.08%. So this assumed about $0.06 impact in 2019.
Going to slide 8. Moving on to the highlights of our Networks business. In New York, we filed one year rate cases for New York State Electric and Gas and Rochester Gas and Electric on May 20 requesting new rates effective in the second quarter of 2020. We are requesting a 9.5% ROE on a 50% equity and we're projecting a rate base of $5.1 billion for the year 2020 to 2021. The filings also address staging costs for storms as well as our resiliency plan, which includes the full cycle of vegetation management program at NYSEG. We anticipate this will be about an 11 months process with the final decision in new rates expected by April of 2020.
On slide 9, significant achievements that are made with our $950 million New England Clean Energy Connect transmission project, which will deliver 1,200 megawatts of Canadian hydropower to the New England grid. The project is on track to have all Maine state permits by the end of 2019 and final project approvals by early 2020.
In June, the Massachusetts DPU approved a 20-year contract between Hydro-Québec and the Utilities, Eversource, National Grid and Unitil and the starting price of that is little over $51 a megawatt hour.
In addition three legislative bills targeting the project were defeated in May. Other stages of the approval process are underway at the Maine Department of Environmental Protection, the Maine Land Use Planning Commission and the U.S. Army Corp. of Engineers with their decisions expected in the late 2019.
Our timeline has construction beginning in early 2020 and the commercial operation by the end of 2022. This is supported by our existing control of 100% of the rights of way with 73% in existing transmission corridors and 27% in industrial forest.
On slide 10 in renewables, we're successfully implementing our strategic plan with 763 megawatts of onshore wind projects under construction on-track to come online by the end of the year.
Our Patriot Wind 226-megawatt wind farm was purchased at COD in June of 2019 right at the end of the month. Also we executed new onshore wind contracts for 192 megawatts year-to-date which are not in the February 26, 2019 long-term outlook with a new PPA for 140 megawatts for La Joya ll in New Mexico signed in the second quarter and a 52-megawatt extension of the Tatanka Ridge project in South Dakota which was secured in the first quarter.
We replaced 22 megawatts of previous merchant capacity with a new PPA for the Mountain View III wind farm in California. Moreover, we have increased our pipeline from about 15.4 gigawatts to 15.9 gigawatts.
我们的Patriot Wind 226兆瓦风电场于本月底在2019年6月在COD购买。此外，我们今年迄今为止执行了192兆瓦的新陆上风电合同，这与2019年2月26日的长期前景不同，新墨西哥州La Joya ll在第二季度签署了新的PPA 140兆瓦和52 - 南达科他州Tatanka Ridge项目的梅加瓦特延伸，该项目于第一季度得到保障。
This breaks down into 6 gigawatts of onshore wind, 4.9 gigawatts of solar and 5 gigawatts of offshore wind which includes 2.5 gigawatts from our Kitty Hawk site as well as 2.5 gigawatts from our 50% share of Vineyard wind leases off the coast of Massachusetts. In addition, we're reviewing prospects for the optimization and monetization of our pipeline with various ongoing negotiations on asset sales and potential partnerships.
On slide 11, you can see an overview of our renewable projects. Since 2018 we've executed nearly 2223 megawatts of contracts or new renewable projects exceeding by 223 megawatts our baseline growth strategy through 2022. By year-end, we expect only 1 gigawatt of wind to come online.
In addition we have secured contracts for over 680 megawatts of wind and solar projects for commercial operation in 2020 and more than 550 megawatts to come online in 2021 and 2022.
On slide 12 concerning the offshore business as I said, we were recently informed that the Bureau of Ocean Energy Management has delayed the final environmental impact statement for our Vineyard Wind 800-megawatt offshore wind farm in joint venture with Copenhagen Infrastructure Partners.
While this is not unusual, given the need to consider all the best available information and really the landmark nature of the project Vineyard Wind will be challenged to move forward in its current configuration, if the final EIS is not issued approximately within the next four to six weeks.
Despite this, we remain confident that any remaining reviews can be concluded shortly and a final EIS released soon after. Vineyard Wind is committed to working with BOEM and the Department of Interior throughout that process. With favorable action from the federal government and the Massachusetts DEP, we will continue to target a commissioning date in 2021.
Meeting this timeline enables Vineyard to capture the 24% ITC over the $2.8 billion investment and would accelerate the project's environmental and economic benefits to the region. Now the project has recently completed other permitting milestones.
In May, the Massachusetts Energy Facility Siting Board approved permits for interconnection with the regional grid. Vineyard also received regional development review permits from the Cape Cod Commission and from the Martha’s Vineyard Conservation Commission.
In light of the recent vote from the Edgartown Conservation Commission against granting an export cable permit, Vineyard Wind is pursuing an order from the Massachusetts Department of Environmental Protection superseding the decision.
In addition we have now secured over 80% of the project supply chain including monopile foundations which will be manufactured and delivered by Sif. We have further finalized contracts to Vestas to provide 9.5 megawatt turbines with Prysmian for offshore cables with Bladt for offshore substation with Windar for transition pieces. The remaining 20% are in the final stages of negotiations.
Now on slide 13 Vineyard Wind also holds two lease areas for submission in the future RFPs which can accommodate up to 1.5 gigawatts and 1 gigawatt respectively. These sites are owned jointly with Copenhagen Infrastructure Partners. In addition the Kitty Hawk lease area is 100% owned by AVANGRID Renewables and it has a potential capacity of up to 2.5 gigawatts.
尽管如此，我们仍然有信心可以在短期内完成任何剩余的评论，并在不久后发布最终的EIS。 Vineyard Wind致力于在整个过程中与BOEM和内政部合作。在联邦政府和马萨诸塞州DEP的有利行动下，我们将继续瞄准2021年的调试日期。
现在在幻灯片13上，Vineyard Wind还拥有两个租赁区域，用于将来提交的RFP，可分别容纳1.5千兆瓦和1千兆瓦。这些网站与Copenhagen Infrastructure Partners共同拥有。此外，Kitty Hawk租赁区域由AVANGRID Renewables全资拥有，其潜在容量高达2.5千兆瓦。
The potential growth of the offshore industry is significant. Seven states now along the East Coast have communicated offshore wind targets totaling nearly 25 gigawatts. Vineyard Wind has submitted bids into the Rhode Island renewables RFPs with proposals of 200 and 300 megawatts. The selection of that winning bid is expected by the end of July.
On May 17, Massachusetts issued a second offshore wind RFP for up to 800 megawatts. While bids from 200 megawatts to 800 megawatts will be permitted, a 400-megawatt proposal must be included. Bids are due August 16 with selection expected on November 8. Connecticut released a draft RFP on July 1. The final solicitation is expected on August 15 with bids due on September 30 and selections expected in November. Submissions must include at least one 400-megawatt proposal and include multiple bids. We do plan to bid in both of the RFPs and we're also watching for opportunities for additional lease options.
On slide 14, I want to update you on our Forward 2020 Plus program, which is a companywide improvement and optimization initiative that we launched in 2017 to ensure that we're operating with best-in-class efficiency. As I mentioned in the first quarter update, we're partnering with external consultants to perform what we call a comprehensive mid-period assessment of our Forward 2020 Plan. In doing so, we evaluate everything from our organizational design and service delivery models to our processes and governance structures.
Through this mid-period assessment, we have identified opportunities to mitigate costs and deliver sustainable growth, which we expect to provide between $70 million and $85 million in pretax savings for 2019. Approximately half of the revenues in savings we achieved this year will continue beyond 2019. Along with other long-term improvement initiatives, we expect to see annual sustainable run rate savings of $100 million pretax going forward.
To achieve these results in the short-term period of time, we're implementing really transformative changes across AVANGRID. For example, we're closely managing discretionary spending and capitalizing more labor hours across-the-board because we're staying up with all of our capital spending right now, which we didn't do last year. And we're also through improved processes and governance systems.
Increased capitalization and spend management initiatives will represent about $40 million of pretax benefits for 2019. We've already started to realize the benefits of these initiatives, although the real benefit of our spend reduction initiatives will hit the P&L in the second half of the year. Additionally, in the second quarter, we successfully transitioned to a co-source model for our tax team that will save more than $2 million this year and over $4 million each year going forward. This change has now been implemented.
We've also invested in O&M projects for our renewables fleet. They've already brought our wind availability up to 97% or better, which we estimate will add more than $2 million to our bottom line this year as well. At the same time, we're becoming a flatter more agile company by widening managerial spans of control and reducing layers in our organizational structure. The efficiencies achieved here will provide about $5 million in pretax savings for 2019. We're also in the early stages of implementing robotic process automation projects, which I mentioned in the first quarter. Now we're automating processes in our billing, front office, credit and collection departments, which will both reduce our costs and enhance service for our customers.
离岸工业的潜在增长意义重大。现在沿东海岸的七个州已经传达了近25千兆瓦的海上风电目标。 Vineyard Wind已经提交了罗德岛可再生能源RFP的投标，建议为200和300兆瓦。中标的选择预计将在7月底之前完成。
在幻灯片14中，我想向您介绍我们的Forward 2020 Plus计划，这是我们在2017年推出的全公司改进和优化计划，以确保我们以最佳的效率运营。正如我在第一季度更新中所提到的，我们正在与外部顾问合作，执行我们称之为“2020年前瞻性计划”的综合性中期评估。在此过程中，我们评估从组织设计和服务交付模型到流程和治理结构的所有内容。
For the longer term, we're building on the sustainable projects being implemented now. We're reviewing further outsourcing, but also in-sourcing functions. We will be moving work to the appropriate skill level. Rather than using higher-priced and higher skilled contractors, we can in-source these activities more cost effectively. We're optimizing renewable operations and reducing dry fans for our utility personnel to improve productivity. These are just a few of the examples of the important projects we have come out of this mid-period assessment of our Forward 2020 Plus plan and we're confident that revenue and efficiencies, we will realize through this program have us on track to meet our goals and commitments.
In conclusion, we're implementing the strategy we put in place. We're focused on our core regulated and contracted businesses and we continue to maintain a strong balance sheet while we execute programs like the Forward 2020 Plus for best-in-class operational efficiency. We will continue to focus on delivering clean energy solutions as we build the grid of the future and take care of our customers through excellent service and ever-smarter energy solutions. We're fulfilling our strategy to deliver sustainable growth by investing in a smarter and cleaner energy future.
But now, I'm going to hand it over to our CFO, Doug Stuver.
从长远来看，我们正在建立现在正在实施的可持续项目。我们正在审查进一步的外包，以及内包功能。我们将把工作转移到适当的技能水平。我们可以更经济地采购这些活动，而不是使用价格更高，技术更高的承包商。我们正在优化可再生能源运营，减少干燥风机，为我们的公用事业人员提高生产率这些只是我们对Forward 2020 Plus计划中期评估中出现的重要项目中的一小部分，我们相信通过该计划实现的收入和效率使我们能够顺利实现我们的目标和承诺。
总之，我们正在实施我们制定的战略。我们专注于我们的核心监管和合同业务，我们继续保持强大的资产负债表，同时我们执行Forward 2020 Plus等计划，以获得最佳的运营效率。我们将继续专注于提供清洁能源解决方案，同时建立未来的网格，并通过优质的服务和更智能的能源解决方案来照顾我们的客户。我们正在实现通过投资更智能，更清洁的能源未来实现可持续增长的战略。
Thank you, Jim. Good morning everyone and thank you for joining us today. I'm now on slide 17. On this slide, we roll forward to earnings per share quarterly and year-to-date through the first half from 2018 to 2019 on a U.S. GAAP basis and on a non-U.S. GAAP basis.
Adjusted earnings per share reflects the exclusion of mark-to-market adjustments in the Renewables segment, restructuring charges and adjustments related to our prior ownership of Gas Storage and Trading businesses which we exited in 2018 and other items. The combined impact of which was negative $0.03 for the quarter and first half.
As you can see on both the U.S. GAAP and adjusted basis, Networks' results for the quarterly and year-to-date roll forward are lower, largely reflecting non-deferrable minor storm and staging costs and higher depreciation. Our pending rate cases in New York and Maine will compensate for the higher depreciation once rates become effective for those jurisdictions.
We estimate New York rates will become effective in late April 2020 and Maine rates will become effective in October of 2019. Renewables' results were also lower on a comparative basis, although a significant portion of the year-over-year decline occurred in the first quarter due to poor wind resource and negative impact from extreme weather.
The poor wind resource continued in the second quarter, although improved from the second quarter of 2018. Corporate results are lower in the second quarter comparison, reflecting the issuance of a new green bond as well as the impact of the consolidating tax rate adjustment. I also want to add that we're on track with AVANGRID's 2019 capital plans. In the first half of 2019, we spent nearly $1.4 billion in CapEx, which is over an 80% increase to the first half 2018 levels. This significant increase in investments is important to our future growth and in delivering safe and reliable service to our customers.
Now in the next several slides I'll provide more detail on the business segment impact. Slide 18 summarizes the results and key drivers for the Networks’ quarterly and year-to-date results and comparisons for the same periods in 2018. For the second quarter you can see that Networks’ results were down $13 million quarter-over-quarter with $66 million of adjusted net income and $0.21 earnings per share.
While we experienced the benefit of $0.03 quarter-over-quarter due to new rate years in several of our utilities, this benefit was offset by a $0.04 negative impact from higher depreciation due to increased fixed assets placed in service as we successfully executed our capital investment plan. Non-deferrable minor storms and staging costs were higher than the second quarter in 2018, particularly with higher staging costs in the latter half of the quarter. We're addressing these impacts and our pending rate case filings in New York and Maine.
For the first half of 2019, the adjusted net income in Networks of $267 million was $13 million lower than the same period in 2018 with all of this difference arising in the second quarter. Now moving to slide 19, we provide the results and key drivers for the Renewables quarterly and year-to-date results and comparisons for the same periods in 2018.
现在，在接下来的几张幻灯片中，我将提供有关业务部门影响的更多详细信息。 Slide 18总结了Networks在2018年同期的季度和年初至今结果和比较的结果和关键驱动因素。对于第二季度，您可以看到Networks的业绩与上一季度相比下降了1300万美元。调整后净收入为6600万美元，每股收益为0.21美元。
As I mentioned earlier, our Renewables segment was a key driver for the year-over-year decline in earnings, although the quarter-over-quarter decline was much smaller due to several offsetting factors. Quarter-over-quarter Renewables adjusted net income declined $4 million or $0.01. Wind production was approximately 3% higher quarter-over-quarter. However, wind production showed a flat earnings impact in the quarter-over-quarter change because we saw higher production in the lower-price merchant facilities and lower production in the higher-price contracted facilities with the two impacts offsetting one another.
Renewables' results were negatively impacted in the second quarter by pricing largely driven by the change in status of projects that moved from contracted to merchant, including the FirstEnergy Solutions bankruptcy effects that occurred in 2018. Consistent with our expectations PTCs are rolling off, with a $0.03 negative impact for the quarter, but will be replaced with new PTCs as the Patriot Wind project and 763 megawatts of assets under construction go into service later this year.
We're also showing an $0.08 positive impact quarter-over-quarter in the other category. This contains a number of items including minority interest, a $0.04 onetime benefit from a change in methodology for calculating asset retirement obligation and a small gain related to last year's sale of transmission service rates. The gain from sale of last year's transmission service rates is approximately $0.01 and was tied to meeting certain milestones that occurred this year.
Impacts for the year-over-year comparison are similar and significantly impacted by the very low wind production in the first quarter. Partially offsetting these impacts are the first quarter Klamath optimization and trading margins, resulting from higher prices and volatility in the Northwest with the exceptionally cold winter as well as the ongoing impact of the repair of a Canadian pipeline rupture.
Now moving to slide 20, we show corporate quarterly and year-to-date results in comparison with the same periods in 2018. The corporate segment reported a negative $29 million of adjusted net income or $0.09 per share negative. This is a $0.03 per share decline quarter-over-quarter, primarily reflecting the $750 million green bond that we issued in May at an interest rate of 3.8%. The first half year-over-year comparison also included positive tax impacts of approximately $0.05 due to a first quarter positive discrete tax item and a favorable year-over-year change in the consolidating tax rate adjustment.
AVANGRID's consolidated effective tax rate for the first half was approximately 19.6% before discrete items and that's largely in line with the first quarter. Now the next few slides show some further details on the factors impacting Renewables earnings performance. On slide 21, we showed some statistics on wind production for the first half of 2019 compared to the first half of 2018. Some quick takeaways from this slide are lower production in the Mid-Continent and West and slightly higher production in the Northeast.
可再生能源的结果在第二季度受到负面影响，主要是由于从合同到商家的项目状态发生变化，包括2018年发生的FirstEnergy Solutions破产影响。根据我们的预期，PTC正在推出，该季度的负面影响为0.03美元，但随着Patriot Wind项目和763兆瓦的在建资产将于今年晚些时候投入使用，将被新的PTC取代。
Overall wind capacity factors are down 7% or 2.3 percentage points for the first half year-over-year. Over the second half of the year, we're assuming a total of 8.7 terawatt hours of production with the third quarter representing the lower portion of that total due to the seasonality of the wind resource and the additional wind resources coming online mainly in the fourth quarter.
Now moving to slide 22, we provide some details on pricing trends. Our overall average prices declined by 8% for the first half of 2019 compared to the first half of 2018. This reflects a number of factors including the expiration of PPAs where we rolled the project revenues into the lower-priced merchant market, the change in status resulting from last year's FirstEnergy Solutions bankruptcy as well as declines in merchant and REC pricing. Merchant and REC pricing declined by 19% for the period with merchant prices declining primarily in the West during the second quarter and REC revenues declining in the Northeast and Mid-Continent.
Now turning to slide 23, we included a slide this quarter to demonstrate our hedging strategy, which is to minimize our price risk by contracting for new projects and recontracting our hedging for projects with expiring PPAs. In combination, we target approximately 75% to 85% of our generation output to be covered by PPAs or hedges. You can see in the slide that our combined PPAs and hedges start -- the range of those start at 80% in 2019, 78% in 2020, 74% in 2021 and 70% in 2022.
All new projects going into service in 2019 are contracted and included in this graph. However, the new projects going in service between 2020 and 2022 are not included. Those projects all have PPAs and therefore will increase the portion of the portfolio covered by PPAs and hedges. All expirations of existing PPAs and hedges are already reflected in this graph and we've not included new short-term hedges that we expect to enter into as we move through time.
I also want to note that we did not include PTCs as a hedge for purposes of this reporting. Some argue that PTCs because of the size of the funds received from that should be counted as a hedge. We take the more conservative route and did not include those in our measurement.
Now on slide 24, we show our revised guidance ranges for 2019 of $2.18 to $2.28 for earnings per share under GAAP and $2.25 to $2.35 for adjusted earnings per share under U.S. GAAP and those are further broken down by business segment. For Networks, we're lowering the top end of the range by $0.03 to reflect the continued costs we're seeing related to non-deferrable minor storms and staging costs, plus anticipated negative impacts from resolution in New York for our 2018 storm proceeding, partially offset by benefits we expect from our Forward 2020+ mid period assessment process. This range continues to assume a favorable resolution in 2019 of the pending FERC ROE decision, which is estimated at $0.06 in our guidance.
In our Renewables business segment, we're bringing down the top end of the range by $0.02 due to low wind resource and weather in the first half of 2019, which was $0.09 below expectations and anticipated impacts from delays in COD of our 2019 projects, although we expect benefits from the Forward 2020+ process to partially mitigate these impacts. This range continues to assume a benefit of $0.05 to $0.10 per share related to asset sales and partnerships and I'm happy to report that wind resource through yesterday is in line with our expectations. So we're off to a good start for the third quarter in Renewables.
现在转向第23页，我们在本季度进行了一次下滑，以展示我们的对冲策略，即通过签订新项目合同以及重新对付已到期的PPA项目的套期保值来最小化我们的价格风险。结合起来，我们将目标产量的约75％至85％用于PPA或对冲。您可以在幻灯片中看到我们的组合PPA和对冲开始 - 其范围从2019年的80％，2020年的78％，2021年的74％和2022年的70％开始。
现在在幻灯片24中，我们显示我们修订后的2019年指导范围为每股收益2.18美元至2.28美元，美国公认会计原则下每股调整后每股盈利2.25美元至2.35美元，并按业务分类进一步细分。对于Networks，我们将该范围的最高端降低了0.03美元，以反映我们看到的与不可延迟的小风暴和分期成本相关的持续成本，以及纽约对2018年风暴程序的解决方案的预期负面影响，部分抵消了我们对Forward 2020 中期评估流程的预期收益。该范围继续在2019年的待决FERC ROE决策中取得有利的解决方案，在我们的指导中估计为0.06美元。
在我们的可再生能源业务部门，由于2019年上半年风力资源和天气较低，我们将该系列的最高端降低了0.02美元，比预期低0.09美元，以及2019年项目COD延迟的预期影响，虽然我们预计Forward 2020 流程的好处可以部分缓解这些影响。该范围继续假设与资产销售和合作伙伴关系相关的每股0.05美元至0.10美元的利益，我很高兴地报告，昨天的风力资源符合我们的预期。因此，我们在可再生能源的第三季度开局良好。
Finally, we adjusted downward the upper end of the Corporate range by $0.01 to reflect lower inter-company interest income from the Renewables and Networks segments. That said, it's also important to acknowledge that our performance versus guidance over the remainder of the year has risks and opportunities as Jim noted earlier.
Now on slide 25. This slide demonstrates that our credit ratings remain strong and we highlight the recent upgrade of CMP to an A rating by S&P. Our dividend policy remains unchanged targeting 65% to 75% of net income. And as Jim has noted, the Board recently approved the $0.44 per share quarterly dividend payable October 1.
On the next slide, we wanted to highlight that we continue to pursue our sustainability objectives and green financing strategy and have executed a $750 million green bond in May. This was our second green bond we now have a total of $1.35 billion in green bonds outstanding and that's in addition to our $2.5 billion sustainability-linked credit facility. We recap that we've made ambitious and sector-leading carbon-reduction pledges, including a target of carbon neutrality by 2035.
Thank you. And with that, I'll now hand the call back to our operator Twanda for questions.
Thank you. [Operator Instructions] Our first question comes from the line of Praful Mehta with Citigroup. Your line is open.
谢谢。 [操作员说明]我们的第一个问题来自花旗集团的Praful Mehta。 你的线是开放的。
Thanks so much. Hi, guys.
So maybe the first question on the wind capacity factor just so we understand. On slide 21, when we look at the second quarter wind capacity factor, it looks like it's pretty close to the expectation or what you have in the estimate of around 34%. Is that a fair way to understand how the wind performed in Q2?
所以也许关于风能系数的第一个问题就是我们理解的。 在幻灯片21上，当我们看第二季度风能系数时，看起来它非常接近预期，或者你估计的估计值约为34％。 这是理解第二季度风如何表现的公平方式吗？
Yes, I think in the second quarter, Praful, we saw the wind was actually down off about a little over 3%. Overall, our production was off about 9%. So the wind actually was better but we had something the new construction we had and this is against our expectations.
The new construction we had like for Patriot Wind, we assumed it was going to begin in May and that was a project that we were buying at COD. Well, there were delays related to mainly weather in Texas because of the very wet spring and it caused construction delays and we actually saw this at our Karankawa site as well.
So, that cost is about 4% of the new construction, but the wind resource was a little better. We have maintenance that always contributes a little bit and then other external factors but -- yes, the wind resource was really off about 3%. I don't know Laura do you want to add anything?
是的，我认为在第二季度，Praful，我们看到风实际上下降了大约3％多一点。 总体而言，我们的产量下降了约9％。 所以风实际上更好，但我们有一些新的建筑，这是违背我们的期望。
我们喜欢Patriot Wind的新建筑，我们假设它将于5月开始，这是我们在COD购买的项目。 嗯，由于春天非常潮湿，德克萨斯州的天气主要受到延误，导致施工延误，我们实际上也在Karankawa工地看到了这种情况。
因此，这个成本约占新建筑的4％，但风力资源要好一些。 我们的维护总是有所贡献，然后是其他外部因素，但是 - 是的，风资源实际上已经下降了大约3％。 我不知道劳拉你想加点什么吗？
No, I think that's absolutely right. And of course it's regional. We definitely saw lower wind in the Midwest region that persisted, but it was up relative to the other regions from Q1.
不，我认为这是绝对正确的。 当然，这是区域性的。 我们确实看到中西部地区的风力持续下降，但从第一季度开始相对于其他地区的风向上升。
Got you. That's helpful. And just it sounds like Q3 is off to a better start, so the belief that your updated way to approach expected capacity factors for the wind resource are still reasonable is fair?
有你。 这很有帮助。 而且听起来Q3是一个更好的开始，所以相信你更新的方式来接近风资源的预期容量因素仍然合理是公平的吗？
Yes, I think what we're updating and saying right now is -- I don't know Laura, do you have on the capacity factors, I mean we're looking at almost 31% for the first half. Keep in mind that the third quarter is our lowest quarter for production and the fourth quarter kind of is above that. It can be a little better but -- so Laura anything else?
是的，我认为我们现在正在更新和说的是 - 我不知道劳拉，你对容量因素有所了解，我的意思是我们上半年看起来几乎是31％。 请记住，第三季度是我们生产的最低季度，第四季度是高于此水平。 它可能会好一点但是 - 劳拉还有什么别的吗？
No, I think that's exactly right. I think Doug mentioned that we are forecasting 8.7 terawatts for the second half of the year and that does represent our historical life-to-date which when we talk to our expert that really does remain the best way to estimate wind production.
Got you. thank you. And then just quickly following up on the sales and partnerships. Clearly that's $0.05 to $0.10 as you mentioned for 2019. How has the progress been on that? Has the interest level continued to be good in terms of the ability to sell these development projects? And when should we hear something more on that front?
有你。 谢谢。 然后快速跟进销售和合作伙伴关系。 很明显，正如你在2019年所提到的那样，0.05美元到0.10美元。如何取得进展呢？ 在出售这些开发项目的能力方面，利益水平是否仍然良好？ 什么时候我们应该在这方面听到更多的东西？
Yes, the progress is going along okay. We're seeing quite a bit of interest in activities with partnerships and looking at development project opportunities for sales. So, we're pretty optimistic. I would expect it's probably -- it's going to be the latter part of the third quarter if not the fourth quarter before we'll have something to talk about.
是的，进展顺利进行。 我们看到对合作伙伴关系的活动有相当大的兴趣，并关注销售的开发项目机会。 所以，我们非常乐观。 我预计这可能是 - 如果不是第四季度，那么它将成为第三季度的后半部分，然后我们才能谈论这个问题。
Got you. Thank you so much guys.
Thank you. Our next question comes from the line of Julien Dumoulin-Smith of Bank of America. Your line is open.
谢谢。 我们的下一个问题来自美国银行的Julien Dumoulin-Smith。 你的线是开放的。
Hey, good morning. Can you hear me?
Yes, we can. Hi Julien.
Hey, good morning. Wanted to clarify here just in terms of the cost savings and how you think about the sustainability of those going forward? Maybe even as you think about them being a run rate into the next year. I know we're not quite at the guidance conversation yet for 2020, but just want to have a little bit more of a context as we roll forward here?
嗨，早安。 想在这里澄清成本节约以及您对未来可持续发展的看法？ 也许即使你认为它们是明年的运行率。 我知道我们还没有参加到2020年的指导对话，但是我们在这里向前推进时只是想要更多的背景？
Yes, we looked at it that what we're doing this year a good chunk of it is just reducing budgets and cutting costs. But we feel that what we're having seeing this year about 40% of that's going to be sustainable going forward and we see a run rate as I said of about $100 million into 2020 of savings and additional revenue efficiency. However, you want to characterize it we see it being around $100 million into 2020.
So, there are different added things that we're working on right now that we're not going to get the benefit until we get into 2020 such as robotic automation. Those type of things we're building the software now to be able to implement that, which will give us savings in processes and the technology is going to improve things for us. So, that is one example.
So, we're looking at about 40% of what we can do now and then -- will be sustainable then we're going to add to that and -- throughout this year so that when we hit 2020, we should see a run rate of about $100 million.
是的，我们认为今年我们所做的很多只是减少预算和削减成本。 但我们认为，今年我们所看到的大约有40％将是可持续发展的，我们看到了一个运行率，因为我说到2020年的节约和额外的收入效率约为1亿美元。 但是，你想要描述它，我们认为它到2020年将达到1亿美元左右。
因此，我们现在正在努力的是，在我们进入2020年（例如机器人自动化）之前，我们不会获得好处。 我们正在构建软件的那些类型的东西现在能够实现它，这将为我们节省流程和技术，将为我们改进。 所以，这就是一个例子。
因此，我们正在考虑我们现在可以做的大约40％ - 然后 - 将是可持续的，然后我们将增加到这一点 - 在整个今年，以便当我们到2020年时，我们应该看到一个运行 费率约1亿美元。
Got it. Okay. Fair enough. Now, if I can move back I think you said it was 19% decline in merchant and REC can you give a little bit more context on where you're seeing that?
And again, just to kind of ask that question, how do you think about that rolling forward here, especially given your updated disclosures here on Slide 23? If there's any good way to describe that in aggregate kind of a net impact going forward?
得到它了。 好的。 很公平。 现在，如果我可以退回去，我认为你说商家减少了19％，你可以给出更多关于你所看到的内容的背景吗？
Yes. You're talking of pricing changes year-over-year correct?
Yes, yes. And how you see that kind of manifesting itself on a go-forward basis given the heads-up there?
Correct. I think Slide 40 is helpful Julien for that. We detail in there by region for the price changes that's happened year-over-year and you can see in the Northeast and particularly with RECs, we saw a big decline in pricing there. With merchant prices we saw in the West, a fairly sizable decline as well. So as far as the forward-looking view, I think, probably Laura you might be best to comment on...
正确。 我认为幻灯片40对Julien很有帮助。 我们按区域详细说明了年复一年发生的价格变化，你可以看到东北地区，尤其是REC，我们看到那里的定价大幅下降。 我们在西方看到的商业价格也出现了相当大的下降。 因此，对于前瞻性观点，我认为，可能劳拉你可能最好评论......
And maybe let me clarify too, I mean, because I see the slide 40, but how do you think about that sort of manifesting in your own results i.e. where are you disproportionately hedged or under-hedged or how do you want to think about taking these merchant numbers and translating it back into your -- the exposures that we should be thinking about on an open basis? I.e. what is the unhedged piece maybe is the better way to ask that as you think about 2020 to 2022?
也许让我澄清一下，我的意思是，因为我看到幻灯片40，但你如何看待你自己的结果中的那种表现，即你在哪里不成比例地对冲或未对冲，或者你想如何考虑采取 这些商家号码并将其转化为您 - 我们应该在开放的基础上考虑的风险？即 什么是未对冲的作品可能是你想到2020年到2022年的更好的方式？
Well, when we look -- yes, Laura go ahead.
好吧，当我们看 - 是的，劳拉继续前进。
No, go ahead I was going -- I can kind of walk you through just overall our hedging strategy if that's helpful. In the WEC our merchant capacity is primarily in the Northwest and we manage this merchant capacity as part of our Pacific Northwest portfolio, which as you know is part of a balancing authority. We have a hydro slice. We have C&I customer load that we're managing. And so the depths of the mid-sea market really does allow us to actively hedge that out into the curve.
In ERCOT, we typically have not sold forward fixed price against variable wind just due to the $9,000 per megawatt hour price cap. However, we have recently entered into volumetric swap transactions and this will allow us to firm up that generation and just provide us some additional flexibility to further hedge there. Outside of that I think you're aware we'd utilize natural gas to hedge our Gulf Coast merchant wind there.
In the Midwest from our perspective the market hedges are illiquid and effective -- ineffective. And really it's because Midwest prices are and just continue to be so low. Often we see them in the high-teens. And so market hedges at this level really don't protect any downside but they limit all of your potential upside. And so we really don't have much hedging activity there.
In the Northeast, I break it out really into New York and to PJM. In New York, our assets are in Zone E and this pricing zone is really illiquid and if we tried to hedge with an alternative zone like A or G it creates more basis risk than the existing price risk. So that's why those remain unhedged.
In PJM most of our price risk is correlated with hubs that are fairly liquid for 10 years inside of a year, but the liquidity really decreases when you get out further in the curve and that's why we keep those to shorter-term hedges. Does that help Julien?
不，继续我的目标 - 如果有帮助的话，我可以通过我们整体的对冲策略来指导你。在WEC，我们的商业能力主要在西北地区，我们作为太平洋西北地区投资组合的一部分管理这种商业能力，正如您所知，这是平衡权威的一部分。我们有一个水力切片。我们有C＆I客户负载，我们正在管理。因此，中海市场的深度确实让我们能够积极地将其转化为曲线。
从我们的角度看，在中西部，市场对冲是非流动性和有效的 - 无效。实际上，这是因为中西部的价格只是继续如此之低。通常我们会在十几岁的时候看到它们。因此，在这个水平上的市场对冲确实不会保护任何下行空间，但它们会限制您所有的潜在上行空间。所以我们真的没有那么多的对冲活动。
Please. So maybe what I'm -- just to clarify that the updated volumetric swap transactions that you just talked about for ERCOT that's already reflected in the 2020 to 2022 outlook right?
请。 那么也许我就是 - 只是为了澄清你刚刚谈到的ERCOT更新的体积互换交易已经反映在2020年到2022年的展望中了吗？
Yes, those are one year hedges right now the transaction – swap..
是的，那些是现在一年的套期保值交易 - 交换..
Yes. That's short term, Julien and we just did that recently I think within the last couple of months. So -- and it was more we're testing the market to see how it actually would perform and we're using just at one of our wind farms. So we want to make sure that it was going to work as effectively as we thought it would. And so it's more of a test case and we're seeing that it actually is proving to be rather effective.
是。 那是短期的，Julien和我们最近刚刚在最近几个月内做到了这一点。 所以 - 我们正在测试市场，看看它实际上是如何表现的，而我们只是在我们的一个风电场使用。 因此，我们希望确保它能够像我们想象的那样有效地工作。 因此，它更像是一个测试案例，我们发现它实际上证明是相当有效的。
Got it. Okay. So I think we got a good sense on where you got the exposures. Excellent. I will leave it there. I will let others to have.
得到它了。 好的。 所以我认为我们对你获得曝光的地方有了很好的认识。 优秀。 我会留在那里。 我会让别人拥有。
Thank you. Our next question comes from the line of Christopher Turnure with JPMorgan. Your line is open.
谢谢。 我们的下一个问题来自于摩根大通的Christopher Turnure系列。 你的线是开放的。
Good morning, guys.
Jim, could you give us a little bit more color on the BOEM permit comment that you made? I think your original expectation was that you would get the final EIS by 2Q and then actually get the approval from the agency by 3Q and you're saying now within the next couple of weeks you expect a certain component of that but if that doesn't happen then the plan could shift out?
吉姆，你能否在BOEM许可评论上给我们一点颜色？ 我认为你最初的期望是，你会在第二季度获得最终的EIS，然后在第三季度实际获得该机构的批准，你现在说在接下来的几周内你会期望某个组成部分，但如果那不是' 那么计划可能会转移出来吗？
Yes, what we said originally we had worked with BOEM to get the -- they were going to issue the permit or at least the final EIS early in July and then get -- the record of decision would have come in August. It's been delayed right now, but we're still working with them and pretty confident that we can get something done by the end of August and that will keep us on track with our time frame. So that was the time frame we had and like I said we're working with them right now.
是的，我们最初说我们曾与BOEM合作过 - 他们将在7月初签发许可证或至少发布最终的EIS然后获得 - 决定的记录将在8月份公布。 它现在已被推迟，但我们仍在与他们合作并相信我们可以在8月底之前完成某项工作，这将使我们的时间框架保持正常。 所以那是我们的时间框架，就像我说我们正在与他们合作。
Okay. And is there another kind of date we should think about where you would only delay the project by a matter of weeks or months if you didn't get the permit by that date?
Well, I think what we said was it would be challenging to move forward if we don't get the final EIS in the next four to six weeks. That having been said it doesn't mean the project is dead by any stretch. It just means we're going to have to reconfigure things to do something differently. So Laura, do you want to add anything to it?
好吧，我想我们所说的是，如果我们在接下来的四到六周内没有获得最终的EIS，那么向前推进将是一项挑战。 据说这并不意味着该项目在任何时候都已经死亡。 这只意味着我们将不得不重新配置事物以做不同的事情。 劳拉，你想添加任何东西吗？
No. I mean I think to your point Jim really right now we are absolutely focused on getting to resolution under the current configuration and maintaining to the current schedule. If we're required to I think we'll look at other alternatives, but really our focus remains on maintaining our current schedule and working through these issues.
Okay. And then my second question is on the dividend. I think last July in the middle of the month you had done your first dividend increase in a number of years and you mentioned that payout in absolute dividend should go up and roughly in line with EPS growth given your long-term 8% to 10% EPS growth guidance is kind of maybe to pause last week a pause or is it a change in dividend strategy?
好的。 然后我的第二个问题就是红利。 我认为去年7月你已经在几个月内完成了你的第一次股息增长，并且你提到绝对股息的支出应该会上升并且大致与每股盈利增长保持一致，因为你的长期利率是8％到10％ 每股盈利增长指引有可能暂停上周暂停，还是股息策略的变化？
No. There's no change in the strategy. It's just looking at what is the best timing for increase looking at dividend changes and making sure we're within the 65% to 75% payout ratio that we're looking at going forward. So this year with our guidance, we're not quite there and so we want to have the board look at it and we'll probably review it quarter-by-quarter now going forward.
不，战略没有变化。 它只是看看增加股息变化的最佳时机是什么，并确保我们在未来看到的65％到75％的支付率。 所以今年在我们的指导下，我们还没有完全实现这一目标，所以我们希望让董事会对其进行审视，我们可能会在今后逐季对其进行审核。
Okay, great. Thank you.
But no change in the philosophy or policy.
Thank you. Our next question comes from the line of Insoo Kim with Goldman Sachs. Your line is open.
谢谢。 我们的下一个问题来自Insoo Kim与Goldman Sachs的合作。 你的线是开放的。
Thank you. Just one follow-up question to the Forward 2020 cost savings plan, any rule of thumb on how we should break up those savings among the various segments, and also just longer term your ability to keep those savings especially at the Networks segment?
Yeah. I think if you look at it at least this year it's about 35%, 40% is in the Networks and 30-plus percent in the renewables and corporate. So it's kind of split almost evenly among the three.
Going forward it's our -- as a public utility it's our obligation to operate as efficiently as we can. And 2019 we'll be able to retain the savings. Going forward it's going to be -- we'll be working with the staff of the commissions to figure out what gets flowed through and what doesn't. They’ll set rates based on some assumptions and then we have sharing mechanisms too primarily in New York and other jurisdictions Connecticut.
That really those are designed to capture these type of things where if you start over-earning because of cost savings earnings then they get flow back to the customers. So it's our job to make sure we're operating efficiently and that's what we're going to do. The things in corporate and then in renewables some of those savings particularly renewables for sure, I mean those flow to our bottom line. In corporate some of those get allocated some retained in corporate and some go back to the different businesses whether Networks or renewables.
展望未来 - 作为公共事业，我们有义务尽可能高效地运营。 2019年，我们将能够节省开支。展望未来 - 我们将与各委员会的工作人员合作，弄清楚什么是流过的，什么不是。他们将根据一些假设设定利率，然后我们也主要在纽约和康涅狄格州的其他司法管辖区分享机制。
Understood. And in terms of the minor storms and staging costs, so far this year it seems like you're commenting that they are part of the reason for the lowering of the top end of the guidance. Does that mean that those storm costs are running above what you've already embedded when you gave the guidance in February?
了解。 就小风暴和分期费用而言，今年到目前为止，您似乎在评论它们是降低指南最高端的部分原因。 这是否意味着当你在二月份提供指导时，那些风暴成本高于你已经嵌入的成本？
Yeah. They actually are running a little bit ahead. I don't know Bob, Tony you guys want to comment on that?
是啊。 他们实际上正在向前迈进一步。 我不知道Bob，Tony你们想对此发表评论吗？
Yeah. Sure. This is Tony Marone. So those costs are running above what we had previously thought they're running ahead right now by about $11 million. We do have some offsets though that we're allowed to take that should reduce the exposure on that. We have two issues; one, is that we've got quite a more few more storms year-to-date, 36 storms and 19 minor storms non-deferrable minor storms versus 26 in 2018. So that difference plus a bit more aggressive staging to make sure that we're being responsive to the needs particularly in New York. So those are the two factors.
是啊。 当然。 这是Tony Marone。 因此，这些成本高于我们之前认为他们现在提前约1100万美元的成本。 我们确实有一些抵消，虽然我们被允许采取这一点应该减少暴露。 我们有两个问题; 其中一个原因是，我们今年迄今为止风暴的次数增加了不少，36次暴风雨和19次轻微暴风雨，而不是可以避免的次要风暴，而2018年则是26次。所以这种差异加上更具侵略性的分期以确保我们 特别是在纽约，我们正在满足需求。 所以这是两个因素。
Understood. And maybe one final one. On offshore wind, assuming the offshore wind ITC rollout and I guess exploration is not extended; do you continue to plan for that couple of hundred bps over the cost of capital when bidding on future projects?
了解。 也许最后一个。 关于海上风电，假设海上风电ITC推出，我猜测勘探没有延长; 在对未来的项目进行投标时，你会继续计算资本成本上的那几百bps吗？
When we look at future projects, it depends on the time frame when they could be operational. And if the ITC -- we're assuming right now it's not -- there's no provision for it to be extended beyond the current time frame, which I think is 2023 where it phases down -- phases out actually. So we will bid based on what the law is at that time and when we think we can get the project operational.
当我们研究未来的项目时，它取决于它们可以运作的时间范围。 如果ITC - 我们现在假设它不是 - 没有规定将其扩展到当前时间范围之外，我认为它是2023年逐渐减少 - 实际上逐步淘汰。 因此，我们将根据当时的法律以及我们认为可以使项目运作的时间出价。
Understood. Thank you.
Our next question comes from the line of Angie Storozynski with Macquarie. Your line is open.
我们的下一个问题来自Angie Storozynski和Macquarie。 你的线是开放的。
Questions, are you seeing any benefit from lower interest rates on your corporate drag? So you're issuing bonds seemingly at lower interest coupons -- on lower coupons than we had expected? And I'm not seeing any change in the guidance for the corporate level drag
问题，您是否看到公司阻力降低利率会带来什么好处？ 所以你发行的债券看似利息较低 - 优惠券价格低于我们的预期？ 而且我没有看到公司层面拖累指导方面的任何变化
Well we are seeing lower interest rates than what we had anticipated. I don't know Doug you want to…?
Yeah, I'd just add at the corporate level though we had hedged the 10-year treasury rate prior to issuance. So basically the all-in yield on that 3.8% coupon is a little under 4.5% and that was largely in line with our expectation risk. When you look at say the Networks level where we also have some debt issuance, we are seeing benefits in that section. We don't hedge the treasury rate for that portion.
是的，虽然我们在发行前已经对冲了10年期国债利率，但我只是在公司层面加入。 因此，基本上3.8％息票的全部收益率略低于4.5％，这基本符合我们的预期风险。 当你看到我们也有债务发行的网络层面时，我们看到了该部分的好处。 我们没有对冲该部分的国债利率。
Okay. And just one other follow-up. On the FERC ROE, can you elaborate again what this $0.06 EPS impact is and how it's embedded in the guidance?
好的。 还有一个跟进。 在FERC ROE上，您能再次详细说明这个0.06美元的EPS影响是什么以及它如何嵌入到指南中？
The $0.06 would come from previously -- it's the change in the rate that we have for ROE what we had booked against the modifications that were made and then what we had reserved in the past and then going forward being able to then capitalize on the higher cap rate that we would see, which is the 13.09% versus the 11.74% that's in place for cap today. So, those -- there's a number of factors there that would enter into it.
0.06美元将来自之前 - 这是我们对ROE的汇率变化我们已经根据所做的修改预订了什么，然后我们过去保留了什么然后继续可以利用更高的资金 我们将看到的上限利率，即13.09％，而今天的上限为11.74％。 所以，那些 - 那里有许多因素会进入它。
But meaning this is -- again this is just potential upside to your guidance? Or you have a certain scenario already embedded in 2019 guidance?
但这意味着 - 这又是你指导的潜在好处吗？ 或者您已经在2019年的指导中嵌入了某种情景？
We have it in our guidance.
Okay. Thank you.
We have that $0.06 in our guidance yeah.
Our next question comes from the line of Praful Mehta with Citigroup. Your line is open.
我们的下一个问题来自花旗集团的Praful Mehta。 你的线是开放的。
Hi guys. Thanks. I just had a quick follow-up question. So thanks for taking my question. In terms of the cost-saving initiative which you have already touched on just want to understand, how much is in the plan right now and how much is incremental?
嗨，大家好。 谢谢。 我刚才有一个快速的跟进问题。 谢谢你提出我的问题。 您已经触及的只是想了解的节省成本的计划，现在计划中有多少，增量是多少？
In the plan for this year Praful, we have $70 million to $85 million for this year, for 2019. And most of that is in the second half. Going forward for 2020 and beyond in our plan -- our long-term plan that we put out in February of this year, I don't believe, we had any savings in there.
在今年Praful的计划中，我们今年有7000万到8500万美元，2019年。其中大部分是在下半年。 在我们的计划中展望2020年及以后 - 我们在今年2月推出的长期计划，我不相信，我们在那里有任何节省。
Got you, so, anything incremental that you have as a run rate that you've talked about in the presentation, that is incremental to the plan that you've already presented?
Yes. But keep in mind that a lot of that. When you look at savings we get will allow us to reach -- be able to hit the ROE targets we have or maybe exceed them. So, keep that in mind as you're looking at it.
是。 但请记住很多。 当你看到我们获得的储蓄将使我们能够达到 - 能够达到我们所拥有或可能超过它们的ROE目标。 所以，在你看的时候记住这一点。
Sorry just so I understand the -- I'm assuming that the plan already had some ROE assumption in there. And so are you saying that this would -- this saving would help you improve on that, as in, get to the upper end of it or just so I understand how you're characterizing the benefit on a long-term basis?
对不起，我理解 - 我假设该计划已经有了一些ROE假设。 所以你说这会是这样的 - 这种节约会帮助你改进，例如，进入它的上端，或者只是让我理解你是如何长期表征利益的？
In the plan for the long-term that we put out in February, we assumed we would earn at the allowed ROE levels only for every jurisdiction going forward and this would be 2020 and beyond, not 2019. Because we knew we're going to file in New York.
So this will aid us in getting to the allowed return, if not going a little bit above that depending on how we manage things. It also isn't just in Networks it also applies to Renewables as well.
So, a chunk of that, probably 30% is Renewables-oriented just as about 30% is Corporate, so a lot of those a little different than what you might have expected.
And those would be incremental to…
… what we had in the long-term projection.
All right, and those incremental piece is obviously there's no giving back that piece. So those should be more sustainable and should show up as incremental upside versus the plan, those two other pieces? The non…
好吧，那些增量的部分显然没有回馈那件作品。 那么这些应该更具可持续性，并且应该表现为与计划相比的增量上升，那两个其他部分？ 非......
Yeah for Renewables and the Corporate portion that gets allocated to Renewables.
Perfect. Well I appreciate it. Thank you, guys.
完善。 我很感激。 感谢你们。
We have a follow-up from Julien Dumoulin-Smith from Bank of America. Your line is open.
我们接受了美国银行Julien Dumoulin-Smith的跟进。 你的线是开放的。
This is Alex for Julian Dumoulin-Smith. How are you guys?
这是亚历克斯为朱利安杜穆林 - 史密斯。 你好吗？
How are you doing?
Doing well thanks for taking my question. I just had two quick follow-up questions. First on Networks, I was wondering what the impact of billing issues in Maine is on your expected authorized ROE?
And then my second question is, if you could provide any more details on that $0.08 positive impact in Renewables related to the one-time items and the asset retirement obligation adjustment? Kind of maybe what we should think about going forward with that $0.08 impact? Thank you.
好好谢谢你回答我的问题。 我刚刚有两个快速的后续问题。 首先在网络上，我想知道缅因州的计费问题对您预期的授权ROE有何影响？
然后我的第二个问题是，您是否可以提供有关一次性项目和资产退休义务调整的可再生能源0.08美元正面影响的更多细节？ 也许我们应该考虑以0.08美元的影响继续前进？ 谢谢。
Yeah. Alex in Maine the commission staff came out with a bench analysis. Came out to say that they were recommending a -- I think it was 75 to 100 basis point reduction in the ROE, to reflect the issues around the customer service that happened.
So if we take that into consideration then it would be for the time. I think they said it would be for one year until -- to demonstrate that we had improved on and gotten things back on track. I don't know Tony about you?
是啊。 在缅因州的亚历克斯委员会工作人员出来了一个板凳分析。 结果说他们推荐了 - 我认为ROE降低了75到100个基点，以反映发生的客户服务问题。
因此，如果我们考虑到这一点，那么它将是时间。 我认为他们说这将持续一年，以证明我们已经改进并让事情重回正轨。 我不知道托尼关于你的事？
Yeah. No Jim I think you characterized it well. The bench analysis which is a recommendation of staff based on the discovery so far made that recommendation. There were two bench analysis that occurred and both retained that recommendation for that 75 to 100 basis point reduction.
And it was for a period of 12 months of demonstrated improvement in performance whereby which there could be a mechanism for us to re-file for new rates.
The case is underway and matters of fact hearings in Maine start today and are occurring this week. So, this is a preliminary recommendation from staff. And we still have a long way to go on this case. But right now the decision is expected for October and so there's still some more time on it.
是啊。 没有吉姆，我觉得你很好。 基于迄今为止的发现的工作人员建议的工作台分析提出了该建议。 发生了两次实验室分析，并保留了75至100个基点减少的建议。
案件正在进行中，缅因州的事实听证会从今天开始，并在本周发生。 所以，这是工作人员的初步建议。 我们还有很长的路要走这个案子。 但是现在这个决定预计将在十月份进行，所以还有更多时间。
And I'll say that the -- many of the metrics that the staff focused on in particular the speed of answer on customer calls. Those metrics we have been meeting throughout this year. So I think we've made very good progress prospectively. It's now just a question of how do we deal with the pieces associated with -- I mean these issues are really issues that came about in winter of 2017-2018 and through calendar year 2018. Doug do you want...
而且我会说 - 工作人员关注的许多指标，特别是客户电话的答复速度。 我们在今年全年开会的那些指标。 所以我认为我们未来取得了很好的进展。 现在只是一个问题，我们如何处理与之相关的问题 - 我的意思是这些问题实际上是2017-2018冬季和2018年的问题。道格你想要......
So, yes, one the $0.08 positive impact in the other category for Renewables that really breaks down $0.04 for the change in the methodology for calculating asset retirement obligation. That's a onetime item. We had about $0.01 impact from the gain on sale of transmission service rights that took place last year. So you could think of that more as part of, say, the $0.05 to $0.10 benefit from partnerships sale of development projects etcetera. And then we also had a $0.03 positive impact. That was the change in minority interest. That's a function of our tax equity financing that we have in place and that's more of an ongoing item.
所以，是的，其他类别的可再生能源的0.08美元正面影响真正打破了0.04美元，因为计算资产报废义务的方法发生了变化。 这是一次性项目。 去年我们对转让服务权的销售收益产生了约0.01美元的影响。 因此，您可以将这一点更多地视为开发项目等合作伙伴销售的0.05美元至0.10美元的一部分。 然后我们还有0.03美元的正面影响。 这是少数人利益的变化。 这是我们已经实施的税收股权融资的一个功能，而这更像是一个持续的项目。
Okay. If I can, just one more quick follow-up question on Networks. I was wondering, what your thoughts are on just the New York Commission in light of potential Con Edison read-through’s with the lower ROE. Do you think that that indicates there is a risk that your ROE, I know, you filed for 9.5% that that could be a little bit lower?
好的。 如果可以，请在网络上再提一个快速的后续问题。 我想知道，你对纽约证券交易委员会的看法是什么，因为潜在的Con Edison通过较低的净资产收益率。 您是否认为这表明您的ROE存在风险，我知道，您申请的9.5％可能会低一点？
Well, I think if you look at the last three or four cases the ROEs have generally come in around 9% with a 48% equity ratio. They vary a little bit and someone got a 50% equity ratio but then they got a slightly lower ROE than 9%. So the staff position have been lower than that in the mid-8s at that time. So I think that's probably from what we're seeing a reasonable area to focus on that kind of 9% 48% equity.
那么，我认为如果你看一下最后三到四个案例，ROE通常约为9％，股权比例为48％。 它们有所不同，有人获得了50％的股权比例，但之后他们的净资产收益率略低于9％。 因此，当时的工作人员职位一直低于8月中旬。 所以我认为这可能来自我们所看到的合理领域，专注于那种9％48％的股权。
Great. Thank you so much and have a great day.
Thank you. You too.
Our next question comes from the line of Martin Young with Investec. Your line is open.
我们的下一个问题来自于带有Investec的Martin Young系列。 你的线是开放的。
Yes, good afternoon to everybody or good morning, I should say. Couple of questions, one is just a clarification on your second half expected output from the Renewables asset. Did you say 8.7 terawatt hours?
And the second question then relates to comments that IBERDROLA were making this morning on their results call in respect of an acceleration of the capacity build out between now and 2022. They have given a pretty clear indication that they expect to be increasing that at next February's Capital Markets Day. Just wondered if you could give some comments on what type of increases, if any, we could be seeing from yourselves? Thanks.
是的，大家下午好，或者早上好，我应该说。 几个问题，一个是对可再生能源资产的下半年预期产出的澄清。 你说8.7太瓦时？
然后第二个问题涉及IBERDROLA今天早上在结果调用中就从现在到2022年之间加速容量建设所做的评论。他们给出了一个非常明确的迹象，表明他们希望在明年2月增加 资本市场日。 只是想知道你是否可以就我们从你自己看到的增加的类型（如果有的话）给出一些评论？ 谢谢。
Yes. Going forward, we will be redoing our forecast and talking about it at our Investor Day in February. So we're not going to be talking about anything at this point in time. And just to add I think we've heard on all of IBERDROLA too so you got to think about what they're saying. But we haven't modified our forecast at all, and the 8.7 terawatt hours that is what we said our expectation for production for the balance of this year -- second half of the year.
是。 展望未来，我们将在2月的投资者日重做我们的预测并谈论它。 所以我们现在不会谈论任何事情。 只是补充一下，我想我们也听说过所有的IBERDROLA，所以你必须考虑一下他们在说什么。 但是我们根本没有改变我们的预测，而且我们在今年下半年表示我们对生产的期望是8.7太瓦时。
But I mean just directionally on the capacity, would it be an increase? This is what you said in February given that you've obviously got some new apps already disclosed today?
No. That was our estimate and we haven't modified it. We're assuming a normal wind production and the introduction of the new capacity that we also had projected now most of that will be at the end of the year.
No. I'm talking about the aspirations between now and 2022. Directionally would you be moving upwards given that you have added a couple of additional projects year-to-date that weren't in the February numbers?
No. We have not modified our projections at this point.
Thank you. Our next question comes from the line of Andrew Levi with ExodusPoint. Your line is open.
谢谢。 我们的下一个问题来自Andrew Levi和ExodusPoint。 你的线是开放的。
Hi. Good morning.
Hi. Actually most of my questions have been asked and answered. Just a few other things or follow-ups. So just on Alex's question, so just understand what you have built in guidance. So in your 9% to 10% growth rate going forward, did you assume that your ROE would stay constant at where it is today?
你好。 实际上我的大部分问题都已被提问和回答。 只是其他一些事情或后续行动。 所以只是在Alex的问题上，所以只要了解你在指导中建立的内容。 那么在你未来9％到10％的增长率中，你是否认为你的净资产收益率会保持在今天的水平？
In our -- we never said Andy. In the 8% to 10% growth, we put out in February this year, we just said we would earn the allowed returns whatever they ended up being…
在我们 - 我们从未说过安迪。 在8％到10％的增长中，我们在今年2月推出了，我们只是说我们将获得允许的回报，无论它们最终是什么......
But I will say if you look at rate base growth it's about 9%. It's consistent with the growth rates.
Yes, we think – assume ROEs might…
是的，我们认为 - 假设ROE可能......
[indiscernible] like an 8.3% ROE so people are thinking like 8.7% so...
And that's not surprising. I think as Bob was mentioning the staff always comes in a little lower.
Okay. And then just on Maine, so you do have this billing issue. Could you just talk about that a little bit more? I mean there's been so much stuff in the press we get, we get articles every day on it. Like can we just get kind of your opinion on it and kind of what happened and the financial impact if any to you?
And also whether there'd be any refund to customers? If you read all this so beyond the ROE potential hit and what penalties if any are possible and how should we think of it on a financial basis we got?
好的。 然后只是在缅因州，所以你确实有这个计费问题。 你能谈谈这个吗？ 我的意思是我们得到的新闻中有这么多东西，我们每天都会收到文章。 就像我们可以对此有所了解，发生了什么事以及对您的财务影响？
Yeah. When -- you look at the billing, we did our own internal audits and reviewed the billing system from the meter all the way to the bill. They hired a -- commission hired a firm to do a forensic audit of the billing system and concluded that it was billing things correctly. The issue really more is for us is the customer service and the fact that we didn't provide the customer service that our customers expect or that we should be delivering. And so, when we look at it from that standpoint that's where we really fell down. And now people look at the bills and say, well, the bills are very high. Well, we had a very cold winter. Every individual has different circumstances, and we need to go through every one of those and work with the customer to make sure they understand what occurred, what happened and so that they can have confidence that actually their bill was correct.
In many cases we didn't -- some of it was our fault, we didn't bill for a couple of months for whatever reason. Customer didn't -- maybe didn't pay the bill on time so they had double bills. I mean, there were all kinds of different circumstances. And we got to work through that with each customer to make sure they understand and they have confidence.
So, Tony and Bob, you can add to it?
在许多情况下，我们没有 - 有些是我们的错，我们没有因为某种原因而花费几个月的账单。客户没有 - 也许没有按时支付账单，所以他们有双重账单。我的意思是，有各种不同的情况。我们必须与每位客户共同努力，以确保他们理解并且他们有信心。
Jim, I think you characterized it extremely well. The most important thing is that the metering and billing systems are producing accurate results. The other issues with the implementation of the system and the amount of estimated bills and so forth and the complications associated with that and our inability or delay in being able to respond to the amount of customer requests that were associated with those changes was significant. But the billing system and the metering system as we have checked that, not only with our own internal audits, but with independent audits, and then now there's really an audit of the audit that is occurring as well. And so far all of those things are continuing to support the fact that the billing system is working properly.
So, we've got several things in place underway right now to improve the customer service for customers and the responsiveness. But at the heart of it, the system is working properly.
吉姆，我觉得你非常好。 最重要的是计量和计费系统正在产生准确的结果。 系统实施的其他问题和估计账单等的数量以及与此相关的复杂性以及我们无法或延迟能够响应与这些变化相关的客户请求数量都很重要。 但是我们已经检查了计费系统和计量系统，不仅通过我们自己的内部审计，而且通过独立审计，然后现在确实对审计进行了审计。 到目前为止，所有这些事情都在继续支持计费系统正常运行的事实。
Great. That definitely explains that. And then just my last question again more kind of looking forward. So, you guys have done a great job with this 2020+ program coming up with $100 million of savings. I guess a portion will go back at some point to the ratepayer which is good for the ratepayer as well.
But just to kind of understand kind of -- again, I know you haven't given guidance for 2020, just the growth rate. But I guess this year you have -- the $0.08 you had in the second quarter, you had some tax optimization in the first quarter. You're going to have some asset sales in the third or fourth quarter. And then if the FERC decides to rule on your ROE issue that will also give another kind of one-timer as well. So, let's call it, like $0.25 to $0.30 of one-timers and then a portion of that -- and then at the same time you're getting $75 million to $80 million of cost savings, which probably was envisioned into next year, but it carries into next year, because I don't think it was part of your guidance for this year originally, but I think after the first quarter, call it, became that.
So you have all these kind of one-time things kind of dropping off to next year. It kind of gets offset -- a portion of it gets offset by the O&M savings and hopefully normal wind production. But then at the same time, you also have lower power prices which we just don't know what's going to happen there, but right now are very, very low.
So how do you kind of bridge into 2020 and kind of makeup these one-timers? Obviously, you have a rate case and all that, but it seems like your ROEs are coming down. So, can you give us -- kind of talk at a very high level, because I know you haven't given guidance, how you're going to offset $0.25 to $0.30 of one-timers that you used this year to make up for some issues that you had?
但只是有点理解 - 再次，我知道你没有给2020年的指导，只是增长率。但我想今年你有 - 你在第二季度的0.08美元，你在第一季度有一些税收优化。您将在第三季度或第四季度进行一些资产销售。然后，如果FERC决定对您的ROE问题做出裁决，那么也会给出另一种单一计时器。所以，让我们称之为，如0.25美元到0.30美元的一次性，然后是其中的一部分 - 然后同时你获得7500万美元到8000万美元的成本节约，这可能是明年设想的，但是它进入明年，因为我认为这不是你今年指导的一部分，但我认为在第一季之后，称之为，成为那样。
因此，你有这些一次性的事情有点下降到明年。它有点被抵消 - 其中一部分被O＆M节省和正常的风力生产所抵消。但与此同时，你也有较低的电价，我们只是不知道那里会发生什么，但现在非常非常低。
那么你如何在2020年和这些一次性化妆品之间架起一座桥梁呢？显然，你有一个利率案例而且所有这一切，但看起来你的净资产收益率正在下降。那么，你能给我们一点 - 在很高的层次上谈话，因为我知道你没有给出指导，你将如何抵消你今年用来弥补的一次性0.25美元到0.30美元你有一些问题吗？
Yeah. Andy, a couple of things. One, when you look at -- we said we would be looking to have asset sales and really redeployment of capital to put it that way. And it's probably going to result in $0.05 to $0.10 per share on a continuous basis. So, we're going to keep working on redeploying our capital and optimizing our portfolio. So, that's going to be ongoing. That's not something that's just going to be one time for this year as the way we see it.
Secondly, the $100 million we're talking about for efficiency savings going forward, that is also going to be helpful in making sure that give us some flexibility, give us some room to be able to make sure we get the growth we're looking for. So, those are two areas that I think we need to focus on.
是啊。 安迪，有几件事。 一，当你看到 - 我们说我们会寻求资产出售和真正的资本重新调配以便这样做。 并且它可能会持续导致每股0.05美元到0.10美元。 因此，我们将继续致力于重新部署资本并优化我们的投资组合。 所以，这将是持续的。 就我们看待它的方式来说，这不是今年的一次。
其次，我们谈到的1亿美元用于提高效率，这也有助于确保给我们一些灵活性，给我们一些空间，以确保我们能够实现我们正在寻求的增长 对于。 所以，这些是我认为我们需要关注的两个方面。
And then, you touched on this Andy as well, but I think if you look at Networks and our performance this year, I mean when we set expectations it was as we talked about based on earn the authorized return except for in New York where we knew we had a one year stay-out period and there would be costs that we'd be incurring that would put a drag on ROE for this year, but would be recouped as we hit new rates next year.
And certainly, you're seeing in the results for the first half, depreciation is a big part of that. As Jim mentioned, we're on target this year with our capital program consistent with expectations for this year and our long-term outlook. There's depreciation attributable to that that we're eating and absorbing for this year that will go forward. But also on the staging and minor storms, there's clearly a higher expectation on the part of customers, local community leaders, our regulators, politicians as it relates to response to storm restoration.
And I think last year, we quite frankly early in the year somewhat struggled with that, but we've done a good job this year, ensuring we had the right resources, either our own resources or contractor resources to be able to respond to storms. I think we've done a very good job this year on that. Obviously, that comes somewhat with a cost. And in our filings that we made, we're looking to adjust the recovery mechanisms not just for major storms, but for minor storms and staging costs, so as to recover those costs. So I think you will see the ability with the next rate case to be able to recover those costs that we're currently incurring that we aren't getting in rates as we speak.
Thank you. Our next question comes from the line of Reza Hatefi with LNZ Capital. Your line is open.
谢谢。 我们的下一个问题来自Reza Hatefi与LNZ Capital的合作。 你的线是开放的。
Thank you, very much. Just I was -- sorry maybe addressed this earlier. I was just a little confused. The Forward 2020 cost cuts they were originally not part of 2019 guidance when you gave it in February, but then on the first quarter, it started rolling into numbers. I'm a little confused on how the sequence of that.
非常感谢你。 只是我 - 抱歉也许早些时候解决了。 我有点困惑。 当你在2月份给出它时，它们原本不属于2019年指导的2020年成本削减，但是在第一季度，它开始变成数字。 我对它的序列有点困惑。
No. We had something in 2019 for savings. We just weren't explicit about how much and we didn't have anything in 2020 and beyond.
Okay. So when you gave -- originally gave 2019 guidance in February, there was some embedded in there, but you just won't explicit it?
好的。 所以当你给出 - 最初在2月给出了2019年的指导时，那里有一些嵌入式，但你只是不明白它？
There was some, yes.
Okay. Okay. I was confused on that. Thank you, very much.
好的。 好的。 我很困惑。 非常感谢你。
At this time, I'm showing no further questions. I'd now like to turn the call back over to Jim Torgerson for closing remarks.
Okay. Well thank you everybody for participating today. Hopefully, you've got a little more insight in what we see for the balance of this year and we'll be talking to you in the future. And if you have further questions, please don't hesitate to contact our Investor Relations team. So thank you.
好的。 谢谢大家今天的参与。 希望您对我们今年的平衡有所了解，我们将来会与您交谈。 如果您还有其他问题，请随时联系我们的投资者关系团队。 所以谢谢。
Ladies and gentlemen, thank you for participating in today's conference. That concludes the conference. You may now disconnect. Everyone have a wonderful day.
女士们，先生们，谢谢你们参加今天的会议。 会议结束了。 您现在可以断开连接。 每个人都有美好的一天。
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