ALLETE - Q3 2023

Transcript

Operator (participant)

Good day, and welcome to the ALLETE Third Quarter of 2023 Financial Results Call. Today's call is being recorded. Certain statements contained in this conference call that are not descriptions of historical facts are forward-looking statements, such as terms defined in the Private Securities Litigation Reform Act of 1995. Because such statements can include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those discussed in filings made by the company with the Securities and Exchange Commission. Many of the factors that will determine the company's future results are beyond the ability of management to control or predict.

Listeners should not put undue reliance on forward-looking statements, which reflect management reviews only as of the date hereof. The company undertakes no obligation to revise or update any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events, or otherwise. Welcome to ALLETE's conference call announcing third quarter 2023 financial results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. As a reminder, this call is being recorded. I would now like to turn the call over to Bethany Owen, Chair, President, and CEO. You may begin.

Bethany Owen (Chair, President and CEO)

Thank you, and good morning, everyone, and thanks for joining us. With me today are ALLETE Senior Vice President and Chief Financial Officer, Steve Morris; Jeff Scissons, ALLETE Corporate Development and ALLETE Clean Energy Strategy Officer; and Frank Frederickson, Minnesota Power's Vice President of Customer Experience and Engineering Services. Corresponding slides for this morning's call are available on our website at allete.com in the investors section, and we'll call out each page number as we go through today's presentation. This morning, we're pleased to report ALLETE's third quarter 2023 earnings of $1.49 per share on net income of $85.9 million. Last year's third quarter results were $0.59 per share on net income of $33.7 million.

Steve will be providing additional details on our financial performance during the quarter and our revised full year 2023 guidance in a moment. I'll begin with brief updates on just a few of our key strategic projects. Starting with our largest business, our Minnesota Power team continues to make significant progress on projects that are foundational to ALLETE's Sustainability in Action strategy, including the more than $3 billion capital expenditure plan to advance our carbon-free energy vision. Slide three shows an important part of that plan, our HVDC Modernization Project. This project will replace aging infrastructure and modernize the terminal stations for our 465-mile DC transmission line running from Center, North Dakota to Duluth, Minnesota.

It provides Minnesota Power's customers direct access to some of the best wind resources in the country and will also enhance the reliability and resiliency of the grid across the Upper Midwest. Our team has worked hard to advance this important project and to secure government grants to help reduce the project's cost for customers. In May, Minnesota Power was awarded a $15 million grant toward the project as part of the energy bill passed by the Minnesota Legislature. Just a couple of weeks ago, we were very pleased to learn that the U.S. Department of Energy awarded Minnesota Power a $50 million grant for the project, following a competitive process among hundreds of applicants nationwide. We're grateful for this meaningful support from the state of Minnesota and the Department of Energy, helping to make this important project even more affordable for our customers.

Construction could begin on this $800-$900 million project as early as next year, pending regulatory approvals in North Dakota and Minnesota, with an in-service date expected later this decade. Our team is also making great progress on the Northland Reliability Project, a 345 kV transmission line from the Iron Range in northern Minnesota to central Minnesota, which we'll jointly own with Great River Energy. This project was approved by MISO in the first tranche of its long-range transmission plan and is estimated to cost a combined total of $970 million-$1.3 billion, representing another important investment in the reliability and resiliency of the transmission system.

In August, we filed a combined Certificate of Need and route permit application with the Minnesota Public Utilities Commission, and we look forward to working through the regulatory approval process. Another project approved by MISO in the first tranche of its LRTP is the Big Stone South Transmission Project, a 150-mile, 345 kV transmission line jointly owned by five utilities, including Minnesota Power. A Certificate of Need was filed with the MPUC in September, and the commission will determine the final route for the Minnesota portion of the project, as well as cost recovery for our approximately $20 million share.... In addition to this exciting progress on the transmission front, we're making progress on our renewable RFPs.

On October 2nd, Minnesota Power filed a notice with the MPUC of our plan to issue an RFP for up to 300 MW of solar later this month. We also plan to issue an RFP for up to 400 MW of wind by the end of the year. The solar RFP will emphasize important attributes such as investment in our host communities, the use of local labor, and a focus on increasing supplier and workforce diversity. All of this will help ensure these solar projects deliver the best overall value to customers while strengthening the communities we're privileged to serve. Please see slides four and five. As planned, yesterday, Minnesota Power filed a rate proposal with the Minnesota Public Utilities Commission.

This proposal will help ensure Minnesota Power can continue making the EnergyForward investments needed to meet the goals of this year's Minnesota legislation, requiring 100% carbon-free energy by 2040. Minnesota Power became the first utility in the state to deliver 50% renewable energy in 2020 and reached an all-time high of nearly 60% renewable energy for customers in 2022. I'm so proud of our Minnesota Power team and all that our company has done to lead our state's clean energy transformation, all while safeguarding reliable, provide meaningful programs to support our low-income customers, as well as state-leading energy conservation programs and time-of-day rates that provide options for customers to save energy and control their monthly bills. These are just a few examples.

While we advance our vision of providing carbon-free energy, we will continue to make affordability for all of our customers a priority. There is more work ahead to ensure that we have the resources and tools needed to accomplish the state's clean energy goals, and that's the reason for the rate proposal Minnesota Power filed yesterday. We're confident that our regulators understand the importance of a constructive outcome to help ensure Minnesota Power's ability to continue our clean energy transformation while delivering the safe, resilient, and reliable service that powers people's lives and businesses throughout Northeastern Minnesota. Steve will share more details on the rate case filing in a moment. One other note on the regulated operations front, I'm pleased to report that Superior Water, Light and Power began generating renewable energy from its first community solar garden last month.

Superior Solar is a 470-kW project built by local labor and with regionally sourced materials. The solar garden is fully subscribed, generating enough energy to power approximately 115 homes, and it's the first energy generated locally by Superior Water, Light and Power in more than 40 years. Turning briefly to our non-regulated businesses, it was great to receive the very positive arbitration outcome in favor of ALLETE Clean Energy recently. The ALLETE Clean Energy team has endured the historically low wind conditions that affected much of the nation this quarter and have worked hard to mitigate the effects, including increasing efficiencies and unit availability, implementing O&M reductions, and many other initiatives. They're a strong team, and I couldn't be more proud of their resilience and innovation throughout the year.

And finally, as we close in on the first full calendar year with New Energy Equity as part of the ALLETE family of businesses, we're excited about the team's positive momentum. New Energy Equity continues to grow its already strong pipeline of more than 2 GW, all while executing on current projects and delivering solid financial results. As mentioned previously, we expect New Energy to close out the year on track or slightly above original expectations. We've made strong progress throughout this year, and I'm grateful to our entire team across our family of businesses for their dedication, expertise, resiliency, innovation, and always their integrity. Our team is committed to serving our customers with excellence every single day. Now I'll turn it to Steve for additional details on our third quarter financial results, full year earnings guidance, and Minnesota Power's rate case filing. Steve?

Steve Morris (SVP and CFO)

Thanks, Bethany, and good morning, everyone. I would like to remind you that we filed our 10-Q this morning and encourage you to refer to it for more details. Please refer to slides six through eight for significant variances and other items for comparison consideration. Today, ALLETE reported third quarter 2023 earnings of $1.49 per share on net income of $85.9 million. Earnings in 2022 were $0.59 per share on net income of $33.7 million. Net income this quarter included a $40.5 million or $0.71 per share after-tax gain recognized for a favorable arbitration award involving a subsidiary of ALLETE Clean Energy. Also impacting this quarter was the timing of reserves for interim rates resulting from Minnesota Power's February rate case order. A few details from our business segments.

ALLETE's Regulated Operations segment recorded third quarter of 2023 net income of $34 million, compared to $38.3 million in 2022. Earnings were lower in the third quarter of 2023, reflecting the timing of interim rate reserves at Minnesota Power compared to 2022. As you may recall, the entire 2022 interim rate reserve was recorded in the fourth quarter of 2022, which has resulted in timing differences each quarter throughout 2023. The timing difference of these reserves will fully reverse in the fourth quarter this year. Partially offsetting this impact was increased sales to industrial customers during the quarter. ALLETE Clean Energy recorded third quarter 2023 net income of $54.8 million, compared to a net loss of $7.3 million in 2022.

Net income this quarter reflected the gain in interest income for the favorable arbitration award at one of ALLETE Clean Energy's subsidiaries. 2022 included a reserve of $2.9 million after tax, the anticipated loss on the sale of the Northern Wind project. Our corporate and other businesses, which includes New Energy, BNI Energy, and our investments in renewable energy facilities, recorded a net loss of $2.9 million, compared to net income of $2.7 million in 2022. Net income this quarter reflects higher consolidated income tax expense, partially offset by earnings from Minnesota Solar projects, which were placed into service late last year and in the second quarter this year.

New Energy's earnings in this quarter were slightly below 2022, primarily due to the timing of project closings, now expected in the fourth quarter, and higher operating and maintenance expense as compared to last year. ALLETE's financial position is supported by a strong balance sheet that includes cash and cash equivalents of approximately $126 million, $370 million in available consolidated lines of credit, and a debt-to-capital ratio of 35% at the end of the quarter. The arbitration award had a positive impact on our liquidity position, with approximately $60 million reflected in cash and cash equivalents at the end of the third quarter. Next, a few comments on our outlook and full year 2023 guidance. Please refer to slide nine for additional details.

Considering a number of factors occurring during the year, as well as our anticipated results for the fourth quarter, we have revised ALLETE's 2023 full-year earnings guidance to be in a range of $4.30-$4.40 per share. Specific items affecting ALLETE's updated guidance includes the third quarter arbitration award, a third-party network outage expected to negatively impact the Caddo Wind Energy facility in the fourth quarter, and historically low winds across much of the nation, affecting earnings at ALLETE Clean Energy's wind energy facilities throughout the year. These items, in total, had a positive impact of approximately $0.30 per share, included in our guidance update. Next, a few comments on the recently filed Minnesota Power rate case. Please refer back to slides four and five for several highlights on the filing.

Yesterday, Minnesota Power filed a retail rate increase request with the Minnesota Public Utilities Commission, seeking an increase of approximately $89 million in total additional annual revenue, net of rider revenue, moving to base rate. The filing seeks a return on equity of 10.3% and a 53% equity ratio. Our request includes net interim rates of approximately $64 million, which is expected to begin in January 2024, with approval by the commission. Interim rates are subject to refund. We anticipate final rates will be implemented sometime in late 2025.

Our rate case request supports EnergyForward goals by transitioning to new supplies of renewable energy, building more resiliency into the electric grid to ensure reliability, employing the workforce necessary to achieve a clean energy transition, addressing inflation and supply chain issues, and by providing a fair return on investment to attract capital for continuing investment in the clean energy future. The rate case assumes taconite production of approximately 35 million tons, which is in alignment with the long-term average production levels for taconite. In addition, Minnesota Power has proposed a rate stabilization mechanism to address and mitigate the financial impacts related to operational volatility of its large power customers. This proposal offers a simple and balanced method to align risks and benefit of large power load volatility that can be applied between rate cases.

The filing also accounts for approximately $39 million previously approved for recovery through transmission and renewable riders by the Minnesota Public Utilities Commission for capital costs of the Great Northern Transmission Line and production tax credits by moving rider billings into base electric rates. This change from rider billings to base rates will not alter the total amount we recover from customers. We will share procedural updates on material developments as the filing progresses. I'll turn it back to Bethany for additional comments. Bethany?

Bethany Owen (Chair, President and CEO)

Thanks for that update, Steve. As you can hear, we're very pleased with our progress advancing ALLETE's Sustainability in Action strategy, and we expect even more in the coming years. ALLETE is a strong, growing, and vibrant company with a talented team and a family of businesses that are well-positioned to thrive now and long into the future. Together, these businesses provide sustainable, long-term earnings growth and many opportunities for significant additional clean energy investment. I'm equally proud that how we do business is always a differentiator of ALLETE and our team. We're committed to working closely with our many diverse stakeholders as we continue to execute our Sustainability in Action strategy, because we know we are stronger when we work together....

Slide 10 contains links to detailed information on this important work, including our corporate sustainability report, which we plan to update in the coming weeks with full year 2022 data, and we'll continue to update the CSR regularly as we execute our strategy. We look forward to sharing more energy-transforming progress in future quarters. We've set the stage for strategic, significant, and sustainable growth at ALLETE, with real projects that build on the strategic assets we already have and leverage the strength and experience of our amazing team. We're proud of ALLETE's track record and excited about the future as we provide cleaner energy to our customers, meaningful jobs and significant investment in our communities, exciting opportunities for our employees, and attractive value for our investors. That is putting sustainability into action. Thank you for your interest and your investment in ALLETE.

At this time, I'll ask the operator to open the line for your questions.

Operator (participant)

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Richard Sunderland of JPMorgan. Please proceed with your question.

Richard Sunderland (Equity Research - North American Utilities and Power)

Hi, good morning. Thank you for the time today.

Bethany Owen (Chair, President and CEO)

Good morning.

Richard Sunderland (Equity Research - North American Utilities and Power)

Starting on the capital side, with these two RFPs, the 300 MW of solar and the 400 MW of wind, when do you anticipate having line of sight to those outcomes? And, you know, would that line of sight also drive a capital plan revision as well? How are you thinking about the capital plan overall in light of the moving pieces on the transmission side as well? I guess, just curious about the cadence of updates you might give into 2024 here/

Steve Morris (SVP and CFO)

Yeah, good morning, Rich. Steve Morris. So I can take that. As Bethany mentioned, we do plan to issue the solar RFP later this month and the wind as well, later this year. We would expect the RFP award selection midway through 2024, with the commission approval process later in 2024. So, if successful, we could have capital costs later in this year, certainly could slide into 2025 as well. We'll have a little bit more clarity, we think, by our year-end conference call in February, which we'll update our capital schedule at that point in time. Overall, though, we do not expect our, if successful on these, our capital to decrease.

Richard Sunderland (Equity Research - North American Utilities and Power)

Certainly. Certainly. Thanks for running through the, the timeline there. I guess the, the other side of the coin, you know, there's been questions over the past year since you raised the capital plan around financing. How are you thinking about financing at this point? It's certainly topical in light of interest rates, move in sector valuations. I'm also curious how you think about the financing plan with the arbitration award. You know, is, is this something that gives you even incremental flexibility on a sort of financing capital rotation, what have you, standpoint? Any thoughts there would be helpful.

Steve Morris (SVP and CFO)

Yeah, thanks. Good question, Rich. So yeah, we have, as I mentioned on the call, an additional $60 million in cash for the arbitration award that can be used for future, CapEx projects to reduce, equity needs, as well as we've talked about this before, renewable tax credit sales. So we're working on that. That could generate, potentially $40 million of sales for the 2023 credits. Could be the same number for 2024 as well. So that'll help. I also mentioned on the call, debt to equity at 35% at the end of the quarter, which we expect it to continue, which gives us some headroom on additional leverage. We've also talked before about the, forming a holdco, which gives us financial optionality.

And as we've discussed before, and as we always do, we consider maximizing the value of all our assets with opportunistic redeployment of capital into our regulated CapEx program. With that said, utilizing the cash on hand with our debt to equity ratio, we have very limited equity needs in 2024.

Richard Sunderland (Equity Research - North American Utilities and Power)

Thank you. Very helpful. And one final one for me. Thanks for laying out all the details around the rate case. Curious if you could speak a little bit to the stakeholder engagement side in advance of this filing and around the filing itself. Obviously, a lot of telegraphing you've done out of the last rate case around the needs for this case in particular. Anything you could speak to on that side?

Bethany Owen (Chair, President and CEO)

Yeah, I'll start, and maybe Frank can speak to more specifically on the customer side. This is Bethany. You know, certainly we view our engagement with all of our many stakeholders as incredibly important precursors to any of our regulatory processes, and certainly engaged in that in advance of our 2019 IRP, and have developed a really robust network and communication strategy around ensuring that everyone understands kind of our strategy to move clean energy forward, while we continue to preserve reliability, and affordability, providing value to all of our customers. And I mentioned some of the really key strategic initiatives that we've put into place to help support lower-income customers. But all of our customers, you know, that's a key priority.

So certainly, many conversations happening, making sure that people understand the reason for the rate case and what we're planning to do and needing to do with those dollars. And so Frank, do you want to speak to customers overall?

Frank Frederickson (VP of Customer Experience and Engineering Services)

Certainly, yeah. Thanks, Bethany, and thanks for the question, Richard. So yes, I mean, we work closely, you know, with our customers and in trying to, you know, with our largest customers, working on helping them with the estimates and, you know, they too have inflation in their operations like us. So I mean, there is a level of understanding in that. And we also pace with all of our customers and stakeholders on the clean energy legislation in Minnesota, Minnesota Power's renewable energy leadership, you know, finishing off at nearly 60% renewables in 2022 for our retail customers, and sharing the progress that is continuing on that as some of the key drivers for this case.

Richard Sunderland (Equity Research - North American Utilities and Power)

Understood. But just to be clear, though, have you had conversations around the rate stabilization mechanism in advance of the case itself? I know it's a little bit of a different proposal this time than what you saw in the past. Just curious about the backdrop for that specifically.

Bethany Owen (Chair, President and CEO)

We have. Frank, do you want to speak to that?

Frank Frederickson (VP of Customer Experience and Engineering Services)

Yes, thank you. So, yes, I mean, we have had some of those conversations with that around the stabilization mechanism as to do some more listening, but also sharing in terms of the sales volatility that Minnesota Power has, that's larger than some of the other peer utilities in the state.

And, some of that's built out in our case and, and, also built out in, you know, in our Taconite forecast, where, you know, we've been reaching out with the all the different stakeholders that'll be involved in this case, and explaining it and explaining how this can be good for all, as we've seen just over the last couple of years with sales both above and below the level that we filed in the 2024 test year.

Richard Sunderland (Equity Research - North American Utilities and Power)

Perfect. Thank you very much.

Bethany Owen (Chair, President and CEO)

Thanks, Rich.

Operator (participant)

One moment, please, for our next question. Our next question comes from the line of Alex Mortimer of Mizuho Securities. Your line is now open.

Alex Mortimer (Equity Research Associate)

Hi, good morning, team. Congratulations on the quarter.

Bethany Owen (Chair, President and CEO)

Good morning, Alex. Thank you.

Alex Mortimer (Equity Research Associate)

So within your stated 5%-7% EPS growth rate, I'm just curious on the consolidated business, can you touch on where you expect the different businesses to be within that range? i.e., the utility may be below, but the regul- unregulated above, or vice versa. Obviously understanding it can fluctuate year-over-year, given, rate relief and other drivers.

Bethany Owen (Chair, President and CEO)

That's not the case, but Steve, do you want to speak to that?

Steve Morris (SVP and CFO)

Yeah. Good morning, Alex. Steve Morris here. So, you know, if you look at our CapEx table, you can see it's really heavily regulated, in fact, with the projects that we have and the renewable efforts going underway at Minnesota Power. So, so the 5%-7% is more heavily weighted towards the regulated business and what we say is complementary earnings from our non-regulated business, primarily ALLETE Clean Energy and New Energy.

Alex Mortimer (Equity Research Associate)

Okay, understood. And then turning back to the rate case, can you touch on any items in the recent filing that you think might require more work or more education with, with policymakers and, and interveners? Given that I know you just touched on some stakeholder engagement, but sort of any ongoing efforts, as you work through the case?

Bethany Owen (Chair, President and CEO)

Yeah, I think I would just say, Alex, that, you know, we've worked hard over the last few years to help our regulators and other stakeholders understand the differentiated aspects of our company, our customers, the region that we serve. And I think they have a really strong appreciation and understanding for all of that, and certainly why we're in for this rate proposal at this time.

Alex Mortimer (Equity Research Associate)

Makes sense. All right. Thank you so much. Congrats again on the quarter, and look forward to seeing you all soon.

Bethany Owen (Chair, President and CEO)

Thanks, Alex.

Operator (participant)

Thank you. One moment, please, for the next question. Our next question comes from the line of Brian Russo of Sidoti. Your line is now open.

Brian Russo (Equity Analyst, Utilities)

Yeah, good morning.

Bethany Owen (Chair, President and CEO)

Good morning, Brian.

Brian Russo (Equity Analyst, Utilities)

Just to follow up on the RFP process. You know, I assume ALLETE or Minnesota Power has submitted their own self-build options within these RFPs. I was just wondering if you could remind us of the competitive advantages that you have, and have those advantages been even more enhanced given kind of the macro environment issues facing a lot of third-party developers?

Steve Morris (SVP and CFO)

Yeah, good morning, Brian, Steve Morris. So a couple of comments. So the RFPs have not been issued yet. So that is the solar one, mid-November, wind in the fourth quarter as well. So Minnesota Power does, in fact, tend to bid with for both of these RFPs. We've talked about this on previous conference calls, where the solar is regional solar. So we really think that in and around the Boswell area, where Minnesota Power has the infrastructure in place. So we feel good about that. Other than that, I'm not going to get into too much details on the call.

Brian Russo (Equity Analyst, Utilities)

Okay, understood. I suppose that most of these potential RFP investments would be rider-eligible and not really have to go through, you know, full general rate cases to get timely recovery.

Steve Morris (SVP and CFO)

You're right. Yep, that's right. These would be rider projects, Brian.

Brian Russo (Equity Analyst, Utilities)

Okay, great. And then, also, any insight, you know, into taconite demands, you know, given what we've seen with the union strikes, you know, the steel prices. I know you guys are, the demands are set through year end, but I just thought maybe you could comment on that?

Frank Frederickson (VP of Customer Experience and Engineering Services)

Thanks. Thanks, Brian. Frank Frederickson here. So we have seen, as you mentioned, strong nominations this year since the restart of Northshore Mining and, you know, at a partial operation level in April. And, you know, we have seen our steel customers have made some commentary recently in terms of the impacts of the United Auto Workers strike. And we're really, as we look to 2024, you know, we are projecting and filed in our rate case, that average level of production right around 35 million tons as, you know, just balancing out what we've seen for actuals in 2022 and near final year projections here in 2023.

Brian Russo (Equity Analyst, Utilities)

Okay, great. And then on ALLETE Clean Energy, could you just discuss, you know, any asset optimization opportunities you might have that could, you know, enhance your cash or liquidity position? I think maybe Whitetail and maybe Russo were two kind of, you know, ranking higher on the list for maybe build-own-transfer or sale, et cetera?

Jeff Scissons (Corporate Development and Clean Energy Strategy Officer)

Good morning, Brian. This is Jeff. Yeah, and thanks. You did highlight two of the projects in our development pipeline, with Whitetail being much further along, working on permitting and finding the right offtake. Also highlight that we do we call our legacy assets, and we do believe that they're prime for repower and redevelopment, so working on those as well.

Brian Russo (Equity Analyst, Utilities)

Okay, great. And just on New Energy, given, you know, what we've seen in the renewable sector through the macroeconomic, you know, headwinds, inflation, higher cost of capital. What are you seeing in what seems to be a rather unique distributed solar market for New Energy? You know, what are you seeing in the competitive landscape or just the operating environment?

Jeff Scissons (Corporate Development and Clean Energy Strategy Officer)

Yeah. Brian, this is Jeff again, and you touched on some of the factors. There's certainly been some headwinds, but there's been some tailwinds as well in that sector, including the IRA and the benefits that came from the IRA. So, we continue to be excited about the team. They're performing well. They're a talented group and excited to have them a part of ALLETE. And as you heard from Bethany earlier, they've executed on their plans and slightly ahead. So, they continue to be bullish and optimistic in navigating, and that's been their history. That sector has had some ups and downs, and they've managed well, and expectations are still that they can continue.

Brian Russo (Equity Analyst, Utilities)

Okay, great. Thank you very much.

Frank Frederickson (VP of Customer Experience and Engineering Services)

Thanks, Brian.

Operator (participant)

One moment, please, for our next question. All right, our final question comes from the line of Tanner James of Bank of America. Your line is now open.

Tanner James (VP, Equity Research - North America Power and Utilities)

Hi, good morning.

Bethany Owen (Chair, President and CEO)

Good morning.

Tanner James (VP, Equity Research - North America Power and Utilities)

Hi. All my other questions were asked and answered, but I did want to check in on New Energy. You previously stated you were on track for about 100 MW of project closings for the year. There were some timing impacts here in the third quarter. Looking into the current quarter, is there potential for some of these projects perhaps to slip into 2024?

Jeff Scissons (Corporate Development and Clean Energy Strategy Officer)

Good morning, Tanner. This is Jeff, and there's certainly fluidity. The market is fluid, and timing and close of projects can be fluid. But the team does believe that they're on track and certainly feels like, as we mentioned earlier, that they would meet or slightly exceed targets for this year.

Tanner James (VP, Equity Research - North America Power and Utilities)

All right, great. Thank you very much.

Bethany Owen (Chair, President and CEO)

Thank you.

Operator (participant)

Thank you. At this point, I would now like to turn the conference back to CEO, Bethany Owen, for closing remarks.

Bethany Owen (Chair, President and CEO)

Thank you again for being with us this morning and for your investment and interest in ALLETE. We're looking forward to speaking with many of you in just over a week during the EEI Financial Conference and at other investor venues throughout the remainder of the year. We hope you enjoy the rest of your day.

Operator (participant)

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.