The Registrants face significant risks from potential litigation (especially related to the February 2021 Winter Storm and Hurricane Beryl), regulatory actions (including rate case outcomes and climate change regulations), commodity price volatility, and the financial health of their customers (especially REPs). The sale of the Louisiana and Mississippi natural gas LDC businesses, while not a current risk, is contingent on regulatory approvals and other conditions. Uncertainties surrounding the outcome of these matters make precise financial risk quantification difficult.
Financial Upside
The Registrants anticipate revenue increases from various rate change applications, including those related to capital expenditures, storm restoration costs, and the Inflation Reduction Act. Potential gains from equity securities and indexed debt securities are also noted. The sale of Energy Systems Group and the proposed sale of the Louisiana and Mississippi natural gas LDC businesses could generate significant cash proceeds.
