ITC Holdings Corp. (
Q3 2010 Earnings Call
October 28, 2010 11:00 am ET
Gretchen Holloway - IR
Joseph Welch - Chairman, President & CEO
Cameron Bready - SVP, Treasurer & CFO
Michael Bates - Davidson & Company
Jay Dobson - Wunderlich Securities
Neil Kalton - Wells Fargo
Previous Statements by ITC
» ITC Holdings Inc Corp. Q2 2010 Earnings Call Transcript
» ITC Holdings Corp. Q1 2010 Earnings Call Transcript
» ITC Holdings Corp. Q2 2009 Earnings Call Transcript
» ITC Holdings Corporation Q1 2009 Earnings Call Transcript
Good day ladies and gentlemen and welcome to the ITC Holdings Corp. Third Quarter Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference call is being recorded.
I would now like to turn the conference to our host, Ms. Gretchen Holloway. Ma’am you may begin.
Good morning. And thank you for joining us for ITC’s 2010 third quarter earnings conference call. Joining me on today’s call are Joseph Welch, Chairman, President and CEO of ITC and Cameron Bready, our Senior Vice President, Treasurer and CFO.
Last night, we issued a press release summarizing our results for the third quarter and for the nine months ended September 30, 2010. We expect to file our Form 10-Q with the Securities and Exchange Commission today. Before we begin, I would like to remind everyone of the cautionary language contained in the Safe Harbor statement.
Certain statements made during today’s call that are not historical facts, such as those regarding our future plans, objectives and expected performance are considered forward-looking statements under federal securities laws. While we believe these statements are reasonable, they are subject to various risks and uncertainties and actual results may differ materially from our projections and expectation. These risks and uncertainties are discussed in our reports filed with the SEC such as our periodic reports on Form 10-Q and 10-K, and our other SEC filings. You should consider these risk factors when evaluating our forward-looking statements. Our forward-looking statements represent our outlook only as of today and we disclaim any obligation to update these statements, except as may be required by law.
At this time, I’d like to turn the call over to Joe Welch.
Thanks, Gretchen, and good morning everyone. I would first like to set the stage for what we expect be a rather brief call today given our reason comprehensive, strategic update at our Investor’s Day in late September.
Since only a month has passed, our review today will be concise and focus on the highlight for the quarter, as well some of the key takeaways from our five-year plan. Once again our results for the quarter continue to demonstrate our strong operational and fiscal performance for further bolstering our confidence, and our ability to successfully execute our 2010 goals.
Perhaps more importantly these results are also reflective of the progress we have made in, continuing to solidify a foundation for ITC to leverage as we move forward on executing our five-year capital investment plan. This plan provides for approximately $3.9 billion of capital investment in transmission the infrastructure from 2011 to 2015. And this framed us around improving reliability, facilitating access to all generation, reducing congestion, improving efficiency, lowering cost of delivered energy.
Our capital plan reflects our ongoing strategy of achieving best-in-class operations at our existing operating companies are also playing a meaningful role in the build out of the 21st-century transmission system in the U.S. through our development efforts.
While investments in our base to operating companies to support improved reliability and replace ageing infrastructure have driven our growth over the past several years. These investment opportunities are beginning to slow as our existing systems mature, and we are able to achieve our target in best-in-class performance level.
However, much work remains to be completed in these systems and they remain critical to our investment plan, as well as our overall strategy as they provide a key competitive advantage in our development initiatives, which are becoming increasingly important to delivering long-term sustainable for the company.
As we have discussed previously, we continue to recognize the needs for significant investment in transmission infrastructure in the U.S., driven primarily by long-term reliability needs of a grid, as well as the desire to achieve certain broader public policy goals.
On the reliability front, a variety of studies continues to demonstrate the need for significant investment in new transmission infrastructure, simply to address the reliability needs of the transmission system. As we have stressed, not only is the existing transmission system in the U.S. inadequate to meet the evolving need of the 21st-century energy intensive economy, it is also and equated and require significant investment to just maintain the status growth.
In addition to addressing the pure reliability requirement, momentum in the U.S. to build out a more robust transmission system to support long-term reliability needs, as well as broader public policy initiative, including increasing the penetration of renewable resources remain strong.
The impacts of renewable integration continue to be long-term drivers for the transmission investment in the U.S. In light of the evolving world, these resources are expected to play in the overall generation mix going forward. The development of renewable resources in particular wind generation has advanced over the years to satisfy a variety of objectives. One such objective is development aim at providing an economic generation alternative when other fuel prices increase like we saw with natural gas prices in 2008.
This form of wind development tends to be quite variable based on the relative economics of wind generation development, relative to the prevailing commodity price environment, and the cost of other competing resources. Given the current commodity price environment, much of this type of wind development has slowed in the U.S.