Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Analyst for Ron Barone - UBS.
Analyst for Ron Barone - UBS
I just had a couple of quick questions here. The first question is with respect to O&M. What do you view your trend rate over the next couple of years? Do you expect it to be ticking down kind of at the same pace you’ve seen in the last two quarters or do you kind of expect it to level off? I was just trying to get some color with respect to that.
David Hugo Anderson
I wish I could tell you we could reduce O&M 9% every quarter going forward but what we started off about a little over two years ago, we’ve redesigned our entire operations. And the goal was to get us into a top four top perspective and we were pretty close to that anyway, so we put long-term plans in place mainly using technology and becoming more of a process focused organization. In our attempts long-term was to make sure that our O&M growth rates were lower than our customer growth rates on a normalized basis and so we’ve been able actually to achieve that for the last couple of years and I think you’ve seen O&M growth rates of 1% and 2%. And for us customer growth rates should be in the 2% to 3%. Probably when the economy comes back we’ll be closer to 3%. So I would be targeting that 1% to 2%. This year’s a little unusual. I’ll remind you last year we had the record WACOG or what we call weighted average cost of gas benefits and we elected to free up some one-time spend of $5 million for system maintenance and reliability. So comparison wise it’s going to be a little difficult this year. And also with reduced results this year we have lower expenses. In general thought, 1% to 2% long-term growth rate would be what we are targeting which would be quite an accomplishment considering inflation, but I feel good about the processes we have in place.
Analyst for Ron Barone - UBS
With respect to the PGA issues, you had a hedging option as a kind of mitigation. Are you able to basically recover all of that and it would just be what’s open that goes to the customers? If you could just sort of give us some more clarity or more color with respect to the impact of how you can mitigate the issues on a go-forward basis, especially given the record high gas prices we’ve talked about?
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