California Water Service Group Q1 2008 Earnings Call Transcript

Tags: California Water Service Group

Question-and-Answer Session

Operator

[Operator Instructions]

Our first question or comment comes from the line of Michael [Gresence] with Robert W. Baird.

Michael [Gresence] – Robert W. Baird

Good morning, gentlemen.

First question: In terms of all of the proceedings that are going to go into effect July 1^st, have you made any attempt to determine the impact, or what the impact have been if those were effective already at the first quarter of this year?

Martin Kropelniki

We haven’t, Michael, and I’ll tell you why. We are in the design phase of the RAM and the modified cost balancing account and it’s a fairly elaborate process that we have to go through. We have to design it. We have to share that information with the Commission to get their sign off. So we’re approximately halfway through the design and obviously we have to have a conclusion made up of that design before we can model anything. So, we have a tremendous amount of work and a very large cross-functional team working on this project. And I’ll look forward to sharing details of design with everybody in July after we get them all approved.

Peter Nelson

Michael, I’ll make one more comment. This is Pete. I know it’s confusing to prorate the change mid-year on everybody. July 1^st is a tough time to kind of do your analysis but we’re moving towards a January 1^st rate year. So our next general rate case filing for the whole company will be filed in July ’09 for rates effective January 1, 2011.

I think from that point on it makes it a little easier to do your analyses because we’ll be in a calendar year for rate making in California.

Michael [Gresence] – Robert W. Baird

All right. In terms of capital expenditures, where do you stand on terms of the annual forecast and some of the major projects that are going on? If you could update.

Martin Kropelniki

Sure. Our forecast this year is in between $80 and $100 million. I realize there’s a pretty broad gap there but part of the problem is when you’re putting a new plant into the ground, the permitting process to sign out costs and etc. takes a little bit of time. So, if our goal is $100 million and we’ll be $28 million in the first quarter, I think we started off the year strong and we will continue to put that pressure on.

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