DPL, Inc. Q1 2008 Earnings Call Transcript

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2008-04-24 19:19:07.0

Tags: DPL Inc.

Question-and-Answer Session

[Operator Instructions]. Your first question comes from the line of Paul Ridzon from KeyBanc. You may proceed

Paul T. Ridzon - KeyBanc Capital Markets

Good morning. Congratulations on a solid quarter. I missed your '09 blended coal costs, and then could you just kind of talk about any remaining exposure to environmental spend cost escalation?

Paul M. Barbas - President and Chief Executive Officer

I believe our '09, Paul, was $49.75. That was our blended coal costs. And we are fairly convinced that we are... we will have no additional escalation in our environmental costs. The project is going to be complete in the next few weeks and we've got... we have acquired all the material we need to acquire. We have contracts in place and are in the final throes of bringing the last two scrubbers up.

Paul T. Ridzon - KeyBanc Capital Markets

And at Conesville, any exposure there?

John J. Gillen - Senior Vice President, Chief Financial Officer and Treasurer

We get our estimates from AEP who is the operator of the Conesville plant. What we have built into CapEx program is that plant should be... the scrubbers are supposed to be completed, I think, late '09 and may be early '10, but that's built into these projections. So our expectation is that they come in on time. That's the spend we will have.

Paul T. Ridzon - KeyBanc Capital Markets

My understanding of Ohio legislation is, it's upside for you, you can potentially reopen some cost escalators that have gone above and beyond what you have in your RSP. But there is no grab-back capability from the commission. Is that an accurate read?

Paul M. Barbas - President and Chief Executive Officer

The tough provisions, as we see them, they are fairly broad with this legislation going forward, but at this point we can file for a recovery of additional environmental and fuel costs if we so desire in our ESP to be filed later this year.

Paul T. Ridzon - KeyBanc Capital Markets

But your existing RSP has no downside risk other than the potential earnings test in '11?

John J. Gillen - Senior Vice President, Chief Financial Officer and Treasurer

We believe that's right now again fairly broad, yet to be tested, and so we don't... we believe that we will be able to meet the earning tests when it is applied in 2011. You are correct, there is no downside risk before then.

 

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