Question-and-Answer Session
Thank you sir. [Operator Instructions]. And our first question comes from the line of Gordon Howald of Calyon. Please proceed.
Gordon Howald - Calyon Securities
That was close.
John W. Somerhalder II - Chairman, President and Chief Executive Officer
We recognized you.
Andrew W. Evans - Executive Vice President, Chief Financial Officer
Hey Gordon.
Gordon Howald - Calyon Securities
Thanks. What was your achieved return... rate of return in Georgia for the full year and may be a little bit more break down on the operating cost reductions and distribution, and what portion of that for example came from the lower compensation versus some of the other factors?
Andrew W. Evans - Executive Vice President, Chief Financial Officer
Gordon there is a table in our K looking to it I think I have got it here. We have authorized return on rate base of 8.53% and estimated 2007 return on rate base of 8.59%. So in that jurisdiction I would say we are at in, right at our authorized rate of return.
Gordon Howald - Calyon Securities
Okay.
Andrew W. Evans - Executive Vice President, Chief Financial Officer
In terms of expenses, relative to our budget we paid incentive compensation it was about $7 million lower in distribution. We had a $6 million increase in depreciation expense and that was largely offset by reductions in... lets see if I had the bucket term its mainly information technology, customer service expense was a big component as we get more of a full year run rate on call center operations and pension expense was down. That's partially due to the assumptions that we make around returns and our obligations under that plan not because of the reduction and benefits.
John W. Somerhalder II - Chairman, President and Chief Executive Officer
But if you look at the reduction, O&M for a customer, more than half of that was associated with incentive compensation, and the other major pieces was as Drew indicated, our IT spend and our ability to control costs in that area and some of our customer service costs that resulted from some of the initiatives we have had over the past several years.
Gordon Howald - Calyon Securities
Got you. Okay. If I can just ask one more quick one and I will turn it over to others. What impact did weather have on SouthStar in 2007?
John W. Somerhalder II - Chairman, President and Chief Executive Officer
- To read the full transcript on Seeking Alpha, click here »
