Question-and-Answer Session
Operator
Your first question comes from Ted Durbin - Goldman Sachs.
Ted Durbin - Goldman Sachs
Retail margins for both electric and gas, you changed your outlook for 2009. Going forward, maybe you can talk a little bit about what’s coming next year?
James H. DeGraffenreidt
Could you repeat the first part of your question? it got cut off.
Ted Durbin - Goldman Sachs
The question is on retail margins, the non-regulated retail margins. What are you expecting for second half of 2008 and going into 2009? What are you seeing in terms of contracts you are signing right now?
Harry Warren
On gas margins, we’re seeing solid margins there. We expanded the range of our guidance assumptions for FY08 and I think that’s basically to the top end of the range we talked about in last year’s analyst conference.
On the electric side, we’re also seeing much stronger unit margins as this year has gone on for FY08; each month our risk management seems to be coming in a little better than our conservative modeling of that. We bake some of that improvement into our projections for the rest of this fiscal year in addition to the results to-date.
As for the implications of all these things for our margins in FY09, we’ll probably talk a little more about that in the analyst meeting that’s coming up in a month right now. Clearly the electric margins are becoming significantly stronger than the numbers in the discussions we had a year ago. So they seem to be continuing strong and again the gas margins are right now at the upper end of the range of the guidance we provided about a year ago.
Ted Durbin - Goldman Sachs
I got a little confused in terms of the impact of weather on the quarter and maybe just someone can run us through because now that you have sort of different rate mechanisms, what was the actual impact of weather on the quarter?
James H. DeGraffenreidt
We’ve had zero impacts of weather on the quarter. The weather has been warmer than normal, same trend that it was last year. What we are trying to describe was, what we referred to the quality of the degree days were better this quarter than the same quarter last year, and what that reflects is that last year we had a large number of degree days occur in the very early part of the season in October and those shoulder months tend to be very difficult times to predict the relationship between degree days and usage. We tend to see some abnormal results from that happen.
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