Question-and-Answer Session
Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]. And our first question comes from Schneer Kruschuni with UBS. Go ahead please.
Schneer Kruschuni - UBS
Hi, good morning.
Robert W. Best - Chairman and Chief Executive Officer
Good morning, Schneer.
Schneer Kruschuni - UBS
Guys, can you hear me now?
Susan Giles - Vice President, Investor Relations
Now, we can.
Schneer Kruschuni - UBS
Perfect. Sorry about that, we had some phone difficulties. Just wanted to ask a couple of quick questions, just with respect to the utility, I know that you have made significant amount of progress with respect to immunizing yourself from weather exposure and so forth and what not. I was wondering if you can talk to the effects of conservation, I know that you got something in Mid-Texas and so forth but if you can sort of give us some color with respect to your exposure to conservation in this type of environment?
Robert W. Best - Chairman and Chief Executive Officer
I'm going to let Kim Cocklin, who is here with us and is our President of our company answers that question.
Kim R. Cocklin - President and Chief Operating Officer
Good morning, Schneer. Well, as you know conservation tariffs are very popular discussion topic with regulators today and it's pretty similar to the demand despite management that goes on as one on the electric side. We do have conservation programs. We have one in the Mid-Tex division and we are adopting one in West Texas and essentially, it encourages our customers to conserve and it rewards us with joining with them in these efforts to have them conserved and then our margins are not high essentially to throughput.
Robert W. Best - Chairman and Chief Executive Officer
And Schneer, another thing that we benefit from it about 75% of our margins today are reviewed in annual rate filing mechanisms like we have in Texas, the other jurisdictions Louisiana and Mississippi, so that to the extent that conservation could accelerate we wouldn't have to... it wouldn't be a significant lag between the time that develop and the time that we could reflect the declining volumes and rates.
Schneer Kruschuni - UBS
Okay. That makes sense. Can you also give us some color with respect to your historical experience with bad debt expense, I mean, going back let's say at '91 or some more severe recession scenarios than we've seen recently?
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