Question-and-Answer Session
Operator
Thank you. (Operator instructions) All right. Our first question comes from the line of Jim Lykins. Your line is open.
Jim Lykins – Hilliard Lyons
Good morning, everyone.
Larry Downes
Hi, Jim.
Jim Lykins – Hilliard Lyons
First of all, you commented on the lower gas volatility in the quarter. I was just wondering if you could give us a feel for what you are seeing so far into Q1 as well.
Larry Downes
Let me ask Rick Gardner to take that question. Rick?
Rick Gardner
We’ve seen volatility at – January did show us some good volatility in the market area in relation to Appalachia pricing. And right now it’s really going to take a look at the weather and see how that really shapes out.
Jim Lykins – Hilliard Lyons
Okay. And I was also wondering if you might be able to tell us what your assumption is and guidance for gas volatilities were?
Larry Downes
That’s I think – that’s embedded in the 30% to 35% of the total and how we expect that volatility will affect the results of NJRES.
Jim Lykins – Hilliard Lyons
Having said that, can you at least say whether you are assuming something similar to Q4 or if there is an improvement there?
Rick Gardner
Again, seasonality will always be an issue, and it’s part of the business based on when certain positions are put on and when certain assets are hedged. I can tell you that as usual we will look at the current market for storage spread, for example, when valuing any unhedged position, and we do not assume unusual weather or other events that would cause tremendous upside on margin.
Jim Lykins – Hilliard Lyons
Okay. And the $77.5 million in CapEx, does that include the AIP or will there be some additional CapEx spend there?
Larry Downes
That would be – that would be incremental to the $77.5 million, the AIP.
Jim Lykins – Hilliard Lyons
And can you give us a feel for maybe what your interest rate in there? Or is it too early to tell?
Larry Downes
The total over the likes of the program would be an additional $70.8 million.
Jim Lykins – Hilliard Lyons
Okay. And –
Larry Downes
Jim, that would unfold over. That’s not all in one year.
Jim Lykins – Hilliard Lyons
Okay. And lastly, there was about a 22% drop in depreciation this quarter. Maybe if you could comment on that and if that’s maybe – or what we should expect over the next few quarters in depreciation?
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