Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from Rick Shobin with GLG Partners. Your line is open.
Rick Shobin – GLG Partners
Hi, good afternoon.
Jim Piro
Hi, Rick.
Rick Shobin – GLG Partners
I was just curious as to, I know you guys are trying to do your best, as we all are with regards to managing the pension and trying to make sure that there isn’t a shortfall. I was just wondering, with regard to funding the pension, whenever you make funding or deposit money into it, is that recovered through rates as it go to rate base, how does it function?
Jim Piro
The way we – this is Jim Piro, Rick, thanks for the question. The way we recover our pension expense is, we include in our general rate case our estimated what's called the FAS 87 expense. So that’s the smoothing number that we calculate under the accounting standards. That’s the number we include in general rate cases. So over time, we will have the opportunity to recover the cost of our pension. So it doesn’t quite necessarily match the cash flows, but over time it does catch up to it.
Rick Shobin – GLG Partners
So the actual cash infusion into the pension gets amortized over the course of however long the life of the pension is?
Jim Piro
That’s correct, Rick.
Rick Shobin – GLG Partners
It winds up getting made up through the other rates.
Jim Piro
That’s correct. There might be a little timing difference on funding versus the actual cash flow from our customers but that’s over the life of the plan and that can change based on the actual earnings of the assets.
Rick Shobin – GLG Partners
Okay. Thank you very much.
Jim Piro
You’re welcome.
Operator
Your next question comes from James Bellessa with D.A. Davidson & Co. Your line is open.
James Bellessa – D.A. Davidson & Co.
Jim, I think I heard you say that your assumptions about your 2009 EPS guidance, one of the assumptions was flat weather-adjusted load in 2009 versus 2008. Was that correctly heard?
Jim Piro
That is correct, Jim.
James Bellessa – D.A. Davidson & Co.
Now, I see in your narrative, your unemployment rate in Oregon went to 9% versus a 6.3% average for the year. It went to 9% at the end of the year and you’ve called for the sensitivity of declines in your load versus increases in the unemployment rate. So, why would you be assuming that the load is flat ’09 versus ’08?
- To read the full transcript on Seeking Alpha, click here »
