Question-and-Answer Session
Operator
(Operator instructions) Our first question comes from the line of Paul Ridzon with KeyBanc Capital Markets. Please proceed.
Paul Ridzon – KeyBanc Capital Markets
There seems to be some question in the market as to under your stipulation the base year of when you will collect higher fuel costs, is that ’08 or ’09?
Fred Boyle
We will begin recovering the fuel costs in 2010 are when we will have the fuel mechanism in place and the base at the recovery is $19.70 per megawatt hour. So to the extent cost exceed the $19.70 per megawatt hour, we would have incremental recovery.
Paul Ridzon – KeyBanc Capital Markets
And just in your previous guidance of $2.00 to $2.60 you had about $0.40 of benefit from anticipated deferrals, but you have taken your top end to $2.30, can you kind of comment on that, we are kind of expecting a $2.00 to $2.20 guidance stripping up the $0.40, is there some incremental improvement there or am I reading too much into this?
Paul Barbas
No we see some additional optimization opportunities Paul for 2009 and we have also seen the mark to market come back a little bit, we may see some opportunities to liquidate additional excess emission credits.
Paul Ridzon – KeyBanc Capital Markets
Okay, thank you very much.
Paul Barbas
You are welcome.
Operator
(Operator instructions) Our next question comes from the line of (inaudible) with Zimmer Lucas Partners. Please proceed.
Unidentified Analyst
Good morning, congratulations on a very solid year and a very constructive settlement agreement.
Paul Barbas
Thank you.
Unidentified Analyst
First of all I would just like to clarify on the CCEM issued with the AMI smart grid, so when you refile for the implementation of this time later this year, is there any reason to expect that the numbers of $60 million a year fortuitous that would change significantly?
Fred Boyle
We anticipate in the refilling that we will have a similar program to what we originally proposed, what we need to do is work with the other interested parties in putting together our refilling and to emphasize the benefits that will flow to the customers from the CCEM investments.
Paul Barbas
Yes I think in addition we have some fairly stringent targets to meet under Senate Bill 221, it is certainly a program at least similar to what we have filed that is going to be required to meet those targets.
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