Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Greg Gordon – City Investment Research.
Greg Gordon – City Investment Research
A couple questions, when you look at the revised capital budget and as you look at your liquidity and your expected operating cash flow for the year do you think you’ll be coming to the market for common equity this fiscal year?
Mark Ruelle
Well as we said at our EEI presentation in November, we haven’t ruled out, but any requirement for new equity this year would be very modest, if any.
Greg Gordon – City Investment Research
So you think you could accomplish that through normal sort of 401(k) and DRIP?
Mark Ruelle
Well, we’d be flexible as to how we would do it. But the amounts if any that we have in mind could be fully satisfied with, for example, what’s remaining in our dribble.
Greg Gordon – City Investment Research
Second question, give us a little bit more guidance vis-à-vis what you’re expecting in terms of a range of gross margin targets in your wholesale business, and give us a sense of what the strategic landscape is, how it’s evolved, as MISO becomes more integrated into the flow of power in the region and that impact on the future of that business.
Doug Sterbenz
This is Doug Sterbenz. Let me refer back to 2008. Remember that we have been talking about two internal factors that have really led to the decline in these non-asset margins, and that is our staff spending considerable time dealing with our asset business in 2008, and that was driven by a couple of things.
First, we had some large capital projects, namely scrubber installations, at our large coal plants that we had to go out and, in essence, buy a bunch of power to replace. And so the same people that do the non-asset business are tied up doing that. In addition to that, we had some highly favorable gas basis in the Midwest here in the Q4 of last year, and that, recall, made a bunch of sales and so we’re out buying gas and selling off our assets.
Second, we are still adjusting to these marketing changes with these MISOs. SPP also went through some major changes a year ago as well. So we’re seeing some major changes where people are now dealing directly with the ISOs or they’re not doing bilateral transactions with folks like us.
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