Question-and-Answer Session
Operator
(Operator Instructions) We will take our first question from Greg Gordon with Citi Investment Research.
Greg Gordon - Citi Investment Research
Thanks, good morning.
David Meador
Good morning, Greg.
Greg Gordon - Citi Investment Research
You guys are amazing, great quarter. I just for a moment am speechless and that never happens to me, anyway?
David Meador
Thank you.
Greg Gordon - Citi Investment Research
When it comes to the O&M cuts, I know a lot of this is laid out in the slides, but can you just go through for us what the total O&M reduction was quarter-over-quarter and in which businesses the cuts came from and in particular focusing on the regulated operations and how that might play into your discussions with the regulators and the current rate cases?
David Meador
Well, I can start and set the context and then Dan Brudzynski is here and he can give you the regulatory commentary and Peter can break this out, but we’ve been working as you know on cost reductions for a long time and I would just say that this automotive influence here it’s a double edged sword.
On one hand we’re dealing with what we’re dealing with in the economy, on the other hand, we have learned a lot from the automotive industry about how they go about doing continuous improvement and as you know in 2005, we took out a significant amount of cost.
In last fall when we started to see, the margins start to shift for us, we sat back and we said, we benchmark and we know that we have opportunities in all of our operations to move our operations closer to where they need to be and we want to engage our employees around this cost reduction in the middle of this crisis and basically position the company to get better. So, it was interesting last fall.
People said ?Is there really more and can you get it?? and we said, ?Yes.? We feel that our cost reduction muscle is stronger than doing this through blind cost cutting. So as we went into this, there were some clear directions to say you can’t do this by cutting line clearance or pole top maintenance, you can’t defer planned outages.
We have to go about this by getting into our processes and driving out waste and doing this across the company; everywhere from my accounting department to my investor relations department, to our service centers to the power plants, to the executive suites. We are doing this from top to bottom and from one side of the company to the other.
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