Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Paul Ridzon with KeyBanc; please proceed.
Paul Ridzon - KeyBanc
Good morning, how are you?
Bob Skaggs
Good morning. We’re fine.
Paul Ridzon - KeyBanc
So it sounds like the settlement discussions are not dead, but you’re less optimistic than you might have been a while back?
Bob Skaggs
Yes, that’s accurate. As I said in my prepared remarks, we’ll never say, never. We’ll continue to develop ideas and surface proposals, but as we sit here today, we’re focused on the hearing that’s actually in motion in Indianapolis and expect it to conclude at week’s end.
Paul Ridzon - KeyBanc
Any incite as to what the major stumbling blocks to a settlement might have been?
Bob Skaggs
Obviously, the discussions are confidential. I’ll just give you the overall view that we have about the case. Number one, first case in 20 years of very, very large complex case with many, many moving parts, and from day one we’ve mentioned that cost allocation, particularly among industrial customers, residential commercial customers was going to be a key issue, with likely be contentious, and hard to deal with. That’s still the view we have today.
Paul Ridzon - KeyBanc
Okay, you got a charge at transmission and storage on an interest rate hedge. Did you not carve that out as an unusual item?
Bob Skaggs
We didn’t carve it out as an unusual item and actually that charge relates to the Millennium Pipeline and our partnership in Millennium Pipeline. If you’d like, I could ask Steve Smith to give you a little bit more detail around that particular item.
Steve Smith
Sure, Bob. Thanks. Hi, Paul, how are you?
Paul Ridzon - KeyBanc
Good.
Steve Smith
Yes, the Millennium charge is related to the hedges we had in place for a portion of the debt at Millennium. Partnership decided that it made economic sense to roll the hedges an additional 12 months, given that our borrowing costs currently are so low at Millennium, and so that charge is the result of rolling the hedge forward another two months.
Paul Ridzon - KeyBanc
Is that $4.2 million after tax?
Steve Smith
That’s correct, yes. That’s not all $4.2 million. It’s about $7.9 million is the total charge for us before tax.
Paul Ridzon - KeyBanc
Are we going to be living with this run rate on pension for the entire year, or is there an opportunity in ?09 to open that up again?
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