Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Paul Ridzon - KeyBanc.
Paul Ridzon - KeyBanc
Hand full of questions, one is can you review, how we earned for the forward looking, we’ll be set and will be set?
David Meyer
The ERM for the ERM always gets reset when complete our power supply costs in our rate case and we just have a tentative settlement subject to the commission approval that would have with our on the power supply and capital structure that we reached in September. So we still have to go through the approval process with the Commission on that, but that will set our power supply costs, in which we will calculate ERM for 2010.
Paul Ridzon - KeyBanc
You just look at the gas trip is a big driver of how that is set?
David Meyer
Yes, we’ll look at well in power costs, but the gas strip, gas is a driver of that, but also forward power costs.
Paul Ridzon - KeyBanc
What takes you from $6 million absorption of the ERM to positive in the fourth quarter?
David Meyer
A lot of that is the same very similar, that the comparison of the current natural gas strip in the fourth quarter and power costs compared to what we had in our rates effective as of January of 2009.
Paul Ridzon - KeyBanc
You are currently based on $8 gas strip? I s that the number?
Mark Thies
Yes. $8 in change.
Paul Ridzon - KeyBanc
Then from a rate making perspective and I guess regulatory balance sheet, what is going to happen to the stimulus funds? Was that go in its equity, obviously you can’t earn on it, but what is that due to the regulatory capital structure?
Mark Thies
I think it’s just CapEx.
Scott Morris
Contribution to eight construction.
Paul Ridzon - KeyBanc
So you’re going to spend some $19 million of government funds on smart meters?
Mark Thies
We don’t expect to get any earnings on that.
Scott Morris
I mean, we will get to spend that. The government will pay for it, but we don’t expect to add that to rate based and to get to earn on it. We will get to earn on what we spend in our share of that contribution, that matching share. That’s what we’ll get to put in rates, the other I’ll get pay. The customers will get the benefit of the capital that we deploy, but we’re not going to get to earn on that.
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