Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Dan Jenkins – State of Wisconsin Investment Board
Gale Klappa
Good afternoon Dan. Dan you know its Halloween coming up and I heard this rumor that they already had an arrest warrant made out in your name on [Mithlin] Street, so you know, kind of good luck with that.
Dan Jenkins – State of Wisconsin Investment Board
No, I’m leaving town so they can’t pin that on me.
Gale Klappa
Probably a good move Dan. How can we help you today.
Dan Jenkins – State of Wisconsin Investment Board
Just a few things, first I was curious, I missed a couple of the numbers when you were going through the effect of the various changes like the cool summer and the various cost savings and so forth. I was wondering if you could give me the breakdown again.
Gale Klappa
That’s never happened to you before Dan but we’ll be happy to go over the numbers.
Allen Leverett
Yes and Dan, on page eight of the earnings package if you could refer to that. Retail sales as it relate to weather, that was a negative effect 2008 versus 2009, so that was $22 million. Fuel recoveries was a negative swing of $19 million and then our estimate of the economic, the change in the economy, our estimate of that effect on retail sales was a $14 million swing, again negative.
The other single largest item that was actually going the other way positive item, related to O&M reductions, so that was $11 million. So really the big three negative factors were weather, economy, fuel recoveries and again that fuel recovery is more of a timing within the year but a difference nonetheless.
And then finally O&M reductions were an $11 million positive swing.
Dan Jenkins – State of Wisconsin Investment Board
Okay on the O&M part of that, how sustainable are those savings going forward or are they more, how much of, just deferral type items.
Gale Klappa
There’s a combination, obviously we have taken as Allen mentioned earlier, we’ve taken very seriously the downturn and reprioritized a number of the work projects. Some of those work projects will have to be done eventually, there’s no question about that.
But I would say this, a large percentage of the O&M savings that we’ve achieved this year has really come from headcount reduction. In fact if you just look at the end of the third quarter a year ago and compare that with the end of the third quarter this year, our full time equivalent headcount is down 2.4% and we’ve really reduced our headcount by gosh, almost 1,000 people in total over the last five years.
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