Question-and-Answer Session
Operator
(Operator instructions) The first question comes from the line of Paul Patterson – Glenrock Associates.
Paul Patterson – Glenrock Associates
On the O&M, how should we think about that coming back and how will decoupling deal with that I guess?
Dick Rosenblum
There is sort of two categories of the O&M reductions. One are reductions we would expect to sustain through future years. That is primarily as a result of renegotiating some contracts. We have taken all service contracts that are more than six months old and asked for decreases. As you would expect in this economy we are seeing some of those.
The majority of the reduction, however, is pushing off work and reducing things that will in fact come back in future years. You would expect the majority of the reduction to show up in later years and it really consists of things like outages on power plants that because of lower sales were rescheduled into out years, minor maintenance that was rescheduled to the outer years.
Connie Lau
Let me correct. The overhauls.
Dick Rosenblum
I’m sorry. Overhauls.
Paul Patterson – Glenrock Associates
How does the decoupling work with that? In the absence of the base rate case, how do you get recovery of that? I know [inaudible] and what have you but how should we think about that O&M and how it would impact volumes? Assuming the decoupling order similar to the settlement you have enacted prior to the beginning of the year?
Connie Lau
In each case the base level of that is in the rate case and then the rate adjustment mechanisms will actually pick it up on an index level so that is how the financial part of it would work.
Paul Patterson – Glenrock Associates
So in the absence of base rate cases we are going to have higher O&M in 2010? Is that correct?
Connie Lau
That is correct. Then that is the reason we are anticipating we would be filing a 2011 rate case as well that would then reset that base.
Paul Patterson – Glenrock Associates
When would that come about?
Connie Lau
The 2011 would have to be filed before the middle of the year in 2010.
Paul Patterson – Glenrock Associates
So the middle of 2011 that we get relief on that?
Connie Lau
Correct.
Paul Patterson – Glenrock Associates
As far as the decoupling case you mentioned you hope to have one by the end of the year. Is there anything we should think about in terms of watching that process?
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