PEG
#Thanks.
Yes so you're exactly right, <UNK>.
You think about where gas prices were last year, and where gas prices are this year, they are lower, and so you see that come right through that line.
Of course oil prices are lower too, but gas is the predominant fuel here, and you're seeing that directly come into that line.
Remember I also mentioned that the prices for wholesale energy were lower, and that goes along with it, right.
So get lower gas prices and lower power prices preserves in spark spread for us, and that what also commented on the value that our hedges provided this year on a year-over-year basis because of that reduction, but that is directly related to the observable market price for gas versus last year.
No, no, this is just the pure fuel cost, in cost of goods sold.
So that's really gas price forecast question right.
So we really just use what's in the forward curve when we think about gas prices going forward.
The important thing to keep in mind, though, is we've got the base loaded is hedged in the current year, so we're really talking about this happening in the combined cycle, and therefore the ability to preserve the spark spread, regardless of how gas moves, protects us to an extent.
But other than using the forward curve, it's really hard to predict gas prices.
Good morning.
So I believe it's about 150 miles per year, and it would take us 30 years.
So the (inaudible) gas system is closer to 800 miles, but it would take us 30 years at that spending rate to replace everything.
So it varies, <UNK>.
Our base ROE is 11.18%, we get a 50 basis point RTO membership adder for 11.68%.
We had, I guess we still have a couple projects that get anywhere from 25 to 125 basis points in addition.
However, our last four or five projects we filed for have not received any incremental ROE incentive component.
So long winded answer, but there is no one simple number.
It starts at 11.18%, and it goes up to 12.75% or something like that.
That being the Susquehanna-Roseland project, being the only one that got that big an adder.
It comes out to about 11.07%, which is just a fraction of a bip outside of the range.
Good morning John.
Right, so sure John.
So the impact to PSE&G's earnings for the first quarter benefited $0.01 to the benefit of O&M from the Sandy recovery that goes to PSE&G.
The remaining piece of the settlement that we had ---+ the remaining about $54 million, we have to go through the allocation process, and we will do that and discuss how that will flow when we do the second quarter results.
So a couple things to remember.
On the power side, we don't flow it through operating earnings, that's below the line, which you can see in the reconciliation.
We don't do that because power spend was below the line as well, and on the utility side, remember that the recoveries we got, including a portion of the $50 million ---+ a small portion of that, was for PSE&G in the past, goes primarily to balance sheet, because a lot of the spend for storm recovery that's recoverable under our policies, capital spend and that's on the balance sheet.
So there's balance sheet and regulatory asset offset, and just $0.01 of impact for the P&L from the first quarter, for Sandy at PSE&G, and we'll do the second quarter piece when we do the second quarter results.
I think that's right, in the context of the guidance, correct.
So you've seen that we're almost done with the Sandy settlement being booked, with just $54 million to go, and you've got a big piece already booked in the first quarter, and the P&L impact for operating earnings purpose was just $0.01, so proportionately you're thinking of it the right way.
No, I think one of our slides shows you the capacity factors, and we had a slight dip in nuclear capacity that was purely related to an outage at sale on that, it wasn't planned for and otherwise the units would have been at or better than last year in terms of nuclear.
Our gas unit's picked up the slack from some of that, as well as some of the lower prices that <UNK> paid attention to earlier, but the base load coal units (inaudible) our strong winter season.
Gas prices were not below that faithful $1.90 number of 2012 that resulted in some of the dispatch of those, and of course our New Jersey coal units as well as our Connecticut coal units did run a little bit during the winter months, because of the unavailability.
The hedging is our peakers, using the demand at the level they would be called upon.
So really no change in terms of the number this year.
Remaining a kind of fundamental shift in the market that we haven't over the past four or five years.
I don't think so.
I think if anything the forward price curve would suggest that we'll continue to see robust capacity factors for our combined cycle gas turbine units, and the nuclear units will run flat out, and that's pretty much the same.
Sure, <UNK>.
The one thing that's different ---+ so what we like to have shown you in the March meeting is what's been approved, so notwithstanding our complaint in front of FERC, the $120 million, <UNK> correctly described it as $110 million to $130 million in artificial island was not included in the March investor presentation, as baked in.
Similarly, so that's the only change of things that have been finalized and are now part of the plan.
The other piece that's significantly different is that we filed ---+ have not received approval ---+ for $1.6 billion over the next five years in this gas system modernization program, and that's not in the utilities capital program that we showed you in March.
Could you just hold on a second <UNK>.
I want to get my controller off the floor.
He fell down.
(Laughter) No, you know, obviously those plants have made significant environmental commitments to them, and the capital requirements going forward on those plants from any kind of regulatory point of view is minimal.
The real question will be their age and their ability to perform in a CP market, and the rules there just aren't known.
So to the extent that the risk reward profile of CP changes our thinking on those plans, then we would have to address that issue, but as of now we're happy to run them on coal in the winter and on gas in the summer, and they do just fine for us.
They are part of an overall fleet, and that fleet has multiple dimensions to it that work well for us (inaudible).
But I'd say that the new factor in the calculus will be what does CP mean.
1500.
Sure.
So, this is ---+ we're finishing ahead of schedule.
Thank you all for joining us.
I really do hope you view this as kind of a quintessential quarter for us, as opposed to anything special.
I grant you, we didn't have anything fancy to tell you about, just steady progress in terms of new investment opportunities at the utility and solid operations all around the Company.
In other words, what we like to do: just deliver on our commitments, and then some.
I know that Carolyn and <UNK>, and to a lesser extent I, will be on the road over the next couple of months, and we look forward to seeing you.
Until then, just enjoy your Spring.
Thank you all.
Thank you.
