DUK
#Yes, <UNK>.
The O&M ---+ the non-recoverable types O&M was down $0.04 year-over-year in the quarter.
And again, we had about $0.05 of storms delta quarter-over-quarter offsetting that.
But we had the $0.04 benefit.
I think our original capital plans for the year are still intact.
I think it's just a shaping during the year.
And, <UNK>, if you look back ---+ even at 2015, we spent about 20% of capital last year.
We're kind of in that range this year in the first quarter and then it picks up over the course of the year.
So the pattern looks similar to what we've experienced in previous years.
Yes, <UNK>.
As we had mentioned in the February call, we're looking at the majority of these cases to be back-loaded in the five year time frame.
But that's always subject to scrutiny of costs and events that are going on at the time.
And in fact, we are looking at accelerating a rate case we may file notice this year for a filing for Duke Energy progress South Carolina jurisdiction.
So we're always looking at what's the appropriate time to go in, what's our cost structure look like and the investment timing related to that.
I'd still say that the majority of the cases are in the backend of the five year time frame.
But the South Carolina is an example of an opportunity we have that we need to move on perhaps earlier.
<UNK>, the rate case timing in Florida ---+ you may recall we have the GBRAs in place in connection with the building of the plants.
And that, along with us, has a stay out through 2018, I believe.
And then in Indiana we've been pursuing the [TDSC] ---+ the grid investment which will give us an ability to track and that will ---+ in hearing ---+ hope to get approval in Indiana, which will give us opportunity to reset prices for those investments.
And we'll continue to monitor whether load trends and other things would change our timing in Indiana.
But we believe the tracker that we're pursuing is the highest priority rate activity in that jurisdiction.
Thanks, <UNK>.
Hello.
My quick question was you mentioned on growth on the gas side that you might look at other gas assets.
So just to clarify, are you looking ---+ are you talking about building on your platform for gas with acquisitions.
Or are you looking for organic growth to build on your gas platform.
The first objective is to close the sale or close the purchase of Piedmont Natural Gas.
And we believe that we'll have organic growth opportunities within that platform, not only for new customer additions but expansion of the interstate pipeline system in the Carolinas as we continue our strategic move from coal to gas.
And then beyond that, for midstream or LDCs there was a question earlier that addressed our interest in that.
We will consider those types of additions to the portfolio that makes sense, compliment what we're trying to do.
But our primary objective is closing the transaction, focusing our attention on integration, focusing our attention on growth organically, as I outlined, and then other opportunities we'll evaluate as they arise.
Got you.
Thank you, guys.
That's all I have.
Our next question will come from <UNK> <UNK> with SunTrust.
If you look in the side deck, <UNK>, the ---+ on slide 13 it gives you the full year assumption for commercial.
And that business is commercial wind and solar, which, as you know, have tax credits as an important part of their economics.
So that gives you a range or a perspective on the magnitude of that contribution.
More heavily PTC.
Just because of the nature of our portfolio, <UNK>.
On the PTC side we look at PPAs that are in the range of typically 15 to 25 years in that type of range.
And the PTC benefit, <UNK>, as you know, was a 10 year benefit.
Certainly we've been in the business ---+ started modestly in 2007.
And then you can look at our kind of capital contribution and growth 2012, 2013, 2014 ---+ so I would say early in that PTC period generally.
Let me make a comment and then <UNK> can continue.
<UNK> commented a moment ago, <UNK>, that we see the potential for rate cases in South Carolina in 2016 that's consistent with capital spending and cost structure and earned returns.
And so we do have rate case potential in South Carolina in the very near term.
And then later in the five year period, in North Carolina, that will be the result of regulatory lag showing up on capital investment that is occurring now and will occur into the future.
I commented on trackers in Indiana and Florida.
But at some point, we'll address updating those rates as well.
So I think regulatory lag for any jurisdiction where we have historic test periods or the need to use base rate increases to achieve prices is going to have some regulatory lag associated with it.
And that's the careful analysis we closely watch in determining the timing for filing.
And I would add, as we said in February, we had a slide on our five year growth and we showed the lag was about 3% negative.
And that's an average number over the five year period.
It will vary year per year.
And it is, as <UNK> said, related to the jurisdictions where you've got gaps between rate cases and you build up investments during those gap periods.
So we're working on that and planning around those events.
Thanks, <UNK>.
<UNK> morning, <UNK>.
Thanks, <UNK>.
It is hard to predict storms, obviously.
The past three years we've seen winter storms that have hit us in the range of $50 million or $60 million a year.
But whether that's normal or not, I would hesitate to say.
We try to impute an amount that we think about in our budgeting.
But you'll have during the Summer season the potential for hurricanes in the Southeast.
And then in the winter storms across our jurisdictions, other than Florida, typically there's the potential.
Hard to predict but we've seen winter storms the past three years in the neighborhood of $50 million or $60 million.
That's correct.
Yes, let me give a little color on this.
Typically outages from storms do not affect volumes very significantly ---+ as one point to make there when you're looking at the whole breadth of things.
I would say that the ---+ I always want to say this, when you're looking at a quarter in particular, short periods of time, you have to be careful about weather normalized data.
I think the first quarter of 2016 was mild, particularly March.
And I don't know whether we pulled all of the weather impacts out appropriately in the first quarter of 2016.
Correspondingly, the first quarter of 2015 was very, very cold.
And I don't know whether all of the weather was pulled out of that quarter as well.
So you're comparing these two weather normalized periods and it shows that the weather impact may not have been that significant.
I suspect that it may have been more mild than what we showed in the first quarter here but I don't try to guess what that could be.
So we just roll with the data.
I like to look at the 12 months rolling more critically there.
We did, as we acknowledged it, it was a bit of a soft quarter.
But I think the 12 month rolling numbers are in line with what we've been forecasting.
And I would want to emphasize that in response to a relatively weak load, we have aggressively pursued our cost structure to offset that.
That's part of our long term plan.
<UNK>, the only thing I would add to it is we have standard methods of identifying what is weather related and non-weather related.
And what <UNK> is commenting on is that standard methods can be impacted in periods where there's extreme temperature.
So extreme cold or extreme warm weather that we experienced in March.
So that all leads us to look at longer time periods so that we don't have those anomalies that could exist in any quarter.
And that is really what has lead us to this 12 month rolling average discussion on load because we think that is more indicative of trends we're experiencing.
And as you can imagine, we watch this really closely and manage the business for a low load growth environment.
Thank you.
Hi, <UNK>.
<UNK>.
Yes, sir.
That's roughly right, <UNK>.
Yes, I think you could get in the ballpark there and it's a little ---+ that's a rough way to do it.
But again, I think getting weather normalized data is as much art as science.
And when you get an extreme period like we had in March and comparing it to an extreme period like the prior year, I think you can get fluctuations that can make that comparison a little distorted.
We think our customer growth in volumes are in line with our broad prediction levels and we'll keep an eye on it.
The other thing that we look at, <UNK>, is multi-family housing versus single family homes.
We're starting to see some positive trends in the Carolinas where there are more single family home construction opportunities.
But coming out of the economic downturn, a lot of the growth was in multi-family units, which by their footprint, use less energy than a home.
So I think we're closely monitoring this and the call to action for us is to insure that our cost structure and the way we manage our investments and assets are consistent with the trends we're seeing at the top line.
And we believe we have a demonstrated track record in managing our business that way.
<UNK>, we're on target for the range of $4.50 to $4.70 that we talked to you about.
This is the first quarter.
I think to give you anymore specifics on placement within the guidance range is just premature.
As you know, the third quarter is our most significant quarter.
And we're managing the business with identifying rate increase opportunities.
<UNK> talked about South Carolina.
Of course watching costs is part of that and we would like to see a longer trend on the sales growth to continue to monitor where that is progressing.
So on track to achieve what we set out to achieve at the beginning of the year.
(laughter) Thanks, <UNK>.
Okay.
Yolanda, thank you.
And thanks, everyone, for hanging in with our fire alarm and our farewell to <UNK> <UNK> and welcome to Mike Callahan today.
And most of all, thank you for your interest and investment in Duke.
We look forward to meeting with many of you over the next several weeks and months and look forward to continued discussion.
So thanks again.
