CNP
#Yes, <UNK>, I think it's difficult and not appropriate to comment on what I think the outcome here is going to be.
We are continuing to look at this.
It could take different forms and as you know, we are in the middle of this process and we will be in a position later in the year to I think clarify the questions ---+ or give answers to the questions you are asking.
Yes, I don't think you can automatically assume that that's the outcome.
Yes, again, <UNK>, I think it's a similar answer here.
We've been obviously observing what's going on at the PUC here in Texas, but we are in the midst of doing this evaluation ourself, and at this point, we are not prepared to comment on it.
We will be in a better position to comment later in the year as we conclude our evaluation.
Yes, <UNK>.
We have higher accretion related to our Enable investment in 2016 relative to 2015.
And the accretion related to the Enable investment is a result of the accounting that comes out of the impairment charge that we took at third quarter and again at year-end.
The accretion element for our EPS should be $0.07 per share this year relative to $0.01 per share in 2015.
Yes, sir.
Hold on, <UNK>, we are trying to get the exact information.
<UNK>, we have $6 billion of debt outstanding at year-end and less than that after first quarter.
So we have significant maturities in 2016, 2017 and 2018, plus we had some maturities last year aggregating to approximately $1 billion.
We do not expect to be a material increase in net borrowings over the next few years.
I talked about that in my prepared remarks.
And therefore, it's that $1 billion, which helps us reduce interest expense, as well as not increasing the amount of debt on the balance sheet.
There aren't any economic opportunities at this time to do that.
Starting with the last filing that we made, we filed on October 1, 2015, rates were effective November 23 of 2015 and the amount was $16.8 million.
We haven't concluded the specifics of our filing for 2016, but it's very likely we will file in the third quarter and we don't have a dollar amount to share just yet.
I will ask <UNK> to answer this.
Yes, the Minnesota PUC deliberated on the final order last week and while we are not in receipt of the final order yet, we expect that early June sometime.
They did make some decisions and especially with regard to the cost of capital.
So let me share a few of those with you.
They decided on a 9.49% ROE and a 50/50 debt equity capital structure.
We were a little disappointed in that 7.7% of that debt capital was at short-term rates.
But while we were disappointed in that, we do anticipate that the final rate increase amount when we get the final order will be in line with our expectations for the financial performance of the business and consistent with our overall guidance, and we do expect to be able to continue to earn right at that allowed ROE.
And we really don't experience much lag in Minnesota once we've filed a case because we are allowed to put interim rates into effect, and those have been in effect at the $48 million level since sometime last year.
There could be some, <UNK>, after we get the new rates into effect, but, as you said, we are on track to continue to file every other year, and we have substantial rate base additions that we are continuing to make there.
And so we will do everything in our power with O&M and other decoupling mechanisms certainly helps because that captures the lag from ---+ or not the lag, but any under recovery from usage variation.
So we will do everything we can to earn as well as we can towards that allowed return.
No, not to what we shared back at the fourth-quarter call back in February.
No, that won't require any additional capital.
As you mentioned, the purchase price was $77.5 million plus working capital adjustments, and we are working very diligently to integrate that acquisition and we expect to have that completed within the next few months.
And that will contribute to our growing income at CES, as I mentioned in my prepared remarks, of $40 million to $50 million on an annual basis starting in 2017.
Those guarantees relate to our tax basis in Enable and so they may expire or may look to put other guarantees on in order to manage our tax position.
Sure.
We closed a significant of projects to rate base in the fourth quarter of last year, so that contributed to increase in rate base and the increase in depreciation.
We also had capital with shorter depreciable lives that increased the composite rate.
So it's a combination of more rate base and a higher composite rate related to, including but not limited to, IT capital.
That's correct.
As <UNK> stated in his remarks, we are well on our way to integrating Continuum.
We closed on April 1 and today is May 10, so we do expect it to be modestly accretive this year, but I think it's too early in the process to report as to how much that might be.
As I said in our prepared remarks, we are very pleased with our cash generation from operations, and the way we look at that is to back out the funds collected for principal amortization associated with transition bonds, as well as the interest expense associated with that.
But that cash from operations the first quarter, you are right, covered our CapEx, covered our dividends and we paid down $100 million in debt, so very strong.
For the year, as I said, we are expecting to borrow incrementally $150 million and we said on the year-end call that 2017 looks like we will be paying down debt.
So we've not thought beyond that with respect to other uses.
It's a balance between capital investment on behalf of our customers, maintaining our solid credit quality and then thinking through what we do for our shareholders.
We will be thinking about that, but we've not shared any thoughts on that at this time, <UNK>.
We don't have a big presence in the East and we really don't add much in that regard with this acquisition, but it clearly gives us additional scale and reach in particular in some of the markets in the West; gives us a bigger presence in Colorado, for example, which we've been trying to do because we think there's opportunities out there.
Some of the things that we are already finding in terms of synergies with that acquisition is they have some good relationships with government and school districts, and so we are using that to complement our national accounts and some of the other customers where we have a strong presence.
And then just in general to take advantage of scale economies as we put these two businesses together.
We think we are going to have several opportunities on the supply side and other areas to be more efficient and to hopefully capture better margins as we integrate the two businesses.
What we might get with the acquisition is they had some choice customers and we used to be in that business.
What I mean by choice is residential customers being able to choose their provider for natural gas.
And so we think that might present an opportunity to us within CES for a new line of business, as you say.
And we've got a great customer platform in our utility business, and so we will see if we can pick up some additional opportunities in that particular segment of the business.
<UNK>, the answer to your question is yes.
It is a good proxy for it.
So we are not seeing a reduction in use per customer.
The comments about reduced usage had to do with a year-over-year comparison based on the implications of weather, the changes in weather.
So when we weather-normalize, we end up with usage that continues to hold essentially flat at the residential level.
Yes, flat on a use-per-customer basis.
Yes, it doesn't change our forecast for the year.
We still ---+ it's all part of our consolidated guidance that we've given.
We anticipated some of this, I will say, because some of this is timing.
There's a timing element involved with right-of-way revenues, as well as with some of the O&M expense.
So it's down in large part due to what I will call timing-related events that we were anticipating, and those will be compensated for, reversed, throughout the balance of the year.
We are looking that up.
Hold on one second.
<UNK>, one way to think about this would be the heating degree days at the electric business, which is Texas, which were 86% of normal compared to 135% in the first quarter of last year.
On the gas side, as <UNK> said, we are largely hedged, so those heating degree days were 87% this first quarter compared to 113% of last year.
Weather had some effect, but not material effect to us in the quarter, largely because of the hedging mechanisms that we have in the gas business that <UNK> reviewed, as well as our hedge in the electric business which we use for the winter.
So we intend to mitigate weather impacts as much as possible and practical.
<UNK>, I think the non ---+ after the hedging, the impact was probably less than $5 million for the quarter.
Yes.
