Michael Moehn: Yes. Just a couple of comments, Marty, a good overview. And I — look, I do think the team has collectively, between us and staff and others, continue to work very collaboratively, trying to really work through these issues. I think we all want the best answer, obviously, for customers, making sure that we’re delivering on all of the policy objectives that Marty talked about, that CEJA is really wanting to achieve as well. And I think as Marty talked about, that difference today of about $131 million, about 62% of that is really tied up in ROE and cap structure. And so, there is this sort of fundamental difference on ROE today. They’re still recommending the old formula that was approved under EMIA, which was basically 580 basis points plus the 30-year treasury versus we really think the law says, look, it’s a cost of equity determined by the commission under — their authority under the laws of the state that govern these rate reviews.
But I mean, even putting that aside, I think the important thing to remember too, if you took a current mark on that ROE today at 580 basis points, I mean, it’s something approaching 10. And I think the only other point I would make too, is I think — and under kind of traditional cost of capital, under like a CAPN or DCF, the staff did also point out, I think they would have been at about 10.02 but then revert it back to this formula. So anyway, I gave you those details because I think it does kind of narrow a lot of the issues in terms of where the difference is, Jeremy.
Jeremy Tonet: Got it. That’s very helpful. And maybe a follow-up to peel back a little bit more, if I can, if there is anything left that can be said here. Just specifically with regards to your rebuttal strategy on the notably lower-than-expected ROE, the $700 million capital discrepancy, $100 million medical OPEB overfunded balance. Just wondering if you could speak to any changes in receptivity overall given Ameren’s rebuttal?
Michael Moehn: Yes, Hey Jeremy, this is Michael again. Yes, I mean, just again to be clear, I think that receptivity has shown in the fact that I think we’ve closed that gap. So you continue — you referred to the $700 million gap. I’d say that gap is about $350 million today. So I mean, there’s been some good work that’s been done on both sides to agree that, look, here’s some additional support and go ahead and accept those. That really ultimately — Marty mentioned going from 56% to 70% of the ask, that was really a large part of it. The other items that you noted are still out there, the post-retirement issue that we’ll continue to argue for, we do think that it should be included. Customers are benefiting from this. It’s an overfunded plan. It’s throwing off gains that are actually reducing rates for customers, et cetera. We’re going to continue to make those arguments, and we’ll see ultimately where it goes through the process over the next couple of months.
Jeremy Tonet: Got it. That’s very helpful. One just quick last one, if I could. With the decrease in energy prices, as we’ve seen, has bid pressure kind of faded from the conversations with the public and policymakers? Or is it still front of mind in discussions?
Michael Moehn: No, look, I mean, I think the overall backdrop is much better today I mean, given what’s happened with commodity prices both on the natural gas side. And so you’ve actually already seen some of those benefits start rolling through on the PGAs, et cetera. I think we’ve talked about that. And then certainly, some of these capacity auctions and the corresponding energy auctions are certainly providing relief to customers. That’s always a good thing to see, right, in terms of just making sure that we’re trying to get the lowest possible bill for customers. So I’d say it’s less of a conversation today and it’s a good tailwind as we think about the future.
Jeremy Tonet: Got it. That makes sense. That’s helpful. I’ll leave it there. Thanks.
Michael Moehn: Okay. Thanks, Jeremy.
Operator: Our next question comes from Sophie Karp with KeyBanc Capital Markets. Please proceed with your question.
Sophie Karp: Hi, good morning and thank you for taking my question. [Multiple Speakers] too in this Illinois situation little more? The — and you provided a lot of color already, but I’m just curious if you think there’s a legitimate legal argument as to why the old formula should be used in the new framework, why the staff is taken to that gold formula here.
Marty Lyons: Yes. Sophie, this is Marty. One of the things CEJA called for in the legislation was that the cost of equity be determined consistent with commission practice and law. And we believe that means the use of traditional methods like capital asset pricing model, discounted cash flow analysis, IEIMA which was the prior legislation, had some very explicit language that required the use of formulaic. So we’ve certainly argued that the intent of CEJA was for the commission to use its traditional methodology. And I would note there that the staff and their testimony as part of the multiyear rate plan, instead of that traditional CAPM and DCF kind of analysis was used that they would get an ROE of about 10.02 as a recommendation. And of course, in our gas rate case that’s pending, the staff there recommending a 9.89. So at the end of the day, that’s what we’re hanging our head on is that we believe that CEJA called for the use of that kind of methodology.
