Operator: And next, we’ll go to Steve Fleishman with Wolfe Research.
Steven Fleishman: Yes. So just kind of similar — similar question on the deferred fuel. If you just looked at the year-end number on FFO to debt, how much do you think deferred fuel represents in terms of impact that’s lowering that number? Looking at FFO to debt?
Julia Sloat: So we’re at 13.2% as of year-end. And so if we get above that 14%-ish range by year-end 2023, I don’t know that looks about — I don’t say entirely 100 basis points, but it’s pretty significant.
Ann Kelly: Yes. I think it actually might be a little bit less than 100 basis when you think about it because we have $1.7 billion of deferred fuel at the end of the year.
Steven Fleishman: Okay. That’s very helpful. And then just on the ROE improvement to the 9.4 in this year’s guidance. Is it — is there any states that are really driving a lot of that? Are there any states that they’re still kind of the most room to go after ’23?
Julia Sloat: Yes. So here’s where I’ll draw your attention to. And I know we have the little equalizer chart here in the slide deck somewhere. I think it’s on Page 41. And so you can get a sense of kind of where we are hanging out on each of the respective operating company entities. But what we do have in play right now is that at PSO, so Oklahoma, we have a base case underway. So that should help us to begin to heal the ROE, the earned ROE at PSO. So stay tuned for that. So base case in play there. And then as I mentioned in my opening remarks, we recently were able to finalize our Louisiana base case and then reactivate this formula rate plan. So that will get underway to, again, to help move SWEPCO’s ROE back up closer to its authorized levels.
Kentucky, obviously, you know what we’re doing with Kentucky. And APCo, I think APCo, that’s why the legislation in Virginia becomes so important to us. because we’re in an under-earning position right now. We got the outcome of the Virginia triennial case, which should be beneficial to us in 2023, but I would still expect APCo’s ROE to be under pressure until we get, hopefully, some resolution around Virginia legislation that to the extent that we’re able to modify the regulatory recovery methods that are being employed in that particular state, we’ll begin to see some healing on that particular ROE, too. So our triennial versus say a biennial, AEP is going to lead more toward a biennial or an annual type look versus necessarily that triennial because unfortunately kind of tracks us in an under-earning position, so stay tuned.
We’ll see how the Virginia legislation process moved along. Our team is absolutely at the table with all the other stakeholders. So that sounds constructive. So we’re hopeful and we’ll see this developing situation through and then we would expect something to be in the improvement territory for APCo.
Steven Fleishman: Just for clarity on that last point in Virginia, why does — what are things that would help you in the Virginia law, it go into the biannual so you don’t have to go so far between cases or something else?
Julia Sloat: Anything shorter, Steve, is going to be better for us — so that will move us in a more productive situation or direction for APCo in particular. I mean an annual rate trout would be fine, too. But again, you can see the direction. So that will be important for us as we work through the different solutions that are being contemplated now because I know we have, I think, 3 bills that are being evaluated or at least shopped in Virginia. But as I mentioned, AEP is absolutely at the table, and we’ll see how this ultimately shakes out. Obviously, the benefit needs to go to the customers, but then also our investors as we work to improve the ROE.
