Marty Kropelnicki: Jonathan, that’s challenging to predict into the future what would happen. But right now, without decoupling, and I believe Dave reported that we’re at about 10%, 90% of consumption that is predicted in the rate case. And because of that, all the mechanisms — but for the one mechanism related to lost revenues from the drought, the other mechanisms are based on actual consumption. And the drought memoranda the mechanism related to lost revenues from the drought will capture the lost consumption revenues associated with the drought for a period of time but that is uncertain as to how long that mechanism will continue with the governor having removed mandatory conservation and still left in place as executive orders related to continuing drought or conservation efforts for the state.
Jonathan Reeder: Right. And when did those mandatory conservation measures get looked at, was it in like early April?
Marty Kropelnicki: It was in April.
Jonathan Reeder: Okay. So that 90% is against what’s actually included in the GRC settlement, partial settlement?
Marty Kropelnicki: Correct. That’s right.
Jonathan Reeder: Okay. Got you. So, I guess, with the loss of full decoupling and taking into account those usage trends as well as, I guess, the cost to supply the water that should be coming in much more favorable to you. Do you expect, I guess, by having the Monterey-Style RAM this year, is it going to be a headwind or a tailwind to kind of EPS? Is it still a headwind given the loss of decoupling? Or these lower supply costs, are they potentially going to help you to a decent amount that flow to the bottom line?
Dave Healey: Jonathan, I can take that question for you. So, I don’t know what the consumption is going to be in the second half of the year. But if it is — if we’re still at 90%, there will be a small positive value in the Monterey-Style RAM mechanism..
Jonathan Reeder: Okay. And that’s netting, I guess, the revenue impact against the supply?
Dave Healey: Yes. It’s just — it tracks a single quantity rate to the actual quantity rates filled. And there’s a certain level. And right now, we’re at 90%, we’re not at 100%. But it’s not going to be a big value.
Jonathan Reeder: Okay. All right. No, I appreciate the help there. Congrats on a good outcome in the cost of capital and good luck to getting the rate case at least proposed decision before year-end results.
Operator: [Operator Instructions.] Davis Sunderland with Baird, your line is open.
Davis Sunderland : Good morning. [indiscernible] this year. We don’t get too deep in [indiscernible] of course, but in the event that there isn’t a proposed decision by the end of the year, how should we think about the changes to CapEx deployment next year or risk going beyond the end of 2023? And then I have one follow-up.
Marty Kropelnicki: Sure. That’s a good question because, obviously, our capital program is included in the 2021 general rate case. And the company takes a risk-based approach to prioritizing its capital. So, the capital spending we’re doing now, we feel are necessary improvements that we have to make in order to maintain the system and to do things like wildfire, [indiscernible], things that we’ve had to step up our efforts for climate change adaptation. In the event, there is a capital project that is not approved of the rate case, it will get picked up — in the 2021 rate case, it will get picked up in the next rate case, the 2024 rate case. So, any financial exposure is really going to be associated with the depreciation in the interim period and how we pick it up in the next rate cycle.
