David Arcaro: Okay. Got it. That makes sense. I appreciate that context. And then, was curious, obviously, the decline in natural gas prices that we’ve seen is a nice tailwind for customer bills. But when — just based on kind of storage levels and the seasonal use of that gas, when would customers potentially see the lower prices flow through into rates?
Gerardo Norcia: They’re seeing it right now. As a matter of fact, I was talking to the President of the gas company the last couple of days. We’re going to lower the factor by about $1 here in the next little while. So we’re seeing the prices come down quite nicely from their peak.
David Arcaro: Got it. And could that lead to a year-over-year decline overall in the fuel portion of gas? Or is that going to take still some time to kind of flow through the higher-priced gas that might have been collected late last year?
Gerardo Norcia: I think we’ve already seen a year-over-year decline, and it will continue to decline. We’ve made a series of reductions already in the last several months in our gas prices. Our gas recovery, that’s a factor. And the most significant one is coming here very shortly. It’s about $1 decline in price.
Operator: Your next question is from Michael Sullivan with Wolfe Research.
Michael Sullivan: Maybe just wanted to flip over to the IRP. I think we have intervenor testimony coming up in the next couple of weeks here. Just what should we expect from that? And then — in terms of settlement timing, what should we think about as coming first between the IRP and the electric case?
Gerardo Norcia: So I’ll start by saying that the expectations that we see is there’ll be challenge to the timing of some of our retirements, especially the Monroe Power Plant. So I think you’ll see that. We won’t be surprised by that. And we will also perhaps see some desire to increase energy efficiency. I think many — some parties will challenge natural gas as a future reliability source. And of course, we’ve got strong views on that, that the natural gas enables a large build-out of renewables as technology continues to improve around providing baseload generation. So I think those are — those will be the issues, if you will. And — but there’s strong support for a large portion, I believe, of our IRP. At least that’s our early indication that it’s received favorable reviews informally, if you will.
So — we look forward to the testimony that will be filed. In terms of timing of settlements, we expect that the IRP will be settled first just because it was filed before the rate case and just the timing of testimony and process puts the rate case a little behind the IRP in terms of the opportunity for settlement discussions. So that’s how we expect the process to unfold.
Michael Sullivan: Okay. Great. That’s helpful. And then maybe a question for Dave. Just in terms of the FFO to debt, you target the 15% to 16%. Can you give us an indication of where 2022 finished up? And then to what extent you’re still waiting on deferred power fuel cost recovery into this year?
David Ruud: Yes. That’s a good question. Yes. ’22 ended up right around 15%. And as you mentioned, the big driver of that being a little lower was the fuel cost recovery. So we had our power supply cost recovery was a use of cash for us in ’22, but will be more of a source of cash as we’re recovering, the majority of that in 2023. So we’ll see our FFO to debt be a little bit higher, a little bit better in 2023.
Operator: Your next question is from the line of Andrew Weisel with Scotiabank.
