It was to accommodate changes in a three-year cost of capital proceeding when the interest rate market and the interest rate environment changed. So, we would continue to pursue that. We think that additionally not dissimilar to 2022 that there is no extraordinary event. The market is acting the way it is and the same manner with us is the broader financial market. So we will go through that process as we filed the advice letter.
Nick Campanella : Thanks for all the information.
Pedro Pizarro : Thanks, Nick.
Operator: Our next question from Julien Dumoulin-Smith with Bank of America. Your line is now open.
Julien Dumoulin-Smith : Hey. Good afternoon team. Thanks so much for the time we appreciate it very much. Hey, just coming back to the earlier question, just to understand a little bit more, you talk about depreciation sensitivity. Can you explain the – just how that contributes to the earnings variances in ‘28? I appreciate the sensitivity I wondered how that sensitivity might apply in this case? Where it might come from?
Maria Rigatti : Sure. So, the sensitivity that we provided it’s on the – in the appendix page. It gives you a range of outcomes. And there’s two different elements at work there. We provide you with the capital forecast that is tied to our request – the request that we made in the general rate case. And when we do that, we have a lot of data from the general rate case that allows us to put that together. When we give you the other points on the curve, when we take CapEx down, just to provide you with a little bit more insight as to what that would look like in terms of rate base, we make some very simplifying assumptions. So when we convert those lower CapEx levels into rate base, we made simplifying assumptions about the timing of when the CapEx is spent.
We made simplifying assumptions about the type of CapEx that gets reduced. So, when we get to the lower end of the capital range, you end up with that depreciation variance again. So, at the lower end of the CapEx, you’ll get a $0.15 – you will need to make a $0.15 adjustment. And it’s very similar to the depreciation variances that we talk about during the rate case cycle when CapEx turns out to be a little different than what’s embedded in your actual authorize. The other piece of the sensitivity that we provided is, we’ve made a request in the general rate case or – and we made a depreciation proposal. We know that sometimes, the outcomes of that may vary. And so, we’ve also given you a sensitivity as to what would happen to earnings and ultimately you can patch rate base, so what would happen to earnings if our depreciation proposal is modified from what’s requested?
So those are the two things.
Julien Dumoulin-Smith : Thank you for the clarity there. And just to follow up real quickly, to some of the equity capital ratio, given the waiver here, where do you stand today on that for the – at the utility level here? And what are you forecasting through the forecast period to be at ‘25 or ‘28 and ultimately what kind of time period are you forecasting it back to presumably post the conclusion of the proceeding to get back to operated level?
Maria Rigatti : So, the proposed decision that we received yesterday extends our capital structure waiver. So, I guess, the most basic answer to your question is we are at 52% because we have the waiver. Roll that forward, we are not assuming that we will get any cost recovery for the ‘17 and ‘18 Legacy Wildfire claims and deaths. So if you roll that forward and we don’t get that then we would have to at the end of that process propose a plan to get back into conformance with the authorized capital structure. We can propose a plan that we think is appropriate. We could do a number of things. We could start with proposing that the differences be excluded because this is not rate base, right, so we exclude this permanently from our capital structure.
