Andres Sheppard: Yes. The second part was just around the…
Olga Shevorenkova: Oh the energy stuff, yes.
Andres Sheppard: Interest rates kind of what you might expect here.
Olga Shevorenkova: So the interest rates is not about energy cost. So we’re customer of utilities, and we are well distributed across the country. So the good thing is that we’re not tied to any wholesale volatility and we’re not tied to any particular utility due to distribution nature. So utilities do tend to pass on some of the costs to its customers. But because of the distributed nature of our network, it doesn’t happen at the whole network level at the same moment of time. So it happens in the pockets of the network. We’re constantly monitoring it and would have some sophisticated forecast and probability weighted assumptions on which parts of the networks will increase — which parts in the network volunteers. Now what we also want to remind everybody is that we can — we’re absolutely free in passing that those increases back to our customers.
We’re not regulated in terms of how much we can charge our customers, and we have a very sophisticated approach to outpricing which I think we’ve discussed multiple times on these calls where we have a time of use price and location-based price and subscription price, and so there are ways of trying to charge price-intensive customers more and allow access for price-sensitive customers at some other maybe less popular times and whatnot. So even if we’re seeing those increases that doesn’t erode into our margin because we’re able to pass it on consumers pretty much right away as we see fit.
Operator: Your next question comes from the line of Gabe Daoud with TD Cowen.
Gabriel Daoud: Congrats Cathy and Badar, to both. I was hoping we can maybe get a little more color on just CapEx trajectory from here? Is it fair to assume that spend could actually decelerate in ’24, just to preserve cash and considering utilization rates are quite high in some of our — across some of your portfolio. Would love to get a sense of the CapEx trajectory and then how much is the long lead times on transformers really impacting you right now? And when do you think it could become a bigger problem?
Olga Shevorenkova: Yes. We’ll be talking about 2024 — various 2024 plans on our next call. But I don’t think deceleration is on the books, but we will obviously talk about all kinds of 2024 metrics in a few months from now.
Catherine Zoi: Yes. And let me just add on sort of the transformer thing. The transformer thing isn’t slowing us down at all. The transformer — the reality is that we just take account of the fact that transformers are going to take a long time. So we plan for it, right? So we’re being helpful to utilities, and we have a line of sight into which utilities have ordered transformers for the places because I think as I mentioned before. We go in and we meet with every single utility where we’re building, and we give them our 12 to 18 months to 24 months kind of our game plan of where we’re thinking we’ll build so that they can actually make the orders for any service upgrades that are required, and there are lots of — most places now do require a service upgrade, as I think we’ve described.
Some of them are going to get their equipment faster than others. But we’ve got this machine that under the direction of Dennis Kish, our COO, is extremely agile. It’s got to be the best in the business. And so we are able to — like, we were able to shift our teams around to build where we can build when the utilities are ready to accept that — when the utilities are ready to install their parts of it as well. So we’ve got a very big funnel in a very good line of sight to what we’re building. So that’s not — it’s not a gating item. It’s just what may mean that we’re not turning on as many as quickly. You’ll remember a couple of years ago, I thought, “Oh, let’s get this all down to 6 months from start to energization. Well, it’s not there yet and maybe in a few years, it will be, but that’s okay because we now plan for it.
Gabriel Daoud: Okay. That’s helpful. And then I guess just as a follow-up, could you maybe talk a little bit about — I lost my train of thought. Demand charge reform, that’s where I was heading. Is there an update there on maybe new jurisdictions and making some progress with demand charge reform in areas outside of California? And I’ll just leave it there.
Catherine Zoi: Yes. So we’ve got a great team that does all of our utility regulatory advocacy and interventions. And again, I don’t remember off the top of my head the sort of half dozen or does it — between a half dozen and a dozen jurisdictions where we’re active. But that demand charge reform, extension of EV rates that are conceivably sunsetting. All of those things are on the boil and again, well outside of California. I just I am not remembering off hand, but Gabe, happy to take that on notice and get back to you guys on where those rate cases are underway.
Operator: There are no further questions at this time. I’d like to hand things back over to Cathy Zoi for closing remarks.
Catherine Zoi: Thank you for attending, everyone. This is our quarter’s financial and business update. We all appreciate your interest in EVgo. And while this is my final earnings call with you, I remain financially, intellectually and emotionally invested in EVgo success, and I look forward to witnessing and celebrating the progress under Badar’s leadership. Thank you so much.
