So, at the 13%, as the rate agencies just published, we expect to be at that 13%. If we get the corporate alternative minimum tax mitigated, we would be closer the mid-higher, like that 13.5%, 14%. And we are hopeful to know that final regulations or at least preliminary regulations by the end of the year. You asked how that relates to our equity. We have no change in plans related to the 425. So, said another way, if we got the corporate alternative minimum tax alleviated, we would still do that 425. And so you can expect us to do that sometime between now and 2025. The last thing I will say is just as it relates to Moody’s and S&P, there is a little bit of difference in the calculation. S&P will sort of trend at that 13% over that time horizon.
Moody’s, however, because of the calculation, there is some cash timing differences. So, we expect to be sort of on the low end in ‘23, ‘24 and then on the higher end in the back end, such that you average 13%. And that’s really driven by some of the formula rate timing at ComEd with the true-up coming for ‘22 and ‘23 coming in, in ‘24 and ‘25. But that’s sort of – that’s why we give you the average because we want to sort of neutralize some of that cash flow timing as well.
Unidentified Analyst: Appreciate the color. I will leave it there. Thanks.
Calvin Butler: Thank you.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Carly Davenport from Goldman Sachs.
Carly Davenport: Hey. Good morning.
Calvin Butler: Good morning.
Carly Davenport: Thanks so much for taking the questions. You had mentioned kind of O&M levers to offset mild weather this year. So could you just talk a little bit about how O&M costs have been tracking relative to your expectations? And then what you expect to see for the balance of the year from a rate of change perspective on O&M?
Calvin Butler: So initially, we have always maintained a philosophy that we will drive O&M costs below the rate of inflation. Now that was over the traditional rate of inflation that we have been experiencing over the last several years, keeping that around 2% to 2.5%. And as I mentioned, we are trending strong and keeping or meeting our objectives of doing so. And that has always been our benchmark. The CEOs who are sitting around the table, we talk about keeping our O&M flat and seeing what levers are driving it to possibly go up, which allows us that flexibility when you have unseasonally warm winters or anything else in PECO or the like, we got 75% of our rate base, our 73% is decoupled. So, a lot of the weather impacts that you are talking about really focus on PECO primarily as the largest utility that’s done. Having said that, we will continue to manage those costs. We never take our foot off the gas in doing so. Jeanne?
Jeanne Jones: Yes. And as it relates to the weather for ‘23, we had a combination of offsets across the platform, mostly at PECO, BGE and PHI given ComEd has the formula rate true-up on O&M. But across those three operating companies, we saw O&M levers, whether it was taking advantage of labor vacancies, lower T&E and contracting spend. And then in addition to that, PECO had some favorable depreciation. So, the combination of all that was probably around $0.04 of the $0.07 of weather, and then we had the ComEd carrying costs, which were a benefit this year. And it’s a benefit this year relative to last year because we did not have this large reg asset really sort of was built up at the back end of last year. And the interest deposit rate on that was zero for the commission.
So, we weren’t getting an interest offset, even though we were incurring interest on that last year. However, now in this year is a benefit both to last year and to guidance because we have the larger reg asset this year. And while we are still incurring the carrying cost on that, the ICC reset the deposit rate at 5% this year. And so relative to guidance, we are now having an offset to that, that wasn’t baked into our plan. So, that’s probably about $0.03 of the $0.07. So, you put all that together, that’s how we are offsetting the $0.07 of weather. And to Calvin’s point, we just continue to focus on what else we can do to drive down those costs. And we are just starting to scratch the surface there.
