Jeffrey Guldner: Sure. So any decision at the Court of Appeals, if it were positive decision would be remanded to the commission for further actions. There wouldn’t be really anything done retroactively. All I can really give you sort of the rule of thumb. You’re talking about roughly $200 million disallowance and capital structure that’s in the 50-50 range, applying ROE to that, and that kind of gives you the rough EPS impact of beginning to recover on that. The timing of that would be dependent on future action of the ACC if there were a positive outcome.
Andrew Cooper: Yeah, I’m sure you remember too, that there may be a further appeal, so the Court of Appeals if they issue a ruling, it’s — it goes in our favor. I can see the Sierra Club, taken that up and seeking Supreme Court review. So that could add some additional time on. But ultimately, as Andrew said, it’s going to-end up back at the commission.
Shar Pourreza: Okay. Perfect. That’s fantastic. See you guys soon. Appreciate it.
Jeffrey Guldner: Yeah. Thanks, Shar.
Andrew Cooper: Thanks, Shar.
Operator: Thank you. Your next question is coming from Anthony Crowdell from Mizuho. Your line is live.
Anthony Crowdell: Hey, good morning. Thanks so much for taking my questions. Just a couple of them. First-off, anything management could do to help mitigate the volatility in the pension expense?
Andrew Cooper: Sure, Anthony, it’s Andrew. As I mentioned, we’re going to look at all of the options, including around regulatory recovery. Our priority in the rate case is a constructive outcome. And we’ll look at pension when we go into remodel strategy and one of the various levers that we need to think about in what a constructive outcome looks like, but it’s not the only lever and it’s not the only cost that we’ve got to deal with. So there is certainly precedent where there is a split test year to look at on pension expense from what is now a historical period. And that’s something that we’ll consider as one of our options. In the last rate case, we average the two years surrounding split test year but regulatory recovery remains one path that we continue to look at.
But then of course, any other levers we have around our other costs, O&M, interest expense, all those things that we can do there to make sure that we meet our forecast. That’s really the focus. As I said earlier, we’re committed to the pension strategy. You know 2022, all asset classes for the most part, face losses and discount rates went precipitously. So we’re just –we’re living with the reality of that, mitigating it as best we can.
Anthony Crowdell: Great. And if I could jump on Shar’s, I believe it was a question Shar asked. About — I think you’re looking for more clarity from the rate case where you potentially may see more clean generation spending. Is it just comes down to the clean track of proposal needs approval? Is that what investors should be focused on to see if we do get more clean generation spend?
Jeffrey Guldner: No. Anthony, it’s more — I think it’s a little more than that. I mean, it really is looking certainly at clean tracker, particularly as a potential vehicle to give the tax credit. The customers in a more contemporary manner. I mean, that makes a lot of sense to us as a way to optimize the — getting a little bit more utility owned generation in the mix. But it’s going to be the overall framework that really drives what we do, right, like we’ll look at the results of the case and figure out how we optimize the mix of both the PPA and then the utility-owned generation and storage resources. And so can’t really flag what that looks like here, but we have opportunity, I think to get a more optimized mix for customers. Then we’re seeing now and just because of the last rate case, we are not able to do utility-owned assets at the level that we think is probably optimal.
