Anthony Crowdell: Great. And just lastly, from the disallowances on the coal CapEx and it’s currently an appeal, does the company get recovery of the operating expenses associated with what the capital that was disallowed? I’m sure there’s additional capitals running these SCRs. Do you recover the expenses associated with that, whereas if you do prevail in the Appeal Court, that, that also could be a potential tailwind in earnings?
Andrew Cooper: Yeah, Anderw, we do get recovery on the cost and the results year-over-year impacted by those costs kind of coming into our income statement without offsetting revenues. So what you really see, if there were a positive outcome would be the recovery on the investment in there alongside the cost.
Anthony Crowdell: Great. Thanks for taking my question, I appreciate it.
Jeffrey Guldner: Yup. Thanks, Anthony.
Operator: Thank you. Your next question is coming from Nick Campanella from Credit Suisse. Your line is live.
Nicholas Campanella: Hey. Good morning, everyone.
Jeffrey Guldner: Hey, Nick
Nicholas Campanella: Hey. So, I guess, just starting on 2023 drivers, what was the driver of the lower tax-rate? I think it’s 10% versus last year it was closer to 14%, can you just update us on that?
Jeffrey Guldner: I think the lower effective tax-rate has — hasn’t kind of — there is a combination of factors in the lower overall tax rate. And you know, there is a variety of puts and takes in there around tax credits and the like.
Nicholas Campanella: Okay. So possibly just tax credit driven. And then on your just credit outlook, I think you kind of mentioned in the deck, 16% to 18% range. Where did you end the year? And then what’s the feedback from the agency has been in terms of whether they are looking for — before moving on the negative outlook and is it GRC related, is the numbers related? And what’s your willingness to defend the Ba1 rating here if you have to.
Andrew Cooper: Yeah, Nick. So the agencies will calculate, I don’t think I’ll put out how they view the FFO-to-debt number at year end. The 16% to 18% is sized around where the agencies would like us to be today. You saw both Moody’s and Fitch this month reaffirm their current outlook, the current ratings as well as the negative outlook. And you could take a look at their positions, but ultimately absent some exogenous factor, they’re really looking to see the rate case outcome to make determination about the ratings and any future changes they make to the downgrade thresholds. We’re committed to that 16% to 18%, that’s what keeps us in our — the your last part of your question, that’s what keeps us in our current category.
You’ve got Moody’s with 18% threshold right now and S&P with a 17% to keep us at our current rating and return to stable 13% for a downgrade, that they are one-notch lower right now. And then so, we use that 16% to 18% target to keep to the current ratings. We’ll have to see, as I said, after the rate case of the rating agencies readjusted at all what the targets are for downgrade.
Nicholas Campanella: Okay. And then just one last one for me, in your prepared remarks upfront, you kind of mentioned this regulatory lag docket. What’s the outcome that stakeholders are trying to solve for here and what are some of the mechanisms you’re exploring, if you could maybe update us on that?
Jeffrey Guldner: Nick, I think it was just more of an indication of the new commissioners coming in. I think, both of which had indicated that they don’t like being one of the lowest if not the lowest-rated commission in the U.S. from like RA. And so this was an effort to begin to talk about the things like forward test years and other things that you typically see discussed in other jurisdictions. So it’s a little early to see exactly what will come from it. I think again the tone is good because it’s an indication. There is benefit to customers from having a good performing utility and I think we saw that come out loud and clear after the last rate case outcome. And I think that’s a recognition of let’s talk about in a public stakeholder driven way what some of those mechanisms are. So I think that’s a positive sign, but it’s pretty early in the process right now.
