As we look at the PCAM and the rate case issues going forward, clearly, we have some more capital to sell, as we noted, O&M costs. We also have ROE. And then PCAM has a number of important components. And I think a little history is also helpful here. The PCAM mechanism we have was put in place on 15 years ago, really to address what some of the leaders at that time called skin in the game on the company side for plant operations, in particular, our coal plant operations at Boardman. And today, many of those circumstances are really very different. Our volatility in energy prices and in the market is generated really as we move more towards renewables as our markets are much more integrated and we’re balancing more renewables across the entire West and so the mechanism needs to be updated to reflect the current reality as we transition to a higher percentage of renewables but a more integrated West wide set of markets.
And so we’re proposing that we remove the dead band and that we have 90-10 sharing sort of out of the gate off of the baseline that we set through the annual update tariff every fall. And that we exclude what I would call sort of the market excursions that generally come from significant events, which are not even related to our own operations. Those are often trigger energy electric alerts across the Western Interconnect and so they’re pretty well known and able to be established. We’re also looking to establish a 2.5% price cap in any given year. So the balance should there be excursions that exceed that would roll to future years and that would also be on a plus and minus basis. So that’s a lot of complexity. The issues, I think, are really around how do we work through the changing market conditions and understanding the dynamics with parties and come to agreements as we move forward.
But so far, the discussions have been collaborative and will certainly be ongoing. There’s nothing easy about these topics.
Shahriar Pourreza: Got it. That’s helpful. And Maria, just — there’s been a lot of noise in recent weeks on wildfires. There’s no inverse condemnation in Oregon. But one of your neighboring utilities has been dealing with negligent. Can you just speak to the conditions across the territory at the moment and any other procedural or legal color since your most recent plan was approved?
Maria Pope: Sure. So, first of all, we don’t comment on any litigation, whether it be ours or our peer utilities in this region or in other places. I would say that we couldn’t be more pleased with our automatic adjustment clause approval that took place just this May, allowing us the prudent recovery of wildfire costs, both on O&M and on capital. And then as we move forward, we do have very dry conditions across the Pacific Northwest. You’ve seen a lot of the news on wildfires in Canada very early in the season. That’s unusual. And we’re probably as a company, I’d say, on heightened alert. We look at wildfire and I start to think of it several major buckets. The first one is ongoing prevention and mitigation of wildfire and that’s everything from vegetation management to how we run our distribution system and our transmission system, to how we deploy technologies, high-definition, AI-focused cameras that have made a big difference, weather monitoring, all of those sorts of aspects.
And we work hand in glove with our local communities, first responders, firms to make sure that we have the best information. We’re also working with the Oregon Department of Forestry, U.S. Forest Service and BLM on a regular basis.
Shahriar Pourreza: Yeah.
