Gale Klappa: Well, I think it’s a great question. I think the short answer is really to be found in the docket that now is being authorized. And we’ll come to a conclusion by June 1, or we expect early June at the latest. So there were under that safety modernization program, you call it QIP, which was the piece of legislation that authorized a rider to recover these investments a bill rider. There were several buckets of activity that were included in that legislation and recovered through that rider. One of the buckets, we feel just has to continue, as Scott mentioned earlier, it’s the emergency work. And it’s the work that, for example, we do in conjunction with the city of Chicago, they are actively replacing aging water mains, and it doesn’t make a lot of sense to rip up the streets twice.
So we work together. And we work together very well, to accomplish what we need to accomplish as they were doing their work. That bucket also got paused in the Commission’s order, as well as the big piece of the plan, which is the neighborhood work, going neighborhood by neighborhood based on risk, to upgrade the safety and put a new modern state-of-the-art piping. So the piece that we’re saying to them, that look, we really need to continue and get appropriate recovery for is $134 million. It’s that bucket of work, relating to emergencies, things that we have to do and to work, for example, like with the city of Chicago. So that piece is what we’re asking for recovery on. And we should get an answer, Scott, I believe by early June.
Scott Lauber: Yes. We expect that in June. And then the remaining as you look at the neighborhood programs, and we think it’ll take about a year to go through the docket. That then would have to be looked at in a forward-looking test yard imagine as we put rates together. So it’d be really two steps here.
Gale Klappa: I was just going to say watch the space. There’ll be a lot of activity over the course of the next 12 months.
Julien Dumoulin-Smith: Absolutely. Excellent. All right. Well, look, I’ll leave it there. Thank you, guys, very much for the details and best of luck, and I’m sure I’ll see you guys soon. All right. Take care.
Operator: Thanks, Julian. And our final question today comes from the line of Paul Patterson with Glenrock Associates. Paul, please go ahead.
Paul Patterson: Following up on Julien’s question on rate lag, as you’ve I’m sure aware that you were one of — a number of decisions that happen late in 2023 that were not what the utilities kind of expected. And, as you know, Gale, you’ve been doing this a long time. We may be entering into an environment where there just is less appetite for the CapEx spending and more of a desire for bang for the buck kind of approach or regulatory lag, as Julien was bringing up? I guess I’m sort of a bigger picture question. A, mean, at least what I’m looking at that. That’s what I see. If you disagree, let me know. And then secondly, how do you think because you’ve been doing this a long time, and you’ve seen this kind of environment in the past, I’m sure what — how you might approach a situation in which there’s just a hesitancy to continue with mechanisms like the S&P or at least augmenting them or changing them in such a way that, that it might be a bit more of a challenge.
So just wanted to, this is one of your big picture if you could sort of address that.
Gale Klappa: Yes, be happy to. And as you ask the question, there are two specific things that really come to my mind. The first is that, I mean, we’re obviously only going to make investments that follow public policy, and public policy of a safety modernization program on the future of gas in Illinois are going to be decided in the next 12 months. Having said that, I believe there’s a certain amount of investment that’s simply going to have to take place for the safety of Chicagoans. What amount that is, I don’t know, in terms of what decision might be made. But I can’t imagine the Safety Modernization Program. Maybe it’s changed, maybe it’s not, but I can’t imagine that investment going to zero. Just from a pure practical standpoint, I don’t think that’s feasible in terms of protecting the City of Chicago, or preparing the City of Chicago for an energy future that could include renewable natural gas, hydrogen, or any other type of fuel.
So that’s kind of piece one. Piece two, just remember that under normal circumstances, Illinois as a future test period, their rate cases have a one year future test period, which does help to mitigate any kind of issue related to regulatory lag on a normal ongoing basis. And then I guess the other thing that I would add is, you look at just the adjustments we’ve made since November 16, in our capital plan. I mean, I mentioned earlier, three mega trends are driving the kind of investment opportunity that we have in front of us, which is robust. And those three mega trends are basically reliability, the incredible economic growth that we’re seeing in terms of expansion and attraction here of businesses, and industrial customers, and in the third and these are all important decarbonization.
So I don’t see regardless of the outcome in Illinois, any type of really diminished opportunity, Scott, in terms of the broad, broad avenues that we have for productive investment that support those trends.
Scott Lauber: No. When you’re looking at it, what do you think about the decarbonization, it’s more than that, because a lot of these power plants that are retiring, it’s either invest hundreds of millions of dollars there, or in a carbon free resource and doesn’t cost anything for the fuel. So there’s also cost savings there to long term with the production tax credit. So, we do have a lot of opportunities here.
Gale Klappa: Paul, does that respond?
Paul Patterson: I appreciate it.
Gale Klappa: All right. Well, I think we wore you guys out today. So that concludes our conference call for this afternoon. Thank you so much for your questions and for participating as always, and if you have any additional thoughts or questions, Beth Straka is happy to pick up the phone. She can be reached at 414-221-4639 Thanks, everybody. See you along.
Operator: Thanks, Gale. Ladies and gentlemen, that concludes today’s call. Thank you all for joining and you may now disconnect.
