DTE Energy Holding Company Earnings Call Nuggets: Rate Cases and O&M Outlook
Kevin Cole – Credit Suisse: Congrats on the IRM tracker. Slide 7 is helpful, but, I guess, given your comments, given that this is a five-year tracker, are you expecting that you are going to stay out from filing a DTE Gas rate case for the five-year period, while earning your allowed return?
David E. Meador – EVP and CFO: We will go into multiple year plans next week in more detail, but as you know, one of our (Northstar) is to earn our authorized return year in, year out. We are also very focused as you know also, on cost and customer bills, so our goal is to stay out of rate cases as long as possible, while meeting our objectives and we have laid that out to the electric business, and this tracker, it will allow us to stay out of rate cases for multiple years. So we are evaluating that. Certainly, we will talk in more detail next week, but this is going to give us a period of stability, which is joining the electric business. As I am anticipating, we will not be in rate cases for several years at least.
Kevin Cole – Credit Suisse: So with the 1Q DTE Gas operating earnings coming in at $96 million versus full year guidance at $113 million to $118 million, that seems to imply that the fourth quarter would be somewhere around $17 million to $22 million, but DTE Gas normally earns or at least should earn between $50 million and $60 million. So for the rest of the year, do you expect to ramp up your O&M spending, and I guess bank some O&M for the future or just kind of come out at the end of the year above your guidance range for DTE Gas?
David E. Meador – EVP and CFO: As you are pointing out this is a great start to the year on many segment of the business and certainly better than last year. Our normal practice is to update our forecast and review that with the Board and evaluate what you are pointing out, which is our lean in an invest scenario. So our goal is to earn our authorized return to the extent that we have favorable conditions, including weather. Our inclination is to pull ahead investments in the business and the opposite is also there. We are evaluating that right now. We are going to talk to our Board and we will take you through that in more detail next week at the Analyst Meeting.
Julien Dumoulin-Smith – UBS: I wanted to ask you a very quick question here regarding your O&M. As far as it goes, first quarter seems to have been quite positive. How do you feel now with regards to full year? I mean, should we continue to expect this kind of a trend, a decline year-on-year throughout the balance of the year?
David E. Meador – EVP and CFO: That’s another I hate to continue to kind of push questions to next week, but we are going to update you next week on not only the full year, but we are going to update you on multiple years next week, including our thinking on O&M. One item I would like to point out is that what we have said is we are going to continue to work hard on O&M. We need to do that on behalf of our customers and one of the (plans) on that is just continuous improvement, but we have also signaled that we are always looking for structural changes in our costs and using that as a lever to stay out of rate proceedings as long as possible. So, we were able to achieve a couple of our structural changes and continue to work on continuous improvement and we will lay that out for you next week in terms of our thinking on O&M and how that all plays through both in the gas and the electric business in terms of staying out of rate cases as long as possible.
Julien Dumoulin-Smith – UBS: Perhaps let me clarify. In the first quarter, how one-time versus sustainable were the cost reductions that we did see here, if you will? Maybe that’s a more type of a question, some of the lost gas improvements, for example?
Peter Oleksiak – VP, Controller and IR: I would say, probably you’re close to two-thirds of that will stick. We did have some generation outage timing in there, but as Dave mentioned, some of the structural cost changes and I too was mentioning that the benefit expense will continue to flow through. The lost gas improvements for now – we did see a physical lost gas come down by 40% in the quarter, and we are anticipating that will stick as well…
Julien Dumoulin-Smith – UBS: Perhaps, just broadly speaking again, going back to the notion of staying out, is there any potential to use some of the amortization of the liability here beyond 2014 on the Electric side? Any kind of sense as to how that’s going to play out here?
David E. Meador – EVP and CFO: The amortization of the liability, are you speaking to the former decoupling…?
Julien Dumoulin-Smith – UBS: Yes.
David E. Meador – EVP and CFO: That again is something that we are evaluating. Right now, the way that the regulatory proceeding is laid out, we don’t have an option right now. We have to amortize that into 2014, and as we have indicated our current thinking is that we would file in ‘14 for rates in ‘15, but as we continue to press down hard on costs, we are asking ourselves the question that you are asking, which is could you ever move that amortization if you didn’t need it in this year end. It’s something we are evaluating but right now we have not made any decision. We are also evaluating the (feel) from question can we stay out even further, not file in ‘14 and possibly push that one year later and again we will go into more detail next week, but it’s just directionally an indication of how we are managing the company in our costs which was right now if we could file in ‘14, we will do that, but if we can push ourselves further or when eventually we file, make it a smaller number as possible by still hitting our growth targets and maintaining our balance sheet targets, we are going do that.
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