Fortis Inc.
Q1 2015 Earnings Call Transcript

Published:

  • Operator:
    Ladies and gentlemen, thank you for standing by. This is the conference call operator. Welcome to the Fortis First Quarter 2015 Conference Call and Webcast. During the call, all participants will be in a listen-only mode. There will be a question-and-answer session following the presentation. [Operator Instructions] At this time, I would like to turn the conference over to Donna Hynes, Director, Investor and Public Relations, Fortis Incorporated. Please go ahead, Ms. Hynes.
  • Donna Hynes:
    Thank you, and good morning, everyone. Welcome to the Fortis, Inc. first quarter 2015 earnings call. Fortis participants on the call this morning are Barry Perry, President and CEO; and Karl Smith, Executive Vice President and CFO; as well as additional members of our senior management team. This conference call is webcast, and the supporting slideshow is available on the Fortis, Inc. website at www.fortisinc.com. A replay of the call will be available later today, and the transcript will be posted to our website shortly thereafter. Our first earnings release and related materials are also available on our website. I would like to remind you that all forward-looking information provided during this conference call is subject to the forward-looking statement contained in the supporting slideshow. All non-GAAP financial measures referenced in our prepared remarks are reconciled to the related GAAP financial measures in the slideshow. Also, unless otherwise specified, all financial information referenced is in Canadian dollars. Barry Perry will begin with a corporate update, and then Karl Smith will review the financial results in detail and discuss regulatory matters. The presentation will be approximately 15 minutes, after which time we will turn the call over to the conference operator for your questions. During the question-and-answer period, we will take questions from the investment community first, followed by the media, if time permits. In order to provide everyone with an equal opportunity to participate, we ask that you limit yourself to two questions. If you have additional questions, please re-enter the queue. Also, we ask that you focus your questions on our industry, our corporate strategy, recent developments and key elements of the Corporation's financial performance. If you have any detailed questions, please follow-up with us after this call and we would be pleased to discuss them with you at that time. I will now turn the call over to Barry Perry.
  • Barry Perry:
    Thank you, Donna, and good morning, everyone. Fortis is well positioned for a strong 2015. Q1 performance was driven by our major regulated utilities and reflects the settlement of capital tracker matters at FortisAlberta. As we expected the seasonality of UNS Energy’s earnings had a dampening impact on earnings per common share for the quarter, which Karl will discuss shortly. However, we continue to expect that UNS Energy will be accretive to earnings per common share in 2015, particularly given the strength in US dollar. Our focus during the first quarter of 2015 was primarily in three areas; first the integration of UNS Energy, which is now complete; second, the execution of our $2.2 billion 2015 capital program, which was well advanced with over $550 million being invested in the first quarter and which saw the Waneta Expansion on line in early April; and third, the strategic review of Fortis properties and divestiture of our small non-regulated hydro asset in Upstate New York and Ontario. Both of these initiatives are consistent with our focus on the core utility business. Fortis properties currently represent approximately 3% of the corporation’s total assets. We expect to make an announcement regarding results of the strategic review by the end of the second quarter of 2015. Additionally, during the first quarter of 2015, we entered into an agreement to sell our small non-regulated hydro generation assets. The sale of these assets in Upstate New York and Ontario, which have a combined net book value of approximately $30 million is expected to close in the second quarter of 2015 and the second half of 2015 respectively. Following a decade of growth driven mainly by acquisitions, 2015 kicks-off a period of significant organic growth for Fortis. The $900 million, 335 megawatt Waneta Expansion hydroelectric generating facility in British Columbia came online early April, six weeks ahead of schedule and on budget. During construction the project maintained an excellent safety and environmental protection record. This investment in which Fortis holds a 51% controlling interest is supported by 40 year power purchase agreement, with BC Hydro and the corporation’s wholly owned subsidiary FortisBC. We are targeting 2015 contributions from Waneta Expansion in the range of $20 million to $25 million. Fortis is well positioned for a strong 2015 given the combination of a full-year of earnings from UNS Energy, contributions from Waneta Expansion, the resolution of capital tracker matters at FortisAlberta and the anticipated implementation of new rates at Central Hudson in July after a two-year rate free. Turning to our LNG opportunities; construction of the $440 million Tilbury Phase 1A LNG facility expansion project in British Columbia is proceeding as planned. The expansion will add a second storage tank and a new liquefier. The investment will be included in FortisBC’s regulated rate base and completion is expected before the end of 2016. The project will provide natural gas for the transportation industry for remote communities and from the marketplace in general. As an example in February FortisBC announced that it has entered into an agreement with BC Ferries to provide up to 300,000 gigajoules of LNG annually over the next 10 years for a three new intermediate class ferries. Since we initially announced our LNG expansion plans back in 2013 there have been considerable interest for LNG supply from the Pacific Northwest, Hawaii, Alaska and other international markets. FortisBC is in a unique position to meet further growing demand for LNG from domestic and foreign markets by leveraging its existing infrastructure to rapidly and cost effectively increase supply. Two significant LNG infrastructure project are currently being pursued. First; our Tilbury site has 35 acres of LNG's own land with ocean access that is suitable for further expansion. FortisBC is working towards a possible Tilbury Phase 1B second expansion of liquefaction capacity at the site at an estimated cost of approximately $450 million. A 15 year conditional contract is in place with Hawaiian Electric for most of this liquefaction capacity. The contract is subject to the approval by the Hawaii Public Utilities Commission. Secondly; FortisBC continues to move forward with an opportunity to expand its pipeline and compression infrastructure to the Woodfibre LNG site near Squamish, British Colombia. Woodfibre is a privately owned LNG processing export facility that is expected to be operational in 2018. The owner of the facility expects to finalize its investment decision by the end of 2015. The estimated project cost for the pipeline is approximately $600 million. The combined capital expenditures of over $1 billion for these two potential LNG projects, along with a further 200 million to upgrade the existing coastal gas transmission system in support of the projects have been approved by the Government of British Columbia. No further regulatory approval by the BCUC is required for either project. Expenditures for both projects will be included in FortisBC’s regulated rate base. We expect to finalize our investment decisions and plans by the end-of-the-year on these projects. We continue to invest prudently in our existing electric and gas networks to ensure safe, reliable and cost efficient energy services to our customers. Our forecast $2.2 billion, 2015 capital expenditure program represents an increase of almost 3% over 2014. In addition to the Waneta and Tilbury Phase 1A expansion projects, first quarter capital expenditures included US$46 million at UNS Energy to increase its ownership interest in the Springerville Unit 1 generating facility to 49.5%, upon the expiry of a leasing arrangement. Over the five year through 2019, capital expenditures are expected to total approximately $9 billion, driving a 38% increase in forecast mid-year rate base from $14 billion in 2014 to over $19 billion in 2019. This will represent a five year compound annual growth rate of approximately 6.5%. If you were to include the Tilbury Phase 1B project and the pipeline expansion to Woodfibre LNG site the five-year CAGR would rise to 7.5%. Over this five year horizon, we expect our capital investment will support continuing growth in earnings and dividends to our common shareholders. Our Q1 and Q2 2015 dividends had been declared at $0.34 per common share, which represents an annualized dividend of $1.36 for 2015 and an increase of 6.25% over last year. Fortis has increased its annualized dividend to common shareholders for 42 consecutive years, a record for a public corporation in Canada. To conclude, the number one priority of Fortis is the provision of safe, reliable and cost efficient energy services to our customers. Our focus over the next 12 to 18 months will be on the execution of the corporations, capital expenditure program, progressing our LNG opportunities and completion of a strategic review of Fortis properties. In all, I am very optimistic about our prospects for 2015 and beyond. With that update, I’ll now turn things over Karl who will discuss the financial results and key regulatory matters.
  • Karl Smith:
    Thanks, Barry and good morning, everyone. Earnings attributable to common equity shareholders for the first quarter of 2015 were $198 million or $0.72 per common share, compared to $143 million or $0.67 per common share for the first quarter of 2014. As Barry mentioned, UNS Energy had a major impact on quarter one financial results. Additionally, when compared these results to the first quarter of last year, several non-recurring items must be considered. The slide now being webcast provides an analysis of first quarter 2015 adjusted earnings and adjusted earnings per share. It removes from our results four non-recurring items, which are; acquisition related cost incurred in first quarter of 2014, pertaining to UNS Energy transaction, including interest on the related convertible debentures, a capital tracker revenue adjustment related to the 2013 and 2014 fiscal years that was recognized in this quarter, foreign exchange gains in the corporations expropriated investments in the lease electricity and the quarter one 2014 earnings of Griffith Energy Services, which was sold in March 2014. On this basis, adjusted earnings for the first quarter of 2015 were $179 million or $0.65 per common share compared to $146 million or $0.68 per common share for the same quarter last year. The increase from adjusted first quarter earnings reflects $20 million contribution by UNS Energy, as well as improved performance at our other major regulated utilities. These positive impacts were partially offset by increased corporate expenses due largely to financing costs associated with the acquisition of UNS Energy. The earnings of UNS Energy are highly seasonal, with approximately 75% of earnings contributed in the second and third quarters, as the use of air conditioning and other cooling equipment is highest during those periods. Consequently, the inclusion of UNS Energy’s results had an approximate $0.13 dilutive impact on earnings per comment share in the first quarter of 2015. That being said, we expect UNS Energy will be accretive to earnings per common share this year. Given that approximately 40% of our total assets are now in the United States, the strength in the US dollar is having a positive influence on financial results. We estimate that on average these 5% change in the US dollars to Canadian dollar exchange rate would have an approximate $0.04 impact on the annual earnings per common share. Turning now to our financing highlights. In the first quarter of 2015, the corporations regulated subsidiaries raised over $4 million of long-term financing at attractive rates. This included US $300 million issued by Tucson Electric Power, which is UNS Energy’s largest utility. Net proceeds were used primarily to refinance maturing debt to repay credit facility borrowings and to fund capital expenditure programs. We expect to apply the net proceeds from the sale of a small hydro assets and from any transaction associated with this strategic review of Fortis Properties for the $500 million of outstanding debt associated with UNS Energy acquisition. Cash flow from operating activities was $450 million for the first quarter of 2015, an increase of $185 million or approximately 78% [ph] from the first quarter of last year. This increase was driven primarily by higher cash earnings contributed by UNS Energy. Fortis has a life debt maturity profile with an average of $250 million maturing annually over the next five years excluding credit facility borrowings, additionally in March 31, 2015, Fortis and its subsidiaries had unutilized committed credit facilities of $2.1 billion providing the corporation with ample liquidity. Fortis continues to have strong access to capital. We remain rated A minus by S&P and A Low by DBRS, both with a stable outlook. These ratings which are among the highest for utility holding companies in North America are supported by our low risk business profile and our capital structure which on a consolidated basis on March 31 was 35% common equity, 9% preferred equity, and 56% debt. UNS Energy and its regulated utilities received credit rating upgrades from Moody’s regulated utilities receive credit rating upgrades from Moody's in the first quarter of 2015, we expect this will have a positive impact on our future cost of capital, which in the case of UNS Energy’s regulated utilities will directly benefit our customers. Moving on to the regulatory front; regulatory decisions were received in March 2015 on FortisAlberta’s Capital Tracker Applications and the Generic Cost of Capital Proceeding. The Capital Tracker Decision approved revenue for substantially all of FortisAlberta's 2013 through 2015 capital programs as filed. The Utility had previously recognized Capital Tracker revenue 2013 and 2014 on an interim basis at 60% of the applied for amounts. The Generic Cost of Capital decision reduced FortisAlberta’s allowed ROE from 8.75% to 8.3% and reduced the common equity component of capital structure from 41% to 40%. The revived ROE and common equity thickness, which are retroactive to 2013 and which will remain in effect on an interim basis for 2016, apply only to the portion of FortisAlberta’s rate base that is funded by Capital Tracker revenue. The net impact of these two decisions were recognition in quarter one 2015 of a positive $10 million Capital Tracker revenue adjusted related to 2013 and 2014. Additionally, Capital Tracker revenue for 2015 capital expenditures will reflect both decisions. FortisAlberta will file an application in May 2015 for 2016 to 2017 Capital Tracker revenue, Generic Cost of Capital proceedings for 2016 have commenced in Alberta. Prehearing meetings will determine the scope of the proceeding and other procedural matters are scheduled to take place in May and June, the hearings will commence on November 30, 2015. At Central Hudson, a Joint Settlement Proposal associated with this general rate application was filed in February 2015 to set new rates for a three-year period beginning July 1, 2015. New rates should provide the revenue required to support the US$215 million of capital expenditures made during the two-year rate freeze period, agreed to by Fortis regulatory approval of the CH Energy acquisition. The proposal includes our return of common equity of 9% and a common equity thickness of 48%. Public statement and evidentiary hearings were held in March 2015 and the Final Proposal was executed in April. The Joint Settlement Proposal is targeted to go to the regulator in June for consideration and approval. Finally, proceedings referred to as reforming the energy vision are ongoing in New York State. These are generic proceedings aimed at reviewing the role of distribution utilities, and aligning their investments and earnings with New York State policy goals. That concludes my prepared remarks and I will now turn things back to Donna.
  • Donna Hynes:
    This concludes the Fortis, Inc. first quarter 2015 earnings presentation. I will now ask the conference call operator to please open the phone lines for the question-and-answer segments of this call.
  • Operator:
    Thank you. [Operator Instructions] Your first question comes from Paul Lechem from CIBC. Please proceed with your questions.
  • Paul Lechem:
    Thank you, good morning. I wanted to ask about the regulatory decisions in Alberta, first on the reduction in your allowed ROE. Is there any – it seems to be, that’s a bit of a surprise especially to retroactive reduction in your allowed ROE, are you considering is there any opportunity for you to appeal that decision and what are your thoughts about that apply going forward?
  • Barry Perry:
    We’ve got our expectation Paul and we are going to appeal. In fact, we are going into another cost of capital hearing in Alberta, very quickly here, there is already a process being established to look at cost of capital for 2016 and onward, so I think our focus will be on the coming hearing.
  • Paul Lechem:
    How do you feel that would play out in terms of your upcoming GCOC decisions in BC, is that, would you see is applying or…
  • Barry Perry:
    Well regulators obviously governing each of their jurisdictions and I’m sure that decision in Alberta will be part of the evidence that’s put in front of the regulator in British Columbia, that’s just natural. This is a very low interest rate environment, the decision in Alberta is probably the lowest cost of capital in North America are pretty close to it at this point in time. We would hope that that’s the low-water mark here, but it depends I think on the environment that the British Columbia is in when decisions are being made on that hearing. We’ll have to wait and see where interest rates go from here really.
  • Paul Lechem:
    Okay. Can I just also ask, can you provide some more granularity or more color on the – you mentioned the combined amount of the Capital Tracker and the GCOC decision of $10 million, can you give us some more granularity. How is the breakout between two different dynamics?
  • Karl Smith:
    It gets very complicated very quickly, Paul, and luckily, well first of all let’s stand back, not all the revenue at FortisAlberta is affected immediately by that cost of capital decision because of the PBR regime, it’s the probably go-forward rate base that’s subject to included in the Capital Tracker, that gets impacted. So for 2015 for example, somewhere around 10% to 15% of our revenues affected by that Generic Cost of Capital decision, both – it’s the ROE, which would impact at the most because the reduction in the Capital Tracker was only 1% on the common equity. The other point I will make is that with each passing year, more of the revenue would be subject to the lower cost of capital or the lower weighted average cost of capital and then at the end of the term in 2017 everything will be trued up, and whatever the cost of capital is at that time would apply to everything going forward.
  • Paul Lechem:
    You said 10% to 15% of 2015’s revenue…
  • Karl Smith:
    Revenue; total revenue is affected by the lower Generic Cost of Capital in Alberta.
  • Paul Lechem:
    And how do you see that playing out for 2016 or percentage.
  • Karl Smith:
    Well, it would be larger percentage of 2016, but we’re not disclosing those numbers yet.
  • Paul Lechem:
    Okay. Alright. Thank you.
  • Barry Perry:
    Paul, Barry back again. John Walker is here with me, he runs our Western Operations. He actually corrected me on a point, I want to just tell you, that we are a part of the group of utilities in Alberta that are appealing aspects of the cost of capital decisions. I do want to clarify that, but obviously we’re also focused on getting ready for the upcoming new cost of capital hearing as well.
  • Paul Lechem:
    Okay. Thank you.
  • Operator:
    Your next question comes from the line of Linda Ezergailis from TD Securities. Please proceed with your question.
  • Linda Ezergailis:
    Thank you. With respect to Central Hudson, I was hopeful to get an update in your write up, I’m just wondering what sort of changes if any were in the final joint proposal versus the February joint settlement proposal? And what – when will we know exactly if you get on to the June regulatory schedule and what might be some risk of delays in getting that approved?
  • Barry Perry:
    Linda, there weren’t many changes, but I’m going to ask Jim Laurito, who is the President and CEO of Central Hudson who is on the call to give you a sort of good answer to that question. Jim are your there?
  • James Laurito:
    I am Barry. Thanks for the question, Linda. The changes were really just geography, all they really wanted us to do was to extract the third-party energy efficiency charges from our various gas and electric programs. They initially wanted us to put those in delivery rates, which was a change from past practice and then in between the hearings due to some impact from overlap from the proceeding their policy shifted on that and they asked us to extract those charges, so those are just third-party charges that will go back into the BC’s surcharge on the bill, so no learning’s impact. The joint proposal was – that was filed in February was reopened for that narrow purpose and that one change, so it will have the effect of appearing to lower delivery rates further. So the increase will be reduced from what it was originally proposed to be, but that reduction is just geography and does not impact the bottom line. So to the second part of your question, we should know approximately a week in advance of the June 17th session if we are on the agenda that would be the formal timeframe. We expect at this point to be on the agenda. Subsequent to the hearings, the settlement hearings that were held in March that Karl reference, the ALJ importantly eliminated the requirement for a recommended decision and briefs and required briefs, so there are no more procedural steps to go through prior to the June 17 session, which is most streamlined way to get there, so we feel good about it at this point.
  • Linda Ezergailis:
    Thank you, and just as a follow-up question; any dissenters of any materiality in this settlement?
  • Barry Perry:
    No. As the original joint proposal was signed on by ourselves and four other parties including two large environmental groups and the final joint proposal was executed by the five, the same five parties without any formal opposition at this point.
  • Linda Ezergailis:
    Great. Thank you very much.
  • Barry Perry:
    You’re welcome.
  • Operator:
    Your next question comes from the line of Ben Pham of BMO. Your line is open.
  • Ben Pham:
    Thank you and good morning everybody. Just a question on UNS Energy, I was wondering if you can comment on your current capital structure, relative to the regulatory metrics and where do you expect to be this year, and also just where you are on the general rate applications you’re planning to file that at some point in the future?
  • Barry Perry:
    Ben, you're referring to UNS Energy right?
  • Ben Pham:
    That’s right.
  • Barry Perry:
    Yeah. So generally Ben, when we got approval for the transaction in Arizona, a part of the commitment was to increase the equity thickness of Tucson Electric Power to 50% and we’re on that path at this point in time. So the regulator really supports thicker equity in that jurisdiction. David, can you recall, David Hutchens is with me here at this point, the present CEO of UNS, what the current equity thickness of GEP would be?
  • David Hutchens:
    Yeah, the current that was allowed by the commission is 43.5%, that was then raised to – bounced around a little bit obviously, as we made capital investments here, but we do have the plan as Barry said of increasing that before we get into the next rate case. So it’s difficult obviously getting up near that 50% level, which is basically the kind of an average equity layer for Arizona utilities.
  • Barry Perry:
    We also have 50% in play that’s a slightly more than that at the gas business and UNS Electric business, which are the smaller two utilities in Arizona.
  • Ben Pham:
    And maybe Barry or David, just if you can comment, UNS Energy, just add any sense of cost mitigation there has been some pressure on the cost side, and maybe you can update your decisions with the EPA in terms of, it sounds like that you’re proposing for a change like glide path on the CO2 rules?
  • Barry Perry:
    On the cost side, it’s kind of the blocking and tackling, we’re focused on reduction, we’re focused on efficiencies just kind of the standards stuff that we’re focused on, that’s energy to maintain those lower O&M cost. As far as the green power plant, we’re cautiously optimistic with the conversation we’ve had with the EPA are being take under advisement for their final rule, most of the changes that we we’re addressing, the tightening and the magnitude of how that power plant affects Arizona is related to taking into consideration the age of the plants and other plants, the coal plants in Arizona are actually quite new in terms of coal plant age as a reference. So that’s really what we’re focused on is having the EPA without a rule that says coal plants aren’t really subject for re-dispatch or displacement by gas until they reach their 40th year and just as a frame of reference in Arizona we have a couple that are from the timeframe of 1986, one in 1990, and two is new as 2006 and 2010 those are Springerville 3 and 4. So cautiously optimistic with listing when we get to the final rule.
  • Ben Pham:
    Do you have a sense when the rules will become – is it mid this year?
  • Barry Perry:
    It says late summer, I don’t know it has a definite timeline to it, but I'm guessing probably August, September timeframe.
  • Ben Pham:
    Okay. Very good, thanks for taking my questions.
  • Barry Perry:
    Thank you, Ben.
  • Operator:
    Your next question comes from the line of Andrew Kuske of Credit Suisse. Your line is open.
  • Andrew Kuske:
    Thank you, good morning. The question is for Barry, and it just relates to the developments in Ontario and what could be happening with Hydro One and the government stated intention. How do you think that unfolds for MAU opportunity in Ontario, and [indiscernible] for now from a Fortis perspective, but how do you look at the way the land in Ontario 12 months out?
  • Barry Perry:
    Let me clarify, anything in Ontario that’s available is not the back burner, we sort of see that as our sort of home ground and if there is opportunity to consolidate municipal utilities in the province we’re definitely looking at them Andrew. Clearly what’s going on with hydra one is not something that Fortis is going to participate in, it really doesn't lend itself to our model, the most if any shareholders going to be able to own is 10% of the shares that are sold and that’s not a position that we’re going to play in. What we’re hopeful obviously is that some of the discussion around removal of the transfer tax related to when we buy municipal utilities, that this penalty tax I’ll call it to sort of, the window that they’re looking at, at maybe three years of a holiday to encourage further consolidation to occur in the province and that will be very interesting to us, albeit apparently they’re really just saying it’s only for a really small utilities like less than 30,000 customers, which reduces the attractiveness of some of the targets, but we would definitely look at the opportunities in that area. So all in all, there is probably some positive momentum at this point in time in Ontario and gives us cause for some optimism that we might be able to grow our business there over the next few years.
  • Andrew Kuske:
    So probably more of a roll-up around the existing platform you have in Ontario, just given some of the restrictions on the MAU tax at this point in time, than anything that are growing bolder?
  • Barry Perry:
    Yeah, the bold stuff seems to be eliminated by the – taken by the products frankly, whether it would be an outright sale or Hydro One or Brampton Two, invested on utility, that’s now what’s occurred here, so they’ve sort of developed a in province solution I'll call it.
  • Andrew Kuske:
    Okay that’s very helpful. And then maybe a bit more of question – what you disclosed in the MD&A was this $1 million, which I know is a small amount of BD costs, regarding a potential generation to BC, would that be hydro-focused and what other additional color could you provide on that?
  • Barry Perry:
    That was in 2014 I think Andrew and it really relates to our exploring the possibility to expand power, put a new power plant on Similkameen River and just once we got through sort of prefeasibility stage and calculating the price for the dam, it just became unattractive and we parked it for now, it may reactivate itself in the future, but at this point we’re not spending any further funds on it.
  • Andrew Kuske:
    Okay. Very helpful. Thank you.
  • Barry Perry:
    Okay. Thank you Andrew.
  • Operator:
    Your next question comes from the line of Robert Kwan from RBC Capital Markets. Please proceed with your questions.
  • Robert Kwan:
    Good morning. Just on the larger LNG projects and specifically with fiber, I’m hearing some local stuff out here, kind of [indiscernible] corridor. Any comments just as to you know, what you're seeing, I know you've got the approval, but are you at the table with Woodfiber as part of public meetings and just what is the color that you’re getting back with respect to that?
  • Barry Perry:
    Robert I would say that we remain optimistic on that project, but John Walker is here in the room with me. So I’m going to – he is the closest to it and dealing with it on a day-to-day basis, so I’ll John comment on sort of our status there.
  • John Walker:
    Robert, just to be clear, we go two distinct projects, one is with Woodfiber of course, where we look to get the approvals to build the LNG facility and Fortis Energy, which is looking to build a pipe in compression to see that particular plan. So in answer to your question, yes we work, we try to coordinate to the degree possible to make sure messaging is similar and they’re being – we’re both in support of – on that end of it, but also being clear that we try to maintain the integrity of the two different projects to say move forward.
  • Robert Kwan:
    Okay. So to some extent it sounds like you’re coordinating, but for the most part they're kind of in charge of trying to push the community engagement on their project forward given you've got a somewhat smoother regulatory process?
  • John Walker:
    The two projects from a community point of view are inter-twined in terms of how we’re moving through, but the issues are somewhat different between the pipeline and as we try to progress through certain areas, certain parts of the geography that we have to deal with their; including some of the first nations issues that might be specific with respect to with Woodfibre actually they have in terms of moving their project ahead in terms of site and that sort of thing, a little bit more straight forward in that regard, but the two oriented twine in the public’s eye and that’s why we coordinate our messaging.
  • Robert Kwan:
    So kind of a smaller question around Central Hudson, you mentioned during the quarter the booking of Energy incentives, I’m just wondering if you can provide a magnitude of that, just maybe a little surprised that the year over year pick up given the weather last year and the fact that you’re just lagging on rates.
  • Barry Perry:
    Jim, did you get that question.
  • James Laurito:
    I do yes, the total Energy efficiency incentives come from prior programs Robert, and the total of those will amount to about $2.7 million, so we’ve booked the pro rata share in the quarter, and those will continue. The new programs going forward do not carry incentives, so this will be a 2015 item and then that will end.
  • Robert Kwan:
    So the $2.7 million, you mentioned pro rata, was that pro rata to the quarter, or was it pro rata to the company including prior periods.
  • James Laurito:
    Pro rata to the quarter for the year.
  • Robert Kwan:
    Okay. That’s great. Thank you very much.
  • James Laurito:
    Thank you, Robert.
  • Operator:
    As there are no further questions I would like to turn the call back over to Mr. Perry for any closing remarks.
  • Barry Perry:
    Thank you, operator. We have nothing to add at this time. Thank you for participating in Q1 2015 earnings call, and enjoy the rest of your day.
  • Operator:
    This concludes today’s conference call. You may now disconnect.