PES Pipeline Increase
Paul Patterson – Glenrock Associates: First on the PES pipeline increase. Are you guys feeling different about the outlook? And what do you think about the outlook longer-term for the business?
John U. Huffman – President and CEO, Pepco Energy Services: Yeah, this is John Huffman. I’d say in the near term, the federal market is definitely picking up. We’re seeing an increased activity. The challenge is to convert those opportunities into signed contracts. The local and state markets continue to remain soft. There is some activity, but we think that’s going to take longer to pick up but I think over the longer-term, we’re expecting to see modest growth in the energy efficiency business.
Paul Patterson – Glenrock Associates: In terms of the impact of sequester, if it wasn’t for sequester, what do you think your normalized sales growth would have been?
Frederick J. Boyle – SVP and CFO: This is Fred. As far as the exact impact of sequestration, it’s difficult to identify specifically what it is. We had projected to have some increase, a minor increase in sales but we haven’t seen that and we’ve seen a little bit of a tailing off. In the Pepco region where you’d expect more impact from the sequestration, the commercial sector is down the most. So we’re seeing an impact there. But as far as how much you could exactly attribute to sequestration, I couldn’t say.
Paul Patterson – Glenrock Associates: But it would probably be negative anyway, your sales growth, is that fair to say?
Frederick J. Boyle – SVP and CFO: Not in the Pepco region. We weren’t anticipating negative sales growth.
Paul Patterson – Glenrock Associates: But you think the sequestration is a reason for that?
Frederick J. Boyle – SVP and CFO: I think that is a driver, as we had projected to be flat to a little bit up and we are down. We’re now projecting to be down in Pepco about 1% for the year.
Paul Patterson – Glenrock Associates: You think the primary driver in that is sequestering as opposed to anything else?
Frederick J. Boyle – SVP and CFO: Yes.
Paul Patterson – Glenrock Associates: Then, in terms of the SOS margin, I guess, quarter-over-quarter, how should we think about what the longer term impact on that is?
Frederick J. Boyle – SVP and CFO: Well, quarter-over-quarter, there is an adjustment we had in 2012 relating to SOS. And if we look back at even the waterfall chart that we had at the Analyst Day, we had shown an unfavorable – I think it was $0.02 to $0.03 because of the SOS and the favorable adjustment made in 2012. That was out of period. So that’s what we’re seeing come through here.
Paul Patterson – Glenrock Associates: So there shouldn’t be – (pass at), there shouldn’t be any change, right?
Frederick J. Boyle – SVP and CFO: Correct.
Paul Patterson – Glenrock Associates: Then just in terms of the regulatory challenges that you guys have mentioned, we now have, I guess, New Jersey, Maryland out of the way. And I don’t think you guys are all that happy with the Maryland outcome, right? So, I was wondering, I mean, how should we think about – I mean, you’re not going to cut back on reliability and what have you. Do you think that that means that perhaps we should just get ready for more regulatory lag, or how should we think about how the Company is going to be addressing regulatory lag? I mean, what are your thoughts about those? Do you follow me – in terms of regulatory strategy, given the outcomes that you guys have had last couple rate cycles here?
Joseph M. Rigby – Chairman, President and CEO: Yeah, Paul, this is Joe. You’re right, we’re disappointed. We’ve expressed that disappointment back up even to the Governor’s office. I think that it’s fair to say that obviously we expressed that disappointment in our appeal. We understand that it’s going to take us longer now to chunk into this than any of us would like to. I think what we’re trying to manage through is, while we’re assessing our spend particularly for Pepco in Maryland, it would, I think, kind of exacerbate a problem that we’re just kind of recently worked our way out of if we changed our behavior dramatically, so we’re not going to do that. I think that we’re taking a look at everything in terms of how we approach the cases, how we present the materials; we’re not going to assume that we’re doing everything perfectly ourselves. What we do feel strongly that we now have operating performance on our side, and as we go in, I’m hopeful that the next time when we make the Pepco Maryland filing that we are going to get a better outcome because there will candidly be more distance between, I think, what has been a tough period in our to that point in time. The one thing I just kind of maybe go on a little bit that surprised me was the reaction that the Commission had to the recommendations that we proposed vis-a-vis the Governor’s task force. I can’t really explain why they didn’t embrace more of that because obviously that was to the benefit of the customer with not really significant cost impacts, but we feel very strongly that we’ve made such significant improvements that even though it’s going to take us a little bit longer that we will eventually be able to chunk the lag down.
Paul Patterson – Glenrock Associates: Do you think that – I mean, you guys have filed several rate cases in a short period – pretty consecutively; how should we think about the next rate cycle in Maryland?
Frederick J. Boyle – SVP and CFO: The next rate cycle as it relates to Pepco Maryland, we’d anticipate being back in again later this year.
Matthew Davis – Credit Suisse: It’s actually Matt Davis. Just one quick question on the appeal process, can you walk through what could come out of that and what the process is going forward for – in Pepco Maryland, excuse me?
Frederick J. Boyle – SVP and CFO: While we’ve filed the appeal, as far as the timing on that, there’s not a set schedule and from my understanding, that could take approximately 12 months to work itself through.
A Closer Look: Pepco Holdings Earnings Cheat Sheet>>