This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.
“Since many of you have asked me what happens in a rising interest rate environment, I wanted to remind you that both our utilities have a trigger mechanism, which allows our CPUC-authorized ROEs to be reset if the annual average Moody’s A utility bond index rate move 100 basis points above or below the benchmark level, which is currently 4.24%.”
“If an upward trigger did occur, it would increase our equity return by 1/2 of the difference between the new monthly average rate and the benchmark rate. Additionally, the authorized cost of debt would be adjusted to reflect the actual cost of debt at that time.”