Moving to slide seven, you see the variances that drove the change in quarterly ongoing earnings per share. First, an increase in our gross margins added one penny per share compared against the prior year's first-quarter earnings. Several plusses and minuses comprises positive net variance and I will cover those items in more detail on the next slide.
Second lower operations and maintenance expense improved earnings by $0.07 per share. The expense decrease largely reflects lower fossil plant maintenance cost as a result of less work being completed early in the year compared to 2011 as well as the net decrease in other items.
This on end variance excludes expenses related to the Renewable Energy Standard or RAS, energy efficiency, similar regulatory programs as well as the 2011 first quarter settlement of transmission rights, away costs, all of which were essentially offset by comparable revenue amounts. Third, lower infrastructure related costs increased earnings by $0.03 per share reflecting both lower interest charges and lower depreciation and amortization associated with the 20-year license extension granted last year by the NRC for the Palo Verde Nuclear Generating Station.
Those cost reductions were partially offset by higher property tax related to tax rates. Fourth, the net impact of all other items decreased earnings by $0.03 per share. Finally our first-quarter 2012 earnings benefited $0.02 per share because of the Arizona (inaudible) plants that were placed in service last year and earlier this year.This net variance is reflected in various items on the income statement. Total gross margin was up one penny per share compared to the 2011 first quarter. The main components of that increase were as follows. The Retail Transmission Cost Adjustor rate increase that became effective July 1 st of 2011 improved earnings by $0.03 per share. Line extension fees recorded as revenue pursuant to 2009 retail regulatory settlement improved our results by $0.02 per share. Read the rest of this transcript for free on seekingalpha.com