The Basics of Alternative Ratemaking Mechanisms for Utilities

April 29-30, 2024 | Online :: Central Time

0424-alternative-ratemaking

“One of the best courses I have attended presented by a man, Bill Steele, who is very knowledgeable and familiar with ratemaking applications and the alternative methodologies.” General Counsel, Bahamas Power & Light

“This is a very effective introduction to the topic.” Director Rates Modernization, NB Power

“I appreciated Bill’s expertise and depth of knowledge for the subject matter he presented. His real-life examples helped with a better understanding of these mechanisms in practice.” Research Data Specialist, CPUC

Ratemaking is a major regulatory function that touches all aspects of utility operations. It also has wide-ranging ramifications for the different objectives that state utility regulators try to achieve. Traditional ratemaking which is referred to as “Rate of Return (ROR) ratemaking”, or “Cost-of-Service Regulation” has been a mainstay of state public utility regulation since its inception. 

However, over time, state utility commissions have modified ROR ratemaking to accommodate changes in the regulatory ratemaking landscape such as volatility in fuel prices, changing public policy mandates, incentives to deploy new technologies, changes in environmental conditions, competition, customer choice and numerous other factors which have called for the use alternative ratemaking mechanisms instead of traditional ROR ratemaking practices. Although ROR ratemaking is still prominent in the regulatory landscape, alternative ratemaking mechanisms now occupy a greater role in the current and ever-changing regulatory environment. 

Attendees of this course will receive not only a thorough background in the genesis of Alternative Ratemaking and the problems it attempts to solve but will also be guided through specific mechanisms and finish with hands-on problems to practice what you have learned.

Learning Objectives

Upon completion of this course, participants will be able to successfully:

• Define what is traditional rate of return ratemaking
• Discuss the positive and negative effects of rate of return ratemaking
• Explain why rate of return ratemaking is still appropriate in certain instances
• Define what is alternative ratemaking mechanisms
• Explain the reasons for interest in alternative ratemaking mechanisms
• Discuss the objectives of alternative ratemaking mechanisms
• Explain what the most common forms of alternative ratemaking mechanisms are

 

Monday, April 29, 2024 : Central Time

Short breaks will be taken throughout the course (30 minutes total)

Traditional Rate of Return Ratemaking

• Discuss the Positive Effects of Traditional Rate of Return Ratemaking
• Discuss the Negative Effects of Traditional Rate of Return Ratemaking
• Current Status of Traditional Rate of Return Ratemaking

Alternative Ratemaking

• What is Alternative Ratemaking?
• Reasons for Interest in Alternative Ratemaking Mechanisms

The Objectives of Alternative Ratemaking Mechanisms, Part 1

• Reduce Utility Financial Risk
• Reduce Regulatory Lag
• Reduce the Frequency of Rate Cases

12:00 – 12:30 p.m. :: Lunch Break

The Objectives of Alternative Ratemaking Mechanisms, Part 2

• Promote Renewable Energy
• Eliminate Utility Disincentive for Energy Efficiency by Reducing the Risk of Revenue Erosion
• Promote Specific Activities

Specific Alternative Ratemaking Mechanisms, Part 1

• Cost Trackers
• Infrastructure Surcharges
• Straight Fixed-Variable Rates (SFVR)

 

Tuesday, April 30, 2024 : Central Time

Specific Alternative Ratemaking Mechanisms, Part 2

• Revenue Decoupling (RD)
• Lost Revenue Adjustment Mechanisms (LRAMS)
• Future Test Years (FTY)
• Formula Rate Plans (FRP)
• Multi-Year Rate Plans (MYRP)
• Performance Based Regulation (PBRs)
• Performance Incentive Mechanisms
• Price Cap Plans

Case Study:: Exploring Performance Incentive Mechanisms with Exelon

In this session, Exelon will discuss various performance incentive mechanism (PIM) case studies, drawing from Exelon’s territories and external jurisdictions, to share experiences, explore proposed structures, and discuss best practices and learnings.

Anna Semler, Senior Policy Analyst – Corporate Strategy Policy Analysis & Development Team, Exelon

Hands on Problems

Questions and Concluding Remarks

Bill Steele, President, Bill Steele and Associates, LLC

Mr. Steele has over 40 years of experience in public utility regulation in which he has acquired an extensive knowledge of electric, gas and telecommunications industries. Mr. Steele has expertise in utility accounting, revenue requirements, cost allocation, class cost-of-service studies, rate design, cost-of-capital, alternative forms of regulation, mergers and acquisitions.

Prior to forming Bill Steele and Associates LLC in May of 2012, he spent 34 years with the Colorado Public Utilities Commission (CPUC) as an advisor to the Commissioners, Mr. Steele served as an advisor to the three Colorado Public Utilities Commissioners and the Commission’s six Administrative Law Judges. Mr. Steele demonstrated his broad expertise in the areas of electricity and natural gas utility regulation, which included the areas of revenue requirements, cost-of-service analysis, rate design and alternative forms of regulation. He also served in the role as the Commission’s subject matter expert in utility accounting and finance matters.

In addition, Mr. Steele’s advisory responsibilities included the training of new Commissioners as well as conducting in-house training courses on various utility issues, such as how to apply traditional regulatory principles to emerging issues in public utility regulation.

Mr. Steele has also been an instructor at “Basics of Regulation” training course offered by the Center for Public Utilities (CPU) at New Mexico State University for over 20 years. The main topics which Mr. Steele teaches included revenue requirements, a hands-on revenue requirement problem, class cost-of-services studies and other regulatory topics as required. Mr. Steele In his role as an instructor at the CPU has trained numerous state commissioners, members of state commissions staff, as well as, members from industry and consumer advocate organizations.  Mr. Steele is also a member of the CPU’s Advisory Council.

Mr. Steele is a frequent presenter to the National Association of Regulatory Utility Commissioners staff Subcommittee on Accounting and Finance on various regulatory topics, including alternative forms of regulation. On January 5, 2018, Colorado Governor Hickenlooper by Executive Order (A 2008 002) appointed Mr. Steele to serve as a representative of small business on the Utility Consumers Board (UCB). Mr. Steele, as a board member of UCB, provides the Office of Consumer Counsel general policy guidance on matters that involve utility regulation and legislative matters.

We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.

• Microsoft recommends downloading and installing the Teams app if possible. You may also use the Edge browser or Chrome.
• You will receive a separate email with a unique link to a personalized landing page which will include links to join all sessions of this event.
• If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
• The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.

Please Note: This event is being conducted entirely online. All attendees will connect and attend from their computer, one connection per purchase. For details please see our FAQ

If you are unable to attend at the scheduled date and time, we make recordings available to all attendees for 7 days after the event

REGISTER NOW FOR THIS EVENT:

The Basics of Alternative Ratemaking Mechanisms for Utilities

April 29-30, 2024 | Online

Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before March 29, 2024 in order to be refunded and will be subject to a US $195.00 processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of conference cancellation, EUCIs liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800

Credits

EUCI is accredited by the International Accreditors for Continuing Education and Training (IACET) and offers IACET CEUs for its learning events that comply with the ANSI/IACET Continuing Education and Training Standard. IACET is recognized internationally as a standard development organization and accrediting body that promotes quality of continuing education and training.

EUCI is authorized by IACET to offer 0.9 CEUs for this event.

Requirements for Successful Completion of Program

Participants must sign in/out each day, be in attendance for the entirety of the course

Instructional Methods

Power Point presentations and open discussion

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Upon successful completion of this event, program participants interested in receiving CPE credits will receive a certificate of completion.

Course CPE Credits: 10.5
There is no prerequisite for this Course.
Program field of study: Specialized Knowledge
Program Level: Basic
Delivery Method: Group Internet Based
Advanced Preparation: None

EUCI is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org

 

 

Target Audience

This course is designed for anyone who wishes to obtain a basic understanding of Alternative Ratemaking mechanisms for electric and gas utilities. Commissioners, economists, rate analysts, accountants, attorneys, engineers, public information officers, administrative law judges, utility personnel, consultants, and consumer advocates will all benefit from the basic skills acquired in this course.