Performance-Based Regulation for Utilities and Stakeholders

May 18, 2023 | Online :: Central Time

0523-performance-based-regulation

“This course was relevant and thought provoking. Time very well spent!” – Manager, Rates and Finance, BC Hydro

“EUCI created a great and informative program which greatly improved my knowledge of PBR. I will be back.” – Associate General Counsel, Pepco Holdings Inc.

“Great speakers, thorough coverage of topics, knowledgeable presenters.” – Staff Rate Analyst, PSE&G

“Courses I’ve attended have been very well run with informative content and very knowledgeable presenters!” -Manager, Regulatory Administration, Otter Tail Power Company

From utilities, regulators, and consumers, all stakeholders in the electric and gas utility industry can benefit from efficiency gains obtained through innovative regulation. Today, customers are generating some of their own power, advanced metering structures allow for more sophisticated rate design, and large industrials—and even some residential customers—can actively adjust their demand in reaction to price signals and peak events. Utilities, for their part, continue to look for ways to recover enough revenue to provide a reasonable return for shareholders. Many utilities are looking at alternative ratemaking approaches, including performance-based regulation (PBR), to respond to changing customer needs, and decouple cost considerations from load changes.

Attend this course to examine the principles of both traditional and alternative regulation. Come prepared for a robust discussion on how regulatory objectives can impact the various alternatives.  The course will show the momentum of PBR across North America and where individual states are regarding implementing or pursuing PBR. A regulatory perspective and several utility case studies will be shared in this workshop.

Learning Outcomes

• Review how performance-based regulation (PBR) compares with other regulatory methods and identify why some regulators are looking at new PBR-like mechanisms
• Discuss the elements of successful PBR mechanisms
• Explore the principles of effective regulation
• Discuss how utilities can address and deal with the need for continuous rate cases
• Review alternative ratemaking mechanisms
• List the steps and options for implementation
• Review relevant case studies

Thursday, May 18, 2023 : Central Time

 

9:00 – 9:10 a.m. :: Opening Announcements 

9:10 – 9:30 a.m. :: Welcoming Comments 

9:30 – 10:30 a.m. :: What is PBR and in What Ways is it Different from Traditional Ratemaking

History

• Review the original concept
• Modifications over time
• Lessons learned – what has worked and what hasn’t
• States where the concept is being evaluated

Types, Reviewing Pros & Cons

• Performance incentive mechanisms (PIMs)
• Price cap
• Revenue cap
• Benchmarking
• “Menu of options”
• Decoupling

10:30 – 10:45 a.m. :: Morning Break 

10:45 – 11:45 a.m. :: PBR: The Alberta Experience

Priority outcomes and guiding principles which led to PBR adoption in the Canadian province.

11:45 a.m. – 12:15 p.m. :: Q&A and Discussion

12:15 – 1:00 p.m. :: Lunch Break 

1:00 – 1:45 p.m. :: Pairing Incentives with Cost-Based Ratemaking: A Review of Progress in Several Jurisdictions

Performance-Based Regulation means something different in each state. See the spectrum of PBR across numerous case studies.  

1:45 – 2:45 p.m. :: Hawaii Sees Early Success with PBR

A deep dive into Hawaii’s path to implementation and up to date developments from commission hearings on PBR

2:45 – 3:00 p.m. :: Q&A and Discussion

3:00 – 3:15 p.m. :: Afternoon Break 

3:15 – 4:15 p.m. :: How PBR Can Support the Energy Transition

Opportunities to leverage PBR to achieve a clean, reliable, and equitable economy, creating a win-win-win for utilities, customers, and the environment.

4:15 – 4:30 p.m. :: Q&A and Discussion

4:30 p.m. :: Day Adjourns 

Mark Meitzen, PhD Senior Consultant, Christensen Associates

Mark E. Meitzen, PhD (University of Wisconsin–Madison) is a Senior Consultant at Christensen Associates, where he has been employed since 1990. Dr. Meitzen has expertise in the economic analysis of network industries on a range of issues that includes cost and productivity analysis, and the design of incentive regulation plans. He has applied his expertise across a number of industries including electric utilities, telecommunications, postal services, and railroads. Currently, Dr. Meitzen (along with Mr. Crowley) is developing testimony on X factor and incentive regulation issues in two Canadian PBR proceedings. Recently, he has testified (along with Mr. Crowley) on behalf of Eversource Energy and National Grid (gas) in Massachusetts. In the last five years, he testified on behalf of National Grid and Eversource Energy in Massachusetts and his work was instrumental in getting the first PBR plan approved in North America with a negative X factor. This work, along with his experiences in PBR proceedings in Alberta, led to two recent publications regarding the current state of PBR in the electric utility industry in The Electricity Journal and an article on the effects of PBR in Utilities Policy coauthored with Mr. Crowley.^[1] Dr. Meitzen has consulted for both regulated companies and regulatory agencies. He has directed analyses and testified in jurisdictions in the U.S. and elsewhere on these issues, including the Federal Communications Commission, various state regulatory agencies, the Alberta (Canada) Utilities Commission, OSIPTEL (Peru), and the U.S. Surface Transportation Board. Prior to joining Christensen Associates, Dr. Meitzen was a corporate economist for Southwestern Bell Telephone Company (now part of AT&T).

^[1] Mark E. Meitzen, Philip E. Schoech, and Dennis L. Weisman, “The Alphabet of PBR in Electric Power: Why X Does Not Tell the Whole Story,” The Electricity Journal, 30 (2017) 30-37; Mark E. Meitzen, Philip E. Schoech, and Dennis L. Weisman, “Debunking the Mythology of PBR in Electric Power,” The Electricity Journal, 31 (April 2018) 39-46; Nicholas A. Crowley and Mark E. Meitzen, “Measuring the Price Impact of Price-Cap Regulation Among Canadian Electricity Distribution Utilities,” Utilities Policy, 72 (2021).

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Nick Crowley, Senior Economist, Christensen Associates

Nicholas A. Crowley is a Senior Economist with Christensen Associates Energy Consulting. He has calculated total factor productivity measures for the electricity and gas sectors and developed indexes for use in performance-based ratemaking. Recently, Mr. Crowley testified performance-based regulation issues on behalf of EPCOR Utilities in Alberta, as well as National Grid (gas) and Eversource (electric) in Massachusetts. Mr. Crowley also recently co-authored (with Dr. Meitzen) an analysis of the impact of performance-based regulation on Canadian utilities in Utilities Policy. Mr. Crowley has participated in the development of cost benchmarks for power systems and marginal cost estimation, and the development of avoided cost models. He assists electric utilities in measuring cost of capital and preparing COS studies for rate cases. He has also measured price responses by customers participating in leading demand response programs. Prior to joining CA Energy Consulting, Mr. Crowley served as an economist at the Federal Energy Regulatory Commission, where he assisted with energy industry benchmarking, the incentive regulation of oil pipelines using the Kahn methodology, and the review and evaluation of natural gas pipeline rate cases.

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Mark Kolesar, Managing Principal at Kolesar Buchanan & Associates Ltd.

With over 30 years of experience in the regulated utilities sector, Mark has worked in the areas of regulation and public policy, external relations, marketing, strategy and business development, and mergers and acquisitions. He has over 20 years of corporate experience in the telecom sector, where he was Vice President, Economic Affairs at TELUS. He was a member of the Alberta Utilities Commission for twelve years, including six years as Vice Chair and two years as Chair. When assisting utilities, he applies his strategy and regulatory experience to align their regulatory and corporate strategy goals. He also supports clients in crafting their overall submission, identifying the essential evidence required to support their submission and linking the evidence to key messages for the tribunal. Mark is available to appear as an expert witness. His principal areas of expertise are regulatory policy, the theory and implementation of performance-based regulation, rate design, facilities approvals, rate of return, and the impact of distributed energy resources on regulatory frameworks. He sits on the Advisory Board of the Center for Research in Regulated Industries at Rutgers University. Mark has an Honors Degree in Philosophy and an MBA in Managerial Economics and Finance.

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Dean Matsuura, Director-Regulatory Rate Proceedings, Hawaiian Electric Company, Inc.

Dean Matsuura, MBA (Michigan), MCRP (Harvard), AB (Stanford) is the Director-Regulatory Rate Proceedings at Hawaiian Electric.  He has been employed at Hawaiian Electric for 18 years and has managed rate cases, performance-based regulation, decoupling, cost recovery mechanisms and other regulatory matters.  He was previously employed at Hawaiian Telephone Company, Inc. for 22 years, serving as the Director-Regulatory Affairs among other positions and at the Hawaii State Department of Planning and Economic Development as a planner.

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Ross Hemphill, President, RCHemphill Solutions LLC

Ross C. Hemphill is an economist with over 35 years’ experience focusing on regulatory and energy policy issues with primary emphasis on ratemaking, rate design, innovative pricing and strategic analysis. His experience includes working for utilities, research institutions and regulatory agencies, both directly and as a consultant.  Ross was Vice President of Regulatory Policy & Strategy for Commonwealth Edison Company (ComEd) until January 2016.  He holds a doctorate in resource economics from The Ohio State University, a master’s degree in economics from Indiana State University, and a bachelor’s degree in economics from Lewis University.

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Cara Goldenberg, Principal, Rocky Mountain Institute

Cara Goldenberg is a Principal on RMI’s Carbon-Free Electricity Team where she conducts research and works directly with public utilities commissions, consumer advocates, and other stakeholders on regulatory reforms and changes to the utility business model needed to support the integration of clean and distributed energy resources and to advance customer equity. She is the co-author of various RMI reports focused on performance-based regulation, regulatory process design, and demand flexibility. Before joining RMI, Cara received a Master’s in Public Affairs at Princeton University. Prior to Princeton, Cara worked at Dian Grueneich Consulting where her work focused on analyzing state and regional clean energy policies and regulations.

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.

• IMPORTANT NOTE: After November 30 you will not be able to join a Teams meeting using Internet Explorer 11. Microsoft recommends downloading and installing the Teams app if possible. You may also use the Edge browser or Chrome.
• You will receive a meeting invitation will include a link to join the meeting.
• Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
  • You will need to join the appropriate meeting at the appropriate time.
• 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:

Performance-Based Regulation for Utilities and Stakeholders

May 18, 2023 | 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 April 14, 2023 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 0.6 CEUs for this event.

Requirements for Successful Completion of Program

Participants must log in each day and be in attendance for the entirety of the course to be eligible for continuing education credit.

Instructional Methods

Case Studies and PowerPoint presentations

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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: 7.5
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

 

Who Should Attend

This course was developed for:

• Utility executives
• Corporate communication professionals
• Contact center management professionals
• Commissioners
• Commission staff
• Attorneys
• Regulatory affairs managers
• Pricing and load research managers
• Customer representatives and organizations
• Cost of service analysts
• Financial analysts
• Rate design, product development and customer strategy professionals