Best Practices for Revenue Forcasting for Electric Utilities

Identifying policies, Measuring Consumption and Driving Long-Term Impact

November 19-20, 2019 | Nashville, TN ::

1119-revenue-forecasting

Revenue management is an ongoing process requiring careful planning and oversight.  Variables including growth, weather, cost adjustment mechanisms, technological changes such as electric vehicles, roof top solar, and operational changes can have a major impact on the effectiveness of revenues.  Without the right tools and policies, many utilities struggle to keep the utility financially healthy for effective long-term operations and funding capital improvement programs.  In the rapidly changing energy market, industry leaders are quickly learning how important efficient and effective business practices are to their company’s financial health and long-term sustainability. 

The objective of this course is to: 

• Learn how to properly define a utilities revenue requirement (How much to recover in rates charged to customers) 
• Improve sales forecasting used for financial planning and budgeting 
• Understand the three key financial targets to monitor and financial policies to help ensure revenue stability 
• Understand financial metrics that provide insight into the utility’s future capital improvement needs and future costs 
• Rate design strategies and impacts on revenue stability and achieving long term objectives 
• Understand rate designs that send efficient pricing signals including time of use, demand charges, dynamic pricing structures and their relationship to revenue stability 
• Evaluate rate structures used to stabilize revenues during declining sales due to weather, roof top solar installations and changes in utility costs 
• Learn how to explain the overall impact and importance of financial planning and establishment of future rate tracks to management and ratepayers 

At the end of this course attendees will be able to: 

• Generate financial forecasts and metrics for budgeting and planning purposes
• Demonstrate sensitivity and impact on cash flow from scenarios by changing inputs such as power supply costs, capital costs, operations costs, energy sales and economic trends
• Calculate and evaluate financial policies such as:
  • Debt coverage ratio
  • Operating income
  • Minimum cash reserves
  • Age of the system
  • Capital reinvestment
  • Debt policies
• Generate financial forecasts and metrics for submission to rating agencies prior to bond issuance
• Understand rate strategies used by utilities around the nation and their effectiveness in stabilizing revenues
• Evaluate rate structures effectiveness at stabilizing revenues
• Understand the impact non-operating revenues and new customer extension policies have on a utilities financial structure
• Explain the importance of long-term financial planning to ratepayers and decision makers

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 1.3 CEUs for this event.

 

Requirements for Successful Completion of Program 

Participants must sign in/out each day and be in attendance for the entirety of the conference to be eligible for continuing education credit. 

Instructional Methods 

PowerPoint presentations and case studies will be used in program. 

Tuesday, November 19, 2019

8:00 – 8:30 a.m. :: Registration & Continental Breakfast 

8:30 – 9:15 a.m. :: Introduction/Defining Revenue Requirements  

• Debt coverage and fixed cost coverage targets 
• Cash to maintain in the utility’s reserves 
• Revenue requirements planning and break-even return on investments 

9:15 – 10:00 a.m. :: Generating Financial Forecasts & Metrics for Budgeting & Planning Purposes 

• Long and short-term projections 
• Evaluate historical trends for future guidance 
• Apply known changes to future projections 
• Checks, balances and reasonableness 

10:00 – 10:15 a.m. :: Morning Break 

10:15 a.m. – 12:00 p.m. :: Rate Challenges and Revenue Stability 

• Economic trends and Impacts of industry changes on revenue stability
• Load forecasting and revenue stability.
• How distributed energy resources (DER) and energy efficiencies effect sales
• Aligning utility costs with rates
• How to stabilizes sales and cash balances with DER and industry changes
• Power costs and power costs adjustments (PCA)

12:00 – 1:00 p.m. :: Group Luncheon 

1:00 – 3:00 p.m. :: Developing Long Term Revenue Requirements 

• Capital planning: when to borrow when to cash flow from operations
• Considerations in development of a long-term rate track
• How the key financial targets guide future rate changes
• Example of how the key targets work together
• Consequences of avoiding rate changes
• What legacy do you want to leave the decision maker?

3:00 – 3:15 p.m. :: Afternoon Break 

3:15 – 5:00 p.m. :: Developing Stable Rate Structures and Long-Term Rate Strategies 

• Identifying rate design objectives
• Industry trends to match electric rates with costs
• Achieving revenue stability with dynamic rate designs
• Variable and fixed charges and allocation for proper cost recovery
• Customer charges
• Demand charges
• Dynamic pricing methods
• Coincident and non-coincident demand
• Residential demand charges and industry trends
• Commercial and industrial rate design strategies

5:00 p.m. :: Adjourn for Day 

Wednesday, November 20, 2019

8:00 – 8:30 a.m. :: Continental Breakfast 

8:30 – 9:15 a.m. :: Evaluating the Impact other Non-Operating Revenues poses on Revenue Stability 

• How improper line extension policies can affect revenue stability
• Are you being fair to existing rate payers?
• Developing Line Extension Fees
• Identifying the value, a new customer provides to the utility
• Methods used by utilities in the development of extension policies

9:15 – 10:00 a.m. :: Impacts of Distributed Generation on Revenue Stability

• Considerations in the valuation of solar generation
• Billing methods used for roof top solar installations
• Development of standby rates for customers on-site generation

10:00 – 10:15 a.m. :: Morning Break

10:15 – 11:15 a.m. :: Nashville Electric Service Rate Strategy to Stabilize Revenues

• Current power supply situation
• Development of Grid Access Fees
• Matching rates with power supply costs
• Rate development process
• Customer impacts and acceptance

11:15 – 11:45 a.m. :: Discussion Round Table

• Issues participants are facing with revenue stability
• Flow of ideas and problem solving

11:45 a.m. :: End of Course

Dawn Lund, Vice President, Utility Financial Solutions, LLC 

Dawn Lund is Vice-President of Utility Financial Solutions, LLC and has over 20 years of experience in financial analysis for utility systems.  She is a consultant that provides financial assessment, cost of service studies and financial plans for Utilities throughout the country, Canada, Guam and the Caribbean.    She teaches financial planning courses for American Public Power Association (APPA) as well as other agencies across the nation.  She is a regularly requested speaker for associations across the country on a variety of utility financial topics. 

Mark Beauchamp, CPA, CMA, MBA 
President, Utility Financial Solutions, LLC 

Mark is President of Utility Financial Solutions, LLC and has over 30 years of experience in the industry.  He is a consultant that provides cost of service studies and special rate designs for utilities throughout the country, Canada, Guam and the Caribbean.    He has also served as an expert witness in rate cases.  He teaches the basic, intermediate and advanced cost of service courses for American Public Power Association (APPA) as well as other agencies across the nation.  Mark is recognized as a national expert in his field and often speaks at conferences and presents to industry organizations. 

Jay Neal, CPA, Billing & Collections Manager, Nashville Electric Service 

Jay is the Rates, Billing & Collections Manager at NES with responsibilities entailing rate design and billing, revenue forecasts, cost of service, monthly peak load reductions, and collections. Prior to his experience with NES, Jay managed internal and external audit functions and financial services with a public accounting firm.  Jay has a degree in public accounting and is a Certified Public Accountant

REGISTER NOW FOR THIS EVENT:

Best Practices for Revenue Forcasting for Electric Utilities

November 19-20, 2019 | Nashville, TN

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 October 18, 2019 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