Rate Design and the Potential Impacts of COVID-19

November 17-18, 2020 | Online ::

1120-rate-design

The coronavirus pandemic has presented utility regulators with a set of obstacles they have never confronted, challenging them to adapt regulatory tools to balance the interests of customers struggling through unemployment, and electric utilities juggling unanticipated costs and lost revenues. Over the past 10+ years, during other catastrophes like the financial crisis and major hurricanes, state regulators have considered and adopted alternative ratemaking approaches to balance the interests of utilities (the recovery of extraordinary costs) and customers (the ability to pay their bills). Although it is unclear when business will be back to “normal” after COVID-19, rate design reform discussions among all stakeholders must start “today” if utilities hope to meet the needs of their customers next year and beyond.

To manage the near-term implications of increased COVID-19 costs to protect employees and customers, deferred customer payments and disconnects for overdue accounts, and even potential revenue losses due to load losses across many customer classes, there are a variety of actions for utilities to consider including focusing on regulatory relations, customer relations, and the evaluation of potential cost recovery mechanisms. EUCI’s 18th Annual Rate Design conference brings together subject matter experts across the utility industry, including providers, regulators, consumer advocates, and other industry experts. The blend of relevant presentations and panel discussions will provide attendees with state-of-the-art perspectives and well thought out ideas to help utilities weather the pandemic.

Learning Outcomes

• Identify emerging rate design issues during a time of crisis from the perspective of industry regulators
• Discuss rate design options because of COVID-19 to enable utilities to meet the needs of their customers
• Discuss customer perspectives and their willingness to accept different rate design and pricing options
• Explore lessons learned about cost-recovery during a pandemic
• Identify options for cooperatives seeking financial relief
• Discuss the potential unintended consequences of certain rate designs
• Explore new bundled offerings for the customers of tomorrow

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 1.0 CEUs for this conference and 0.3 CEUs for the workshop.

 

Requirements for Successful Completion of Program

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

Instructional Methods

Case Studies, Panel Discussions and PowerPoint presentations

Tuesday, November 17, 2020 : Central Time

12:45 – 1:00 p.m. :: Log In and Welcome

1:00 – 1:15 p.m. :: Conference Overview and Introduction of Conference Chairs

1:10 – 1:20 p.m. :: Opening Remarks: Setting the Tone for the Conference

Conference Co-chairs:

Rick Starkweather, Partner, ScottMadden, Inc.

Dan Hansen, Vice President, Christensen Associates Energy Consulting, LLC

1:20 – 5:00 p.m. Session I: Regulatory Issues

(short breaks between speakers)

The COVID-19 pandemic has created an unprecedented level of uncertainty and regulatory action in North America. The cumulative effect of the pandemic is expected to create uncertainty not only for ongoing and near-term initiatives, but also impact longer-term regulatory strategies. Even in a non-pandemic world, the need for more predictable fixed cost recovery can lead utilities to file more frequent rate cases or to seek changes in the regulatory compact in their state. These are historic times and constant communication with regulators has never been more important. This session will include discussions on the following topics:

• Effectively communicating with all stakeholders
• Regulatory views on balancing utility and consumer needs
• Consumer advocate perspectives
• Panel discussion on evolving regulatory concerns

Speakers

Regulatory Views on Balancing Utility and Consumer Needs

Tricia Pridemore, Commissioner, Georgia Public Service Commission

 

Formula Rates in Alabama

Jeremy Oden, Commissioner, Alabama Public Service Commission

 

How Ontario is Managing the Impacts of COVID-19

Indy Butany-DeSouza, Vice President Regulatory Affairs, Alectra Utilities

 

Lessons Learned About Cost Recovery and Rate Design During the Covid Crisis

Jim Lazar, Senior Advisor, Regulatory Assistance Project (retired)

 

Effects of Covid-Induced Usage Changes on Rate Recovery and Tools to Address them

Todd Kimbrough, Partner, Holland & Knight

 

How Utilities & Regulators can Work Together on Economic Recovery: A Utility Perspective

Jennifer Peterson, Manager of Regulatory Strategy & Policy, Minnesota Power

4:15 – 5:00 p.m. Regulatory Issues Panel Discussion

5:00 p.m. :: Concludes for the day

Wednesday, November 18, 2020 : Central Time

8:45 – 9:00 a.m. :: Log In

9:00 a.m. – 12:30 p.m. :: Session II: Utility Coping Mechanisms

(short break between speakers)

Even in the middle of a pandemic, the electricity market continues to evolve at the same time because of DERs and smart-grid development. Thus, utilities need to continually be innovative by coming up with a variety of coping mechanisms that allow them to respond to the changing nature of the grid. It is paramount that utilities remain steadfast in their approach to create smart rate design mechanisms ensuring system cost recovery, serve customer interests, and harness new technologies to decrease costs. This session will include discussions on the following topics:

• How existing mechanisms (e.g., decoupling, formula rates, PBR) have performed in the pandemic – pros and cons.
• How industrial customers view these opportunities
• New roles for innovative rates and bundled offers
• A possible new role for economic development rates

Speakers

Regulatory and Policy Challenges and Considerations in the Wake of COVID-19

Lillian Federico, Research Director, Energy, S&P Global Market Intelligence

 

El Paso Electric During the Pandemic

James Schichtl, Vice President, Regulatory Affairs, El Paso Electric Company

 

The Impact of COVID-19 on Cooperatives and Their Options for Seeking Financial Relief

Allison Hamilton, Senior Principal, Markets and Rates, NRECA   

 

Regulatory Issues/Strategies in the COVID Environment

Erin Whitehead, Vice President, Regulatory and Major Accounts, NIPSCO

 

Maintaining Strong Relationships with Customers

Dave Kus, Assistant General Manager of Customer Service, Lakeland Electric

Rob Piatkowski, Key Account Manager, Apogee Interactive, Inc

11:45 a.m. – 12:30 p.m. :: Utility Coping Mechanisms Panel Discussion

12:30 – 1:15 p.m. :: Lunch Break

1:15 – 5:00 p.m. :: Session III: Pandemic-induced Usage Changes

(short breaks between speakers)

A pandemic-driven collapsing C&I electricity load is only partially offset by sheltering-at-home customers’ increased residential usage. Wall Street wants the companies to make good on their profit forecasts, but now is not the time to raise rates for customers. Utilities have implemented measures to help residential customers cope with rising power bills, but they need to think beyond today’s uncertainties and look toward tomorrow’s needs considering these shifting load dynamics. This session will include discussions on the following topics:

• Residential customer usage changes
• C&I usage changes
• Persistence/ permanence of rate changes
• Customer communications to help them through the pandemic

Speakers

Case Study: COVID-19 Customer Class Sales Analysis

Chris Haworth, Associate Vice President, Revenue Requirements, Xcel Energy

 

Load Forecasting and the Impacts of Covid 19

Cameron Saben, Forecast Engineer, MISO

 

A Case Study on the Effect of Shelter-in-Place Orders on Residential Customer Electricity Use

Dan Hansen, Vice President, Christensen Associates Energy Consulting

Andrew Au, Senior Business Architect, Pacific Gas & Electric (PG&E)

 

How Minnesota Power is Navigating the Impact of COVID on C&I Load

Leah Peterson, Supervisor, Key Account Analysis, Minnesota Power

 

The Impact of the Coronavirus on Electricity Demand

Ed Baker, Partner, ScottMadden, Inc.

4:00 – 4:45 p.m. :: Pandemic-induced Usage Changes Panel Discussion

4:45– 5:00 p.m. :: Conference Recap

The conference chairs will provide a recap of the key points that were covered during the conference. This closing session will also allow conference attendees to ask questions about any rate design presentation, issue, or problem.

Rick Starkweather, Partner, ScottMadden, Inc.

Dan Hansen, Vice President, Christensen Associates Energy Consulting, LLC

5:00 p.m. :: Conference Concludes

Performance Based Regulation/Ratemaking (PBR)

Tuesday, November 17, 2020 : Central Time

8:45 – 9:00 a.m. :: Workshop Log In and Welcome

9:00 a.m. – 12:00 p.m. :: Workshop Timing

Overview

The way we generate, distribute, consume, and pay for power today has been slowly evolving over the past decades. 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. As a result, some states are looking at alternative ratemaking approaches, including performance-based regulation (PBR), to incentivize utilities to respond to changing customer needs, encourage consideration of third-party options, reduce the frequency of rate cases, and decouple cost considerations from load changes.

This workshop on PBR will examine the principles of sound ratemaking, how regulatory objectives can impact the various alternatives, and elements of successful PBR mechanisms. The implications of PBR in the current pandemic environment will also be explored.

Learning Outcomes

• Explore the history of PBR and how it is different than traditional ratemaking
• Discuss the current environment of accommodating distributed energy, which is prompting the need for change
• Discuss why some regulators are looking at new PBR-like mechanisms because of these changing needs
• List the steps and options for implementing PBR
• Review several case studies
• Discuss how the pandemic affected utilities and how PBR can help address these issues

 

Agenda

• What is PBR and in What Ways is it Different from Traditional Ratemaking?
  • History of PBR
    • First implemented in 1990s, but was replaced with the advent of multiyear plans/decoupling
    • Lessons Learned: what worked and what did not
  • Types
    • Performance incentives
    • Indexed cap – e.g., price cap, revenue cap, revenue per customer cap
    • Benchmarking
    • “Menu of options”
  • Pros and cons of each

• Current Environment – What is Prompting the Need for Change?
  • Consumer preferences are changing
  • Regulators are implementing new incentive metrics that encourage sustainability and promote interconnection
  • Increasingly, utilities will need to further demonstrate that capital investments have had a positive impact on customers, beyond traditional reliability measures

• Steps and Options for Implementing PBR
  • Design considerations
    • Goals & objectives
    • Outputs and outcomes
    • Quantifiable and measurable metrics

• Case Studies
• PBR and the Pandemic
  • How has the pandemic affected utilities and how can PBR address those effects?

• Conclusions and Takeaways

 

Instructors

Rick Starkweather, Partner, ScottMadden, Inc.

Rick Starkweather has been a management consultant for almost 30 years and is a leader in ScottMadden’s regulatory practice. His areas of expertise include strategic and business planning, budgeting and forecasting, regulatory compliance and rate case support, and organizational and operations improvement. Prior to joining ScottMadden, he was a consultant with Deloitte Consulting. He also has experience in the healthcare and chemical industries and helped lead the start-up of two companies. Mr. Starkweather received a B.S. in mechanical engineering from Northwestern University and an M.B.A. from the University of Chicago Graduate School of Business. He is also a Certified Measurement and Verification Professional (CMVP) and Certified Energy Auditor (CEA) through the Association of Energy Engineers.

Mark Meitzen, PhD, Senior Consultant, Christensen Associates

Mark Meitzen is a Senior Consultant at Christensen Associates, where he has been employed since 1990. Dr. Meitzen is currently serving as principal investigator on NCFRP24, Preserving and Protecting Freight Infrastructure and Routes. He was a principal author of the November 2008 Christensen Associates’ study of the U.S. freight railroad industry commissioned by the Surface Transportation Board. He was also the project manager and one of the principal authors of Christensen Associates’ supplemental report to the STB on railroad capacity and investment issues. Dr. Meitzen has expertise in the economic analysis of network industries including telecommunications, railroad, electricity and postal. In addition to the recent STB study, his work in the railroad industry includes analysis of railroad mergers and application of the STB’s Constrained Market Pricing standards, including its Stand-Alone Cost methodology.

Dr. Meitzen also serves as an economic expert in regulatory proceedings on incentive regulation, pricing and economic costing matters. He also has experience in civil litigation matters as an expert witness on antitrust, intellectual property and employment issues. Prior to joining Christensen Associates, Dr. Meitzen was a corporate economist at Southwestern Bell Telephone Company and was an assistant professor of economics at Eastern Michigan University and the University of Wisconsin-Milwaukee.

Nick Crowley, Economist, Christensen Associates

Nicholas Crowley, MS (University of Wisconsin–Madison) is an Economist. Mr. Crowley’s professional work is primarily with natural gas pipeline and electricity regulation, including wholesale and retail markets. For electricity, he has participated in numerous costing and pricing projects, which involve computational analytics and econometrics, performance-based ratemaking, marginal cost estimation, total factor productivity estimates, and load response with respect to efficient time-of-use tariff options within retail markets. Mr. Crowley’s analyses and study results have been summarized in major reports and formal studies filed with regulatory authorities in Canada and the U.S. Prior to joining CA Energy Consulting, Mr. Crowley was an economist with the Federal Energy Regulatory Commission, where his work experience was concentrated in natural gas pipeline regulation and assessment of electricity markets. Mr. Crowley was also involved in FERC’s performance-based regulation of oil pipeline rates.

• Andrew Au, Senior Business Architect, Pacific Gas & Electric (PG&E)

• Ed Baker, Partner, ScottMadden, Inc.

• Indy Butany-DeSouza, Vice President Regulatory Affairs, Alectra Utilities

• Lillian Federico, Research Director, Energy, S&P Global Market Intelligence

• Allison Hamilton, Senior Principal, Markets and Rates, NRECA

• Dan Hansen, Vice President, Christensen Associates Energy Consulting, LLC

• Chris Haworth, Associate Vice President, Revenue Requirements, Xcel Energy

• Todd Kimbrough, Partner, Holland & Knight

• Dave Kus, Assistant General Manager of Customer Service, Lakeland Electric

• Jim Lazar, Senior Advisor, Regulatory Assistance Project (retired)

• Jeremy Oden, Commissioner, Alabama Public Service Commission

• Leah Peterson, Supervisor, Key Account Analysis, Minnesota Power

• Rob Piatkowski, Key Account Manager, Apogee Interactive, Inc

• Tricia Pridemore, Commissioner, Georgia Public Service Commission

• Cameron Saben, Forecast Engineer, MISO

• James Schichtl, Vice President, Regulatory Affairs, El Paso Electric Company

• Rick Starkweather, Partner, ScottMadden, Inc.

• Erin Whitehead, Vice President, Regulatory and Major Accounts, NIPSCO

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.

• 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.

REGISTER NOW FOR THIS EVENT:

Rate Design and the Potential Impacts of COVID-19

November 17-18, 2020 | Online

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RELATED WORKSHOPS:

Performance Based Regulation/Ratemaking (PBR)

November 17

Individual attendee(s) - $ 495.00 each
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