Utility Accounting 101

June 11-12, 2024 | Online :: Central Time

0624-utility-accounting-101

“This course helped facilitate a high-level understanding of the rate case process through simple examples and great instruction.” Senior Auditor, DTE Energy

“Good overview for someone new to the Electric utility industry.” Controller, Fishers Island Utility Company

“EUCI’s Utility Accounting 101 class provided a great introduction into this topic with knowledgeable and engaging presenters.” Manager, Project Controls, ITC Holdings

“They will make sure all of your questions get answered! Very practical training.” Accountant Senior, APS

Utility Accounting takes fundamental accounting concepts around financial reporting and adds a layer of complexity through regulatory and compliance requirements.  Public Utilities have rates set by State and Federal commissions to ensure that they recover prudently incurred costs and earn a reasonable rate of return that does not overly burden the ratepayer.

State and federal environmental regulations put the electric and gas industries in the unenviable position of encouraging their customers to reduce power usage creating loss of traditional revenues.  These regulatory and compliance nuances result in some interesting accounting treatment.

Our expert instructor will guide attendees through a wide range of accounting concepts best suited to the peculiarities of the utility industry, including:

• Generally Accepted Accounting Principles (GAAP) unique to regulated entities
• The capital-intensive nature of the industry, which may result in an unconventional balance sheet presentation
• State and federal environmental regulatory requirements
• The need to maintain multiple sets of books in order to stay compliant with GAAP, State and Federal Commissions and the SEC

Special discounts apply for groups of 5 or more so register today and take advantage of this highly valuable course.

Learning Outcomes  

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

• Identify utility specific accounts in a set of financial statements
• Assess the difference between a capital expenditure and an operating expense, in conjunction with the impact to the ratepayer
• Recognize utility specific disclosures in an annual 10-K filing with the SEC
• Define terms such as CWIP, CIAC, AFUDC, REC, DSM, REST, PPA and PPFAC
• Discuss accounting treatment for unbilled revenue, net-metering tariffs, and cost recovery mechanisms
• Explain the difference between shareholder and ratepayer expenses
• Explain the concept of designing rates to recover prudently incurred costs and a reasonable return
• Review a FERC rate order for accounting implications
• Identify key differences between accounting for regulated and non-regulated entities
• Define the reporting variations between FERC, GAAP and SEC
• Navigate FASB, FERC, FPSC (as an example of a State Commission) and SEC websites
• Discuss the changing outlook for the Utility industry and the possible accounting implications
• Navigate the requirements of ASC 980: Regulated Operations
• Examine financial reporting tools common to the Utility industry

Tuesday, June 11, 2024 : Central time

 

Course Introductions and Objectives

• Benchmark Course Participants’ Utility and Accounting Knowledge

Utility Accounting in a Nutshell

• Capital Intensive Industry
  • Property, Plant and Equipment (PP&E) largest asset balance
  • PP&E is the primary driver when determining rates
• Typical Revenue Streams – Vertically Integrated Utility
  • Define vertically integrated
  • Define “above the line”, “below the line”
  • Retail revenue
  • Wholesale revenue
  • Other operating revenue
  • Non-operating revenue
• Unbilled Revenue – Retail Rates
  • Estimating revenue for usage since last bill date
• Net Metering
• Public Power – Compare and Contrast Business Structures that Provide Public Power
  • Investor-Owned Utilities (IOU)
  • Cooperatives
  • Municipalities
  • Public Utility Districts (PUD)
  • Public Power District (PPD)
  • Independent Service Operators (ISO)
• Common Utility Terms
  • Construction Work in Progress (CWIP)
  • Contributions in Aid of Construction (CIAC)
  • Allowance for Funds Used During Construction (AFUDC)
  • Renewable Energy Credits (REC)
  • Demand Side Management (DSM)
  • Renewable Energy Standards Tariff (REST)
  • Purchased Power Agreement (PPA)
  • Purchased Power and Fuel Adjuster Clause (PPFAC)
• FERC vs. GAAP vs. SEC

Morning Break (15 minutes)

Regulatory Accounting, A Deeper Dive

• Federal Energy Regulatory Commission (FERC) System of Accounts and Financial Statement Introduction
• Review ASC 980 Provisions
  • Requirements that allow application of guidance
  • Regular evaluation of compliance
• Accounting for Regulatory Assets and Liabilities
  • Cost deferral unique to regulatory accounting
  • Deferral of gains and losses when retiring certain debt
• If recovery is Probable but not Currently Approved in Base Rates
  • “Return of” and “return on”

12:00 – 12:30 p.m. :: Lunch Break

Utility Financial Statements Fundamentals

• Identify Utility Specific Accounts and Disclosures
  • What accounts are listed first on the Balance Sheet?
  • Why are long-term assets listed before current assets?
  • Define and compare rate tariffs and contribution in aid of construction (CIAC)
  • What is “the line” on the Income Statement?
  • What is the primary information disclosed in the Regulatory footnote?
  • What utility specific accounting treatment is referenced in the Accounts Receivable footnote
  • Where are AROs disclosed?

Afternoon Break (15 minutes)

Environmental Compliance Changing the Industry

• Clean Energy Regulations
  • Critics of coal-fired generation
    • State requirements may differ from Federal regulation
    • Renewable energy mandates
    • Energy Efficiency programs – required to encourage less power usage through efficiency incentives, energy efficient appliances, SMART homes
• Customers Purchasing Solar Panels (Generating Portions of Their Own Power, Reducing Traditional Consumption Based Revenues)
• Impact and Considerations of the Infrastructure Investment and Jobs Act
• Accounting Consequences
  • Early retirement of plant assets
    • Change in rate structure to include more fixed charges
    • Recovery mechanisms to address lost revenues
    • Pursuing more non-traditional revenues, possibly requiring FERC approval, and creating accounting research

Wednesday, June 12, 2024 : Central Time

CASE STUDY – The Interaction Between Rates, Accounting, and the Finances

• Rate Design vs. Revenue Requirement
• Definition of Terms
• Correlate Accounting and Finance Information to Rate Design
• Tariffs, Riders, and Charges that Impact Customer Billing
• Rate Impact of Financing Infrastructure
• Approval of New Recovery mechanisms or Amendments to Existing Mechanisms
• Requirements to Defer Recognition/Recovery of Certain Costs
  • Significant one-time costs recovered over time (minimizes rate shock)
    • Amortize over Commission/governance approved recovery period
• Other Provisions
  • Merger considerations
    • Ratepayer protection
    • Merger costs, as one-time expenses, are typically not recoverable through based rates and not FERC recoverable – excluded when calculating transmission rates
    • Other provisions to limit ratepayer inequities 

Morning Break (15 minutes)

Navigating Industry Websites and Common Accounting Tools

• Polling Questions
  • Accounting system used
  • Familiarity with Industry websites
  • Company auditor
• Key Information on ACC, FASB, FERC and SEC Websites
• Auditor Accounting Resources – Deloitte Focus
  • GAAP guidance organized by the Accounting Standards Codification (ASC) topics
  • SEC reporting requirements
  • Roadmaps – interpretive guidance on specific topics

Wrapping Up: Questions and Concluding Remarks

Terilyn Wallis, MBA, EdD

Terilyn (Teri) Wallis is committed to the development and success of financial leaders in the utility industry. She holds a doctorate degree in adult education, working to design and deliver quality and relevant content that will build successful leaders and financial professionals for electric utilities. She holds an MBA in Finance and a BS in Accounting. She is an instructor and presenter for numerous statewide associations and industry events providing relevant teaching in the areas of accounting and finance, leadership, and work orders.

Teri is the founder and owner of Terilyn Wallis Consulting, specializing in the financial, work order processes, and strategic needs of electric utilities. Teri is highly skilled in the areas of accounting and finance, strategy development and execution, building trusted and respected relationships and making sound business decisions. Her background includes experience in diversified businesses including propane, natural gas, security, and fiber. 

Throughout her career, Teri has worked for 2 electric cooperatives, both having propane gas subsidiaries. She was responsible for all the forecasting and planning, accounting, and ratemaking for all of those businesses, in addition to the electric business. Additionally, as a regional employee for CFC, Teri has provided both consultative services, forecasting, and training and education for more than 350 electric cooperatives. Since 2018, she has provided consultative services and training and education for and an additional 150 electric cooperatives, which includes several Generation and Transmission Cooperatives, and approximately 15 PUDs and PPDs on their work order processes between the pacific northwest and Nebraska.

Additional utilities that Teri has worked with include:

• CPS Energy (San Antonio municipal – electric and natural gas)
• Tacoma Power
• Bonneville Power Administration
• Portland General Electric
• PacifiCorp
• NW Natural

Teri has a passion for the work order process. This passion led to her doctoral work being focused on creating a program to help others experience and be a part of an efficient and effective work order process that improves the process for those who take part in the workshop. Over time her expertise has been utilized to develop and deliver certificate level educational programming for board members, finance and accounting professionals and non-financial managers. In addition to work orders, she has a comprehensive working knowledge of internal control processes, ratio analysis and identifying potential operational efficiencies. 

In addition to financial expertise, facilitation of strategic direction and development and execution of organizational goals is a passion of hers. Through strategic planning facilitations, she has helped boards and management teams to identify and mitigate risks of their organizations. She assists management teams in the development of their strategic objectives to build measurable goals and to follow up on these plans to ensure that goals are road mapped and completed in an agreed upon time frame. 

In her personal life, Teri is a wife to Mike, a mom to Linnaea and Lance. She enjoys the outdoors, spending time with her family, raising and loving Labrador Retrievers, and scrapbooking the experiences of her family.

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:

Utility Accounting 101

June 11-12, 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 May 17, 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 log in each day and be in attendance for the entirety of the course to be eligible for continuing education credit. 

Instructional Methods

Power point presentations and open discussion and question and answer sessions

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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

 

Who Should Attend 

This course is primarily designed for accounting and finance personnel who may be new to the Utility Industry or transitioning into an accounting/finance role and wish to obtain a basic understanding of accounting for electric and gas utilities.