Electric Utility Pricing - Trends in Cost Recovery

July 24-25, 2024 | Denver, CO :: Mountain Time

0724-electric-utility-pricing

“Very helpful class to a new rate designer! Important to understand as our industry is facing very challenging times.” Rate Specialist, Alabama Power Company

“Excellent overview of how rates are designed and the many political and economic factors that go into them.” Budget & Rates Analyst, Great River Energy

“The course was very informative and very relevant to the rate design professionals.” Rate and Business Consultant, NRUCFC

“Awesome course for novices and experienced rate-designers. Speakers were knowledgeable and knew their material.” Senior Regulatory Accountant, National Rural Utilities Cooperative Finance Corporation

“The EUCI Rate Design workshop helped me understand the wide array of rate design options we can bring to our customers. I look forward to the next rate case and incorporating these new rate designs for our customers.” Regulatory Affairs Analyst, Indianapolis Power & Light

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“Great job!” Regulatory Analyst, WA UTC

“Make rate development positions easier by attending an EUCI course taught by experienced professionals that can be easily understood.” Administrator – COS, Tampa Electric Co.

“This course was well presented and worth my time.” Sr. Manager, Member Relations, Tri-state G&T

“The many years of experience of the instructors was readily evident through their excellent responses to student questions and their engaging discussion of the class topics.” – Manager of Engineering Services, GVEA

“I would highly recommend this course with these speakers for anyone wanting to have a fundamental understanding of rate design.” – Staff Counsel, Kentucky PSC

“Great introduction into the world of ratemaking!” – Operations Analysis Engineer, NIPSCO

“This program benefits a wide section of industry professionals and facilitates individuals with various backgrounds to work and learn together.” – Counsel, SC House

“I thought each speaker brought a new, different perspective and found each very engaging and informative.” – Attorney, Winstead PC

“Great class to learn the vernacular and basics of rate design. Perfect class for someone moving into this role at their company.” – Financial Analyst, Green Mountain Power

“Perfect introduction to rate design.” – Power Supply Planning Specialist, FortisBC

Building upon information discussed and developed in the Introduction to Cost-of-Service Concepts and Techniques for Electric Utilities course, this two-day course will introduce rate design concepts to participants. Our instructors will discuss:

• General ratemaking and regulatory principles
• Current trends in utility pricing
• Traditional rate design
• Unbundled rate design
• Marginal cost pricing
• Time based rates and demand management
• Special rate provisions

Each participant will work through sample rate design exercises during the course and training materials will be provided.

Learning Outcomes 

• Discuss pricing interface and implications of risk
• Examine how to develop cost curves
• Review classroom exercises on developing cost curves, solar installation, and designing bundled rates
• List ratemaking guidelines
• Identify special rate provisions

Recommended Background And Requirements

No prior rate design experience is required, although knowledge of utility system infrastructure, business environment, and operations will be helpful. To participate in model development, a laptop computer with Microsoft Excel 2003 or later is required.

 

Wednesday, July 24, 2024 : Mountain Time

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

Course Overview and Introduction

• Introduction
  • Building on cost-of-service
  • Overlap
  • Background and requirements
• Instructors
• The process

General Ratemaking and Regulatory Principles

• Introduction
• Bonbright principles
• Regulations
• Factors
• Objectives
• Ratemaking guidelines
  • Factors
  • Rate adjustments
  • Competing objectives
• Equity
• Rate levels
• Social engineering
• Competition
• Simplicity

Electric Utility Pricing: Trends That Matter

• Fundamental trends affecting electric utility pricing
  • Global changes
  • Utility environment
  • Advanced metering infrastructure
  • Customer environment
• Pricing interface
• Pricing implications of risk
• Transactional risk/decoupling
• Risk management strategies
• Pricing strategies

Morning Break

Electric Utility Pricing: Trends That Matter (Continued)

• Storage
• Solar rate considerations/value of solar
• Classroom exercise No. 1: special rate design – solar installation

Lunch Break

Applying Cost-of-Service Results

• Cost-of-service overview
• Developing cost curves
  • Bundled embedded cost
  • Unbundled embedded cost
  • Marginal cost
• Evaluation of competitive alternatives
• Classroom exercise No. 2: developing cost curves

Afternoon Break

Traditional Rate Design

• Rate overview
• Flat rate (energy only)
• Two-part rate (customer/energy or energy/demand)
• Three-part rate (energy/demand/customer)
• Blocked rates
  • Declining
  • Inverted/inclining
• Wright rate
• Relationship between rate design and cost curves
• Classroom exercise No. 3: designing bundled rates

Unbundled Rate Design

• Unbundled rate overview
• Traditional bundled vs. unbundled
• Unbundling strategies

Thursday, July 25, 2024 : Mountain Time

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

Marginal Cost Pricing

• Resources
• Application and use
• Short run and long run
• Marginal capacity costs
• Production cost modeling
• Marginal energy costs
• Marginal transmission costs
• Revenue reconciliation
• Dilemma of reconciliation

Time Based Rates and Demand Management

• Review of EPAct 2005
• Time‐of‐use overview
• Real time pricing
• Critical peak pricing
• Load reduction credits
• Other approaches
• Smart metering
• Time‐of‐use
  • Seasonal
  • Daily/hourly
  • Cost differentials
  • Variations
• ATTACHMENT: Examples of rate design 8‐1 through 8‐6
• Designing time‐of‐use rate
• Time periods
• Cost differentials
• Price elasticity
• Changes – Class load characteristics
• Changes – Revenue
• Changes – Time related costs
• Rate level adjustments
• Demand management

Morning Break

Special Rate Provisions

• Minimum bills
• Demand ratchets
• Power factor
• Service voltage
• Paying for growth
• Customer ownership of facilities
• Energy cost adjustment charges
• Net metering
• Standby rates
• Feed‐in tariffs
• Special contracts
• Others

Lunch Break

Classroom Exercise No. 4a – Residential Rate Design

Afternoon Break

Classroom Exercise No. 4b – Commercial Rate Design

 

Interclass Transitions and Communicating the Plan

• Introduction
• Rate Form Transition Problems
• Promotional and Special Rates
• Communicating the Plan
  • Confidence in Data
  • Summarize Process
  • Known and Measurable Changes to Test Year
  • Do Not Hide Facts
• Example Graphs
• Communications Summary

Course Wrap-Up

Scott H. Burnham, Executive Consultant, NewGen Strategies & Solutions LLC

Mr. Burnham has over 18 years of experience in consulting, management, cost-of-service, feasibility analyses and valuation services. His responsibilities include development of revenue requirements, costs-of-service allocation methodologies, rate design and revenue adequacy studies, utility valuation analyses and other engineering economic analysis. His project feasibility, financing and system acquisition projects have provided clients with a sound financial basis upon which to make decisions on purchasing, selling or modifying facilities. His rate related projects have included those that required the development and review of retail and wholesale electric rates, and rate structures, and analysis of rate riders for interruptible industrial rates, environmental cost adjustment rates, energy / fuel cost recovery and others. He has also assisted industrial customers in rates negotiation and evaluation.

Mr. Burnham has also been involved in feasibility and implementation studies, independent engineering reviews, operation and maintenance reviews, planning studies and valuation studies for generation assets. He has led multiple projects that have focused on determining the value of distributed solar resources to specific utilities. His clients have included municipal utilities, investor-owned utilities, electric cooperatives, and private sector clients.

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David A. Berg, P.E., Principal, Dave Berg Consulting, LLC

Mr. Berg is a Principal with Dave Berg Consulting, LLC, and has more than 39 years of experience. He specializes in consulting services requiring a combination of technical and financial expertise. His electric industry restructuring and pricing work has assisted utilities in stabilizing their customer base and revenues in an increasingly complicated environment as well as in educating them on the particular industry changes that could affect their operations most significantly. His project feasibility, financing and system acquisition projects have provided clients with a sound technical and financial basis upon which to make decisions on purchasing, selling or modifying facilities. He understands the special issues confronting small and medium size municipal utilities, as well as the joint action agencies serving these utilities. He has also assisted industrial customers in analyzing particular industry issues that impact their operations.

Mr. Berg has also been involved in financial and technical evaluation of power generation projects that utilize alternative fuels. These have included landfill gas, biomass and wind generation projects.

Mr. Berg is a popular speaker both at utility training sessions and state and national conferences, due to his ability to focus on the essential points of complicated issues and to recommend actions appropriate to the audience.

REGISTER NOW FOR THIS EVENT:

Electric Utility Pricing - Trends in Cost Recovery

July 24-25, 2024 | Denver, CO

Buy 4 in-person seats and only pay for 3! For this event every fourth in-person attendee is free!

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 June 21, 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 1.3 CEUs for this event.

Requirements for Successful Completion of Program

Participants must be present, either in-person or virtually, each day and be in attendance for the entirety of the course to be eligible for continuing education credit. 

Instructional Methods

PowerPoint presentations, classroom discussions, and question-and-answer sessions will be used in this conference.

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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: 15.5
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 recommended for policymakers, managers, attorneys, regulators, key account representatives, accountants, engineers, and analysts who would like introductory, hands-on training related to rate design concepts for electric utilities.