The Basics Of Alternative Ratemaking Mechanisms For Public Utilities
January 14-15, 2021 | Online :: Central Time
Ratemaking is a major regulatory function that touches all aspects of utility operations. It also has wide-ranging ramifications for the different objectives that state utility regulators try to achieve.
Traditional ratemaking which is referred to as “Rate of Return (ROR) ratemaking”, or “Cost-of-Service Regulation” has been a mainstay of state public utility regulation since its inception.
However, over time, state utility commissions have modified ROR ratemaking to accommodate changes in the regulatory ratemaking landscape such as volatility in fuel prices, changing public policy mandates, incentives to deploy new technologies, changes in environmental conditions, competition, customer choice and numerous other factors which have called for the use alternative ratemaking mechanisms instead of traditional ROR ratemaking practices. Although ROR ratemaking is still prominent in the regulatory landscape, alternative ratemaking mechanisms now occupy a greater role in the current and ever-changing regulatory environment.
This training will systemically discuss the various alternatives to traditional ratemaking which regulators utilize to set rates for cost recovery while addressing an ever-changing regulatory environment.
Upon completion of this course, participants will be able to successfully:
- Define what is traditional rate of return ratemaking
- Discuss the positive and negative effects of rate of return ratemaking
- Explain why rate of return ratemaking is still appropriate in certain instances
- Define what is alternative ratemaking mechanisms
- Explain the reasons for interest in alternative ratemaking mechanisms
- Discuss the objectives of alternative ratemaking mechanisms
- Explain what are the most common forms of alternative ratemaking mechanisms
EUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET). In obtaining this accreditation, EUCI has demonstrated that it complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard.
EUCI is authorized by IACET to offer 1.0 CEUs for this event.
Upon successful completion of this event, program participants interested in receiving CPE credits will receive a certificate of completion.
Requirements for Successful Completion of Program
Participants must sign in/out each day, be in attendance for the entirety of the course
Power Point presentations and open discussion
This course is designed for anyone who wishes to obtain a basic understanding of Alternative Ratemaking mechanisms for electric and gas utilities. Commissioners, economists, rate analysts, accountants, attorneys, engineers, public information officers, administrative law judges, utility personnel, consultants, and consumer advocates will all benefit from the basic skills acquired in this course.
Thursday, January 14, 2021 : Central Time
8:45 – 9:00 a.m. :: Login and Welcome
9:00 a.m. – 4:00 p.m. :: Course Timing
12:00 – 12:30 p.m. :: Lunch Break
Module 1: Traditional Rate of Return Ratemaking
- Discuss the Positive Effects of Traditional Rate of Return Ratemaking
- Discuss the Negative Effects of Traditional Rate of Return Ratemaking
- Current Status of Traditional Rate of Return Ratemaking
Module 2: Alternative Ratemaking
- What is Alternative Ratemaking?
- Reasons for Interest in Alternative Ratemaking Mechanisms
Module 3: The Objectives of Alternative Ratemaking Mechanisms
- Reduce Utility Financial Risk
- Reduce Regulatory Lag
- Reduce the Frequency of Rate Cases
12:00 – 12:30 p.m. :: Lunch Break
Module 3 (Continued): The Objectives of Alternative Ratemaking Mechanisms
- Promote Renewable Energy
- Eliminate Utility Disincentive for Energy Efficiency by Reducing the Risk of Revenue Erosion
- Promote Specific Activities
Module 4: Specific Alternative Ratemaking Mechanisms
- Cost Trackers
- Infrastructure Surcharges
- Straight Fixed-Variable Rates (SFVR)
Day 1 Questions and Concluding Remarks
Friday, January 15, 2021 : Central Time
8:45 – 9:00 a.m. :: Login and Welcome
9:00 a.m. – 12:00 p.m. :: Course Timing
Module 4 (Continued): Specific Alternative Ratemaking Mechanisms
- Revenue Decoupling (RD)
- Lost Revenue Adjustment Mechanisms (LRAMS)
- Future Test Years (FTY)
- Formula Rate Plans (FRP)
- Multi-Year Rate Plans (MYRP)
- Performance Based Regulation (PBRs)
- Performance Incentive Mechanisms
- Price Cap Plans
Module 5: Hands on Problems
Questions and Concluding Remarks
Bill Steele, President, Bill Steele and Associates, LLC
Mr. Steele has over 40 years of experience in public utility regulation in which he has acquired an extensive knowledge of electric, gas and telecommunications industries. Mr. Steele’s has expertise in utility accounting, revenue requirements, cost allocation, class cost-of-service studies, rate design, cost-of-capital, alternative forms of regulation, mergers and acquisitions.
Prior to forming Bill Steele and Associates LLC in May of 2012, he spent 34 years with the Colorado Public Utilities Commission (CPUC) as an advisor to the Commissioners, Mr. Steele served as an advisor to the three Colorado Public Utilities Commissioners and the Commission’s six Administrative Law Judges. Mr. Steele demonstrated his broad expertise in the areas of electricity and natural gas utility regulation, which included the areas of revenue requirements, cost-of-service analysis, rate design and alternative forms of regulation. He also served in the role as the Commission’s subject matter expert in utility accounting and finance matters.
In addition, Mr. Steele’s advisory responsibilities included the training of new Commissioners as well as conducting in-house training courses on various utility issues, such as how to apply traditional regulatory principles to emerging issues in public utility regulation.
Mr. Steele has also been an instructor at “Basics of Regulation” training course offered by the Center for Public Utilities (CPU) at New Mexico State University for over 20 years. The main topics which Mr. Steele teaches included revenue requirements, a hands-on revenue requirement problem, class cost-of-services studies and other regulatory topics as required. Mr. Steele In his role as an instructor at the CPU has trained numerous state commissioners, members of state commissions staff, as well as, members from industry and consumer advocate organizations. Mr. Steele is also a member of the CPU’s Advisory Council.
Mr. Steele is a frequent presenter to the National Association of Regulatory Utility Commissioners staff Subcommittee on Accounting and Finance on various regulatory topics, including alternative forms of regulation. On January 5, 2018, Colorado Governor Hickenlooper by Executive Order (A 2008 002) appointed Mr. Steele to serve as a representative of small business on the Utility Consumers Board (UCB). Mr. Steele as a board member of UCB, provides to the Office of Consumer Counsel general policy guidance on matters that involve utility regulation and legislative matters.
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.
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 registrants for three business days after the event