Electric Utility Financial Basics: An Introductory Primer
February 21-22, 2018
Denver, CO

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Electric utilities are monopoly service providers and therefore subject to unique financial requirements and regulation.  Unlike competitive service providers, rates charged and cost recovery mechanisms are subject to unique principles and differing levels of regulatory oversight ranging from self-regulation in the case of electric cooperatives to local board or council regulation in the case of municipals, to state commission price regulation in the case of Investor Owned Utilities (IOUs). This introductory class provides a brief overview of the American power industry evolution and explains the principles of monopolistic price regulation (i.e., cost of service), the various types of electric utilities, and financial basics for each.  Explanations of the basic financial concepts for electric utilities will be provided with a focus on Investor Owned Utilities. 

Learning Outcomes

  • Discuss the regulatory evolution of the American power industry
  • Identify the need for price regulation of a monopolistic enterprise
  • Describe different regulatory regimes governing US electric utilities
  • Examine different types of electric industry participants (munis, coops, gencos, discos, transcos, IOUs, ISOs, RTOs)
  • Discuss the basic financial elements for an electric utility (IOU/Muni)
  • Explain the basic elements of financial reports for an electric utility (IOU/Muni)
  • Define basic cost of service approach (IOU/Muni)
  • Identify the concept of rate base, rate of return and return on equity
  • Identify financial planning tools for electric utilities



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.


Instructional Methods

This program will use PowerPoint Presentations, group discussions, as well as active participation.

Requirements for a Successful Completion of Program

Participants must sign in/out each day and be in attendance for the entirety of the course


Wednesday, February 21, 2018

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

8:30 a.m. – 5:00 p.m. :: Course Timing

12:00- 1:00 p.m. :: Group Luncheon

Introductions and Overview

Evolution of the American Electric Power Industry

  • Background & History
  • Timeline of Key Regulations
  • Current Industry Organization and Participants

Current Industry Organization and Particpants

  • Genco
  • Transco
  • Disco

Price Regulation of a Monopolistic Enterprise

  • Basic Concepts
  • Rules for Price Setting
  • Regulatory Regimes and Industry Participants

Introduction to Electric Utility Finance and Ratemaking

  • Types of Ownership
  • Regulatory Oversight by Sector and Type of Enterprise

Basic Financial Elements of the Electric Utility Business

  • FERC Uniform System of Accounts
  • FERC Form 1
  • Rate Base
    • Capital Assets
      • Allowance for Funds Used During Construction
      • Construction Work in Process
    • Regulatory Assets
    • Accumulated Depreciation
    • Working Capital
    • Deferred Taxes
  • Return on Rate Base
  • Revenue Requirement

Public Versus Private Utility Accounting Concepts

  • Depreciation
  • Debt Service
  • Franchise Fees/Taxes/Payments in Lieu of Taxes (PILOT)
  • Margins Versus Profit
  • Ratebase/Rate of Return
  • Enterprise Funds

Basic Electric Utility (IOU/Muni) Financials

  • Reports
    • Income Statement
    • Balance Sheet
    • Operating Budget
    • Capital Budget

How to Read Your Bill

Wrap Up and Adjourn

Thursday, February 22, 2018

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

8:30 a.m. – 12:00 p.m. :: Course Timing

Review of Day 1

How Electric Utility Financials Translate into Rates

  • Revenue Requirement
  • Capital Improvement Plan
  • Cost of Service
  • Rate Design

Financial Planning Tools

  • Financial Management Plan
  • Competitiveness with Surrounding Utilities
  • Examine Rate Design Impacts
  • Dynamic Dashboards

Wrap Up and Adjourn


Lisa M. Vedder, MPA, CIA, CCSA, Principal Consultant, Willdan Financial Services
Harvard University: Master in Public Administration
University of Wisconsin-Madison: B.S. Industrial Engineering

Ms. Vedder is a Principal Consultant at Willdan Financial Services. She has over 25 years of experience in the utility industry with special emphasis on electric and natural gas industry restructuring in the U.S. Her career spans the electric, natural gas, solid waste, wastewater, water and telecommunications utility sectors. Her responsibilities include utility cost of service and rate design studies, strategic business planning, and organizational assessments.  Her areas of expertise include finance, regulatory policy, cost allocation, complex quantitative modeling, power markets, power supply contracts, and auditing. She specializes in regulatory treatment methodologies for costs associated with both regulated and competitive activities, fuels portfolios, bond financing, transmission rates and services, and the electric and natural gas sectors at the wholesale and retail levels.  She has served as an Independent Auditor to an IOU for large-scale third party solar and wind procurements and as a subject matter expert to the Provincial Auditor of Saskatchewan in an audit of a competitive power solicitation.  She was technical lead to the Joint Outreach Team for the Department of Energy’s Defining the Future of the Grid Initiative in 2012.  She served as Lead Auditor for an ISO 14001 Environmental Management System Consolidated Audit of a $245M state-of-the art wastewater treatment plant.  Ms. Vedder has conducted privatization and securitization analyses, negotiated complex deals, and mediated disputes. She has led workshops; prepared written testimony, white papers, and briefs; and submitted to the Federal Energy Regulatory Commission (FERC), various state regulatory agencies, and an international tribunal. She is a trained facilitator and studied leadership and change management at Harvard where her Methodological Areas of Concentration included Negotiation & Conflict Resolution and Regulation & Industry Analysis.

Ms. Vedder, a member of Tau Beta Pi and Alpha Pi Mu, was the Women’s Leadership Initiative Fellow for her class at Harvard. She is a Certified Internal Auditor and holds a Certification in Control Self-Assessment.


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Denver CO, 80237


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