Fundamentals of Cost of Service and Rate Design for Water Utilities

Fundamentals of Cost of Service and Rate Design for Water Utilities

April 28-29, 2022 | Online :: Central Time

“Very informative. Speaker kept the group interested the whole time. Great group discussion.” Hydrologist, Freese + Nichols 

“The tools offered/shared in this course will help shape our efforts with an upcoming rate study and better frame us in a position to get a comprehensive result to set a course for our small system for years to come.” Public Works Director, City of Fair Oaks Ranch 

“A very useful course. The speakers are very knowledgeable.” Public Advocate Utility Analyst I, State of Alaska

“Great course with incredibly knowledgeable presenters. I had my horizons extended and enjoyed the municipal and investor-owned utility perspectives.” Rate Analyst, EPCOR

Water utilities are facing constant pressure to replace aging infrastructure and meet increased regulatory demands, while meeting enhanced levels of service at a reasonable cost.  Cost of service and rate design studies are necessary to assist a water utility in setting rates that are fair and equitable to its customers.  These studies also support the water utility’s mission.

This introductory course reviews the basic mechanics of a cost of service and rate design study for water utilities. Participants will also learn valuable tools on obtaining buy-in or “selling” the need for a revenue increase to its constituent groups.  Real world examples based on generally accepted ratemaking principles will be utilized throughout the course.

Learning Outcomes

  • Identify how a cost of service & rate design study supports the utility’s mission 
  • Discuss the impact of policy and financial considerations on customer rates
  • Define the data requirements needed to begin a cost of service & rate design study
  • Identify revenue requirements and recognize the importance of a multi-year financial plan 
  • Explain the cost of service allocation process
  • Assess design rates that are defensible based on the cost of service and/or policy considerations
  • Discuss contractual pricing and other sources of revenue for the utility
  • Recognize the importance of customer outreach to sell your needed revenue increase

    Agenda

    Thursday, April 28, 2022 : Central Time

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

    12:00 – 12:30 p.m.
    Lunch Break

    9:00 a.m. – 4:00 p.m.
    Course Timing

    Introduction and Overview of Course

     

    How Financial Planning, Cost of Service (COS) Studies, and Rate Design Supports a Water Utility’s Mission

    • Examples of Utility Missions
    • Commonalities
    • What is Financial Planning?
    • What is Ratemaking (COS Studies & Rate Design)?
    • Constituents to the Process

    Policy/Financial Considerations

    • Debt Service Coverage
    • Operating Reserves
    • Infrastructure Planning & Investment

    Data Requirements

    • Types of Data Needed
    • Tips

    Developing Revenue Requirements/Financial Plan

    • Process
    • Fundamental Principles
      • Cash Basis vs. Utility Basis
    • Methodology
    • Multi-Year Financial Plan

    Cost of Service Allocation Process

    • Functionalization
    • Classification
      • Base-Extra Capacity Method
      • Commodity-Demand Method
    • Allocation (Distribution) to Customer Classes

    Rate Design

    • Options – Rate Structures
    • Conservation Pricing
    • Examples

     

    Friday, April 29, 2022 : Central Time

    8:45 – 9:00 a.m.
    Log In

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

    Review of Day One

    • Development of Revenue Requirements/Financial Plan
    • Cost of Service Process
    • Rate Design

    Contractual Pricing & Sources of Revenue

    • Wholesale/Contractual/Industrial Pricing
    • Non-Rate Fees and Charges

    Communications Outreach

    • Purpose/Goals
    • Toolbox
    • Case Study Example – Fort Worth Water

    Case Study – Small Water System Rates

    Instructors

    Andy McCartney, C.P.A., Principal Consultant / NewGen Strategies & Solutions

    Andy McCartney is a Principal Consultant for NewGen Strategies & Solutions and has over 30 years of experience in utility finance and cost of service & rate design for Water, Wastewater, Stormwater, Solid Waste, and Electric Utilities. He retired as the Capital Finance Manager for Fort Worth Water in 2022 and has served as a former Principal Consultant with a national consulting firm that provided multi-year financial planning, cost of service studies, rate design, impact fee studies, and strategic valuation services throughout the United States. He has also taught cost of service and rate design courses for the Government Finance Officers Association of Texas as well as the Texas Section of the AWWA.

    Mr. McCartney is a licensed Certified Public Accountant in the state of Texas. He holds a BBA degree in Finance from Texas A&M University, a BBA degree in Accounting as well as a BS degree in Economics from the University of Texas at Arlington. He also obtained his MBA in Finance & Accounting from Dallas Baptist University.


    Chris Ekrut, Director, Environmental Practice, NewGen Strategies and Solutions

    Chris Ekrut has been providing financial and management consulting services to the public and private utility industry since 2004.  He assists clients in pricing services and developing rates and fees for their water, wastewater, reuse, drainage, natural gas and electric utilities.  Chris works actively before rate regulatory agencies, assisting clients and customer groups with regulatory filings and proceedings and serves as an expert witness on cost of service and rate design matters.  He also specializes in assisting utilities in business and implementation planning, focusing on long-term strategy and policy.  Chris is a partner with and currently serves as the Director of the Dallas office of NewGen Strategies & Solutions. 

    Online Delivery

    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.

    • IMPORTANT NOTE: After November 30 you will not be able to join a Teams meeting using Internet Explorer 11. Microsoft recommends downloading and installing the Teams app if possible. You may also use the Edge browser or Chrome.
    • 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

    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

    REGISTER NOW FOR THIS EVENT:

    Fundamentals of Cost of Service and Rate Design for Water Utilities

    April 28-29, 2022 | Online
    Individual attendee(s) - $ 1195.00 each

    Volume pricing also available

    Individual attendee tickets can be mixed with ticket packs for complete flexibility

    Pack of 5 attendees - $ 4,780.00 (20% discount)
    Pack of 10 attendees - $ 8,365.00 (30% discount)
    Pack of 20 attendees - $ 14,340.00 (40% discount)

    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 March 25, 2022 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

    CEUs

    Credits

    AP_Logo

    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 event.

    Requirements for Successful Completion of Program

    Participants must Log in each day, be in attendance for the entirety of the course

    Instructional Methods

    Case studies, PowerPoint presentations, open discussion


    Upon successful completion of this event, program participants interested in receiving CPE credits will receive a certificate of completion.

    Course CPE Credits: 11.0
    There is no prerequisite for this Course.
    Program field of study: Specialized Knowledge
    Program Level: Basic
    Delivery Method: Group Internet Based
    Advanced Preparation: None

    CpeEUCI 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 

    • Accountants
    • Finance Directors
    • Engineers
    • Financial/Budget/Rate Analysts
    • Entry-Level Utility Consultants
    • Utility Management
    • Board/Council Members
    • City Management
    • Any stakeholder interested in the overall financial sustainability of the utility

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