Introduction to Utility Depreciation

Introduction to Utility Depreciation

April 12-13, 2023 | Online :: Central Time

“The topic was well covered, and the speakers were able to respond to questions throughout the training.” Sr. Rural Development Specialist, Indiana Rural Community Assistance Program

“Very helpful to understand how a depreciation study and utility fixed asset accounting is different than “non-regulatory” fixed asset accounting.” CFO, Doyon Utilities, LLC

“A very practical class from industry practitioners.” Regulatory Analyst, Doyon Utilities, LLC

“This was a helpful session that covered the fundamentals of depreciation.” Accountant, Public Staff Water – Telephone Section, State of North Carolina Public Staff – Utilities Commission

“This was one of the best trainings that I’ve ever received. I appreciated the real life examples a lot.” – UNS

“Amazing speaker and answered all questions.” – California Public Utilities Commission

“James was knowledgeable and a very good speaker. He explained the information, answered questions, and provided examples when necessary. His expertise was very helpful in understanding the material.” – Alaska Department of Law

“This course was one of the bests courses that I ever took.” – UNS

“This course directly helped me in my role of reviewing the results of a depreciation study! Very relevant and informative at the right level of detail.” – PSE

This course provides a foundation of depreciation concepts, ratemaking implications, and making data collection choices–all factors that determine the quality and content of a depreciation study.  While this course does explore the basics of utility depreciation in a lecture format, the course is primarily intended to help participants become conversant on basic depreciation issues. These include:

  • Net salvage analysis
  • Ideal data collection
  • Accounting concepts and options
  • The significance of depreciation within the larger scope

In the interest of achieving a conversant level of understanding, attendee questions are encouraged, and interactive exercises are included.  This course is intended to be introductory and will provide a foundational framework and baseline to prepare attendees more advanced material.

Learning Outcomes

  • Explain and distinguish the common definitions of depreciation, the calculation of annual depreciation expense, and the concepts associated with basic plant accounting
  • Discuss the social and financial significance of accurately accruing depreciation and net salvage over the lifespan of the plant assets (i.e., the ratemaking perspective)
  • Identify and describe the components of a depreciation system with a focus on the most commonly used systems
  • Review the content of a depreciation study and the relevance of depreciation studies to attendees’ job duties
  • Discuss life analysis, survivor curves, and the concepts behind the methods used to forecast the remaining service life
  • Review net salvage analysis and discuss its increasing significance in the development of depreciation accrual rates
  • Identify the “ideal” data that should be tracked within continuing property records
  • Examine depreciation accounting concepts including capitalization policies, account groupings, individual vs. group (mass) asset accounting methodologies, and the value of tracking contributed plant
  • Explore accounting options to record fixed asset retirements and the impact of the choices upon depreciation calculations
  • Examine the connection between actual data available in plant records and the choice of life and net salvage analysis methods and the reliability of the resulting analysis



Wednesday, April 12, 2023 : 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


What is Depreciation?

  • Different Perspectives
  • Historical Development
  • Defining Terms
    • AICPA Bulletin # 1
    • 1996 NARUC “Public Utility Depreciation Practices”

Why is Depreciation Important?

  • Revenue Requirement
    • General accounting view
    • Plant accounting view
  • Social Considerations
  • Utility Considerations

Depreciation Systems

  • Purpose and Function of Depreciation Systems
  • Components of Depreciation Systems
  • Commonly Used Systems

Property Accounting

  • Unit Accounting
  • Group Accounting

Depreciation Study

  • Purpose of Study
  • Content of Study
    • Goals/objectives
    • Study procedures
    • Depreciation database
      • Building a database

    Forecasting Plant Retirement Traits

    • Relevance of Forecasting to Course Participants
    • Types of Forecasting Tools
    • Principles of Judgmental Forecasts

    Life Analysis

    • Defining Terms
    • Modeling Real Life with Analytical Tools

      Thursday, April 13, 2023 : Central Time

      8:45 – 9:00 a.m.
      Log In

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


      Net Salvage Analysis

      • Net Salvage Analysis
      • Gross Salvage
      • Cost of Removal
      • Inflation

      Ideal Continuing Property Records

      • Objectives
      • Setting up or Modifying CPRs
      • Regulatory Requirements
      • Ideal Continuing Property Record

      Capitalization Policy for Utility Depreciation

      • Selecting Retirement Units
      • Capitalization Policy
      • Capitalization Threshold
      • Capitalize or Expense?

      Selecting Account Groupings

      • Asset Distinctions that Matter
      • Pros & Cons of Subaccounts


      Dr. Lance Kaufman, Principal Economist, Aegis Insight

      Dr. Lance Kaufman has provided statistical and economic expert testimony in regulated utility proceedings and civil litigation. Dr. Kaufman’s experience covers most aspects of utility rate making, including depreciation analysis, revenue requirement, power cost forecasting, prudence analysis, cost of capital, integrated resource planning, decoupling, demand response, special contracts, PURPA filings, cost of service modeling, cost allocations, rate spread, and rate design.

      Dr. Kaufman is a Certified Depreciation Professional. He has developed software to conduct actuarial analysis of plant retirement data and to calculate depreciation rates. Dr. Kaufman has performed depreciation studies and participated in numerous depreciation and plant retirement proceedings. His broad utility experience and advanced statistical training contributes to a deep understanding of both the practical applications of depreciation theory and the strengths and weaknesses of modern depreciation analysis.

      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.


      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


      Introduction to Utility Depreciation

      April 12-13, 2023 | 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 10, 2023 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




      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 course and 0.3 CEUs for the workshop.

      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

      Instructional Methods

      Power Point presentations and open discussion will be used

      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:


      Who Should Attend

      • New plant accountants
      • Utility financial and ratemaking staff
      • Utility management wanting to get the “big picture” on depreciation
      • Regulatory Staff and Commissioners who review depreciation studies

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