Electric Cost-of-Service – Essential Concepts for a Changing Industry

Electric Cost-of-Service - Essential Concepts for a Changing Industry

July 18-19, 2022 | Online :: Central Time


“It was a very engaging and insightful class. Scott and David were also very knowledgeable with tons of experience to draw upon.” Utility Accountant, LADWP

“Excellent overview of the entire cost of service process for people new to topic or needing a refresher done by two excellent speakers.” Budget & Rates Analyst, Great River Energy

“Thanks for covering so much and allowing me to apply newly learned concepts into exercises that were extremely practical.” Budget Administrator, Anaheim Public Utilities

“They were very knowledgeable and gave lots of great info and examples. They made the data easy to understand. I’m very impressed.” – Utility Rate Analyst, City of Longmont

“Wonderful opportunity to learn the ins-and-outs of cost of service.” – Economist, Oregon PUC

“The worksheets in Excel are terrific!” – Financial Analyst-Competitive Transmission, MISO

“Great course for forecasting and load research professionals to see how projections and interval data by rate class impact COS results.” – Forecast Analyst Lead, Tampa Electric Co.

“Great course for someone with a year or so in the industry. Very informative, thank you!” – Sr. Accountant, Xcel Energy

“Extremely useful, Excel base examples.” – Rate Analyst I, MGE

“This course is worth the time for anyone new to cost of service modeling and analysis.” Administrator – COS, Tampa Electric Company

“The course content and speakers exceeded my expectations.” – Sr. Manager, Member Relations, Tri-State G&T

“Very dynamic and engaging speakers! I learned a lot that added relevance and helped put my daily work tasks in perspective.” – Sr. Regulatory Analyst, NiSource/NIPSCO

“Would highly recommend this course for anyone who is seeking to learn solid fundamental skills in cost-of-service study and rate design concepts.” – Staff Counsel, Kentucky PSC

“This class was very beneficial for me. It has given me more of a high-level view of the cost-of-service concepts and techniques.” – Regulatory Affairs Coordinator, Entergy

“A great overview for all levels of experience. Materials covered the basics and touched on more complex issues. The speakers had the knowledge and expertise to fully answer all the in-depth questions.” – Analyst, Brubaker & Associates Inc.

“Both speakers were excellent! Very knowledgeable and very good at explaining their topics. Really enjoyed the class.” – Utility Rate Analyst, Guernsey

“Great introduction to COSA – if you are looking for a place to start, this is the course.” – Power Supply Planning Specialist, FortisBC

“The best Cost of Service Principles course I have taken!” – Rates and Tariffs Analyst, Michigan Public Service Commission

This two-day course will lead participants through the cost-of-service process from start to finish in detail. We will discuss and compare differences among investor-owned utilities, municipal utilities, and electric cooperatives in cost-of-service principles and techniques. Both traditional and unbundled cost-of-service analytical techniques will be discussed. Each participant will complete a sample cost-of-service analysis during the course. Training materials will be provided.

Learning Outcomes

  • Discuss FERC Uniform System of Accounts
  • Identify revenue requirements
  • Examine utility case studies
  • Discover energy allocation factors
  • Define the steps in the ratemaking process
  • List cost classifications

Recommended Background And Requirements

No prior cost-of-service 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.



Monday, July 18, 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

Short breaks will be taken throughout the course

Course Overview and Introduction

  • Course objectives
  • Course overview
    • Steps in ratemaking process
    • Steps in cost-of-service process
    • Developing cost-of-service analysis – different perspectives
    • Interpreting cost-of-service results

Overview of Cost-of-Service Process

  • Process overview
  • Introduction
  • State regulatory process
  • Local regulatory process
  • Federal mandates
  • The cost-of-service team
  • Stakeholders

Study Preparation

  • Introduction
    • Four important considerations
    • Common supporting analyses to ensure success
  • Financial planning
  • Study period selection
  • Load research study
  • System loss study
  • Resource planning studies
  • Minimum system studies
  • Accounting for direct assignment
  • Lighting study
  • Load forecasting

 Morning Break

Policies, Objectives, and Strategies

  • Introduction
  • Policies
  • Objectives
  • Strategies
    • Marginal vs. embedded costs
    • Cost unbundling
    • Competitive pricing
    • Time-of-use pricing support
    • Real-time pricing support
    • Varying return on investment
    • Cost recovery through rules and regulations
    • Other strategies

 Lunch Break

Revenue Requirement

  • Introduction
    • Steps in rate design process
    • Definition
    • What is included in revenue requirements
  • Test year concept
    • Known and measurable adjustments
    • Used and useful adjustments
    • Components
  • Utility approach (IOU)
    • FERC Uniform System of Accounts
    • Rate base
      • Components
      • Definitions
    • Return on rate base
      • Weighted average cost of capital (WACC)
      • Cost of debt
      • Cost of equity
    • Utility Case Studies
  • Utility approach (regulated cooperative)
  • Cash approach (municipal)
  • Debt service coverage ratio
  • Comparison
  • Adjustments to base rates
  • Introduction to cost-of-service model
  • ATTACHMENTS: revenue requirements examples 5-1 through 5-4

 Afternoon Break

Revenue Requirement (cont.)

  • Classroom exercise No. 1: revenue requirement test year adjustment – adding a new load
  • Classroom exercise No. 2: revenue requirement test year adjustment – adding a new resource

Cost Allocation Methodologies

  • Introduction
    • Steps in ratemaking process
    • Sample cost allocation methods
  • Common approaches to cost allocation
    • Embedded
    • Marginal
  • Common approaches to cost allocation
    • Bundled
    • Unbundled

Tuesday, July 19, 2022 : Central Time

8:45 – 9:00 a.m.
Log In

12:00 – 12:30 p.m.
Lunch Break

9:00 a.m. – 4:00 p.m.
Course Timing

Short breaks will be taken throughout the course

Review of Day 1


Functionalization of Costs

  • Introduction
    • Steps in ratemaking process
      • Bundled approach
      • Unbundled approach
  • Business unit concept
    • Products and services
    • Allocations
      • Direct
      • Derived
  • Classroom exercise No. 3: functionally unbundling costs

 Morning Break

Classification of Costs

  • Introduction
    • Steps in ratemaking process
    • Basic cost categories
  • Fixed and variable costs
  • Cost classifications
    • Demand-related
    • Energy-related
    • Customer-related
    • Revenue-related
    • Direct assignments
  • Classification of functions
  • Special studies
    • Minimum systems
    • Zero intercept
  • Classroom exercise No. 4: classification of distribution plant

Rate Class Determination

  • Overview of issues
    • Rate classes
    • Number of classes
    • Type of classes
    • Classes within classes
    • Rate class trends: community solar
    • Cost-of-service support

 Lunch Break

Development of Allocation Factors

  • Introduction
    • Steps in ratemaking process
  • Demand allocation factors
    • Coincident peak
    • Non-coincident peak
    • Sum of max demands
    • Average and excess
    • Other
    • Utility Case Studies
  • Energy allocation factors
  • Customer allocation factors
  • Revenue allocation factors
  • Direct assignment
  • Classroom exercise No. 5: development of demand allocation factors

Allocation of Costs

  • Classroom exercise No. 6: allocated cost-of-service

 Afternoon Break

Interpreting Cost-of-Service Results

  • Introduction
  • Subsidization
    • Inter-class subsidization
    • Intra-class subsidization

 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.

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

Mr. Berg is a Principal with Dave Berg Consulting, LLC, and has more than 32 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.

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.


More than 5 attendees? Call our office at 303-770-8800 for additional discounts.

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


Electric Cost-of-Service - Essential Concepts for a Changing Industry

July 18-19, 2022 | Online
Individual attendee(s) - $ 1295.00 each

Volume pricing also available

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

Pack of 5 attendees - $ 5,180.00 (20% discount)

This event is related and may be of interest.

Electric Utility Pricing - Trends in Cost Recovery

July 20-21, 2022 | Online
Individual attendee(s) - $ 1295.00 each

Volume pricing also available

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

Pack of 5 attendees - $ 5,180.00 (20% 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 June 17, 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




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.

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

Course CPE Credits: 15.0
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



Requirements for Successful Completion of Program

You must be logged in for the entire presentation and send in the evaluation after the online course is completed.

Instructional Methods

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

Who Should Attend

This course is recommended for policymakers, managers, attorneys, regulators, key accounts representatives, accountants, engineers, and analysts who would like introductory, hands-on training related to cost-of-service concepts and techniques for electric utilities.

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