Serving the energy industry for over 30 years
By - Jon Brown

Introduction to Utility Depreciation
August 18, 2020 | Online :: 9:00 a.m. – 4:00 p.m Central

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Overview

This course provides a foundation for understanding depreciation concepts, thinking through ratemaking implications, and making data collection choices that will impact the content and quality of the depreciation study.  This course is intended to be introductory and will provide a framework for the more advanced course, Depreciation Fundamentals.  The course is not simply a lecture but is intended to be interactive with the goal of addressing to the greatest extent possible, questions from the attendees.  The goal of the course is that participants will become conversant on basic depreciation issues.

Learning Outcomes

  • Explain the definition 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)
  • Introduce the “Depreciation Cube” (methods, procedures, and techniques) with a focus on the methods, techniques, and procedures most commonly used
  • Introduce life analysis, survivor curves, and the concepts behind the methods used to estimate the remaining service life
  • Introduce 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, the value of tracking contributed plant, and whether amortization is a better choice for some assets
  • 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

Credits

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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 0.7 CEUs for this course.

 

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

Agenda

Tuesday, August 18, 2020

All Times Central Daylight Time

8:30– 9:00 a.m. :: Sign in

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

12:00 – 12:30 p.m. :: Break for Lunch

  • What is Depreciation?
    1. Different Perspectives
    2. Historical Development
    3. Defining Terms
  • Why is Depreciation Important?
    1. Revenue Requirement
    2. Social Considerations
    3. Ratemaking Impacts
  • The Depreciation Cube
    1. Depreciation Methods
    2. Depreciation Procedures
    3. Depreciation Techniques
  • Property Accounting
    1. Unit Accounting
    2. Group Accounting
  • Life Analysis
    1. Defining Terms
    2. Modeling Real Life with Analytical Tools
    3. Simulated Plant Records
  • Net Salvage Analysis
    1. Net Salvage Analysis
    2. Gross Salvage
    3. Cost of Removal
    4. Inflation
  • Ideal Continuing Property Records
    1. Objectives
    2. Setting up or Modifying CPRs
    3. Regulatory Requirements
    4. Ideal Continuing Property Records
  • Capitalization Policy
    1. Selecting Retirement Units
    2. Capitalization Policy
    3. Capitalization Threshold
    4. Capitalize or Expense?
  • Selecting Account Groupings
    1. Asset Distinctions that Matter
    2. Pros & Cons of Subaccounts
  • Amortization Considerations
  • Fixed Asset Retirements
    1. Various Methods
    2. Comparison
  • The Depreciation Study

Instructor

James Keen, Utility Consultant, Aldrich CPAs + Advisors

Mr. Keen’s public utility experience totals over 18 years, focusing primary on regulatory matters, depreciation, and rate development.  Mr. Keen is a Certified Depreciation Professional experienced in preparing detailed depreciation studies for utility use and for review and approval by regulatory bodies.  His experience includes analyzing financial and technical information, developing spreadsheet models, preparation of revenue requirement studies and expert testimony, and performing market analysis and economic forecasting.  His expertise includes rate development, preparing utility contractual agreements, tariff modifications, depreciation studies and regulatory planning for electric, natural gas, solid waste, telephone and water and wastewater clients.

Prior to his role as a consultant, Mr. Keen worked for the Regulatory Commission of Alaska for over 15 years, serving as the chief of the engineering section for 10 years.  During his time there, he was involved with managing complex regulatory rulemaking proceedings, developing regulations implementing federal and state programs, and analyzing matters of first impression.  He was also the Commission’s primary depreciation analyst.  He has testified before Alaska Senate and House Committees and taught workshops to utility personnel on regulatory policy, basic ratemaking, and depreciation.

Before entering the utility arena, Mr. Keen was a design engineer at Rolls-Royce North America, specializing in aero gas turbine engines for commercial and military applications.  Mr. Keen has a Bachelor of Science in Mechanical Engineering from Purdue University.

Online Delivery

Our courses are designed to be the best possible use of your valuable time – get the information you need to improve your position in the market in an interactive, dynamic format.

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.

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

Event Standard RateAttendees
Introduction to Utility Depreciation - (single connection)US $ 645.00
Pack of 5 connectionsUS $ 2,900.00
Pack of 10 ConnectionsUS $ 4,835.00
Call us at 303.770.8800 if you have any specific questions on the volume discounts
* all other discounts do not apply to license packs

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Cancellation Policy

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 July 24, 2020 in order to be refunded and will be subject to a US $95.00 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

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