Fundamentals of Cost of Service and Rate Design for Water Utilities
November 8-9, 2017
Denver, CO

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Overview

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
  • 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

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 1.0 CEUs for this event.

 

Requirements for Successful Completion of Program

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

Instructional Methods

case studies, PowerPoint presentations, open discussion

Agenda

Wednesday, November 8, 2017

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


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

Thursday, November 9, 2017

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

8:30 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. / Manager – Fiscal Service / Fort Worth Water

Andy McCartney is a Manager for the Fort Worth Water Department and has 30 years of experience in utility finance and cost of service & rate design for Water, Wastewater, Stormwater, Solid Waste, and Electric Utilities.  He is a former Consulting Manager for Black & Veatch 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. 

Location

EUCI Conference Center
4601 DTC Blvd, Suite B-100
Denver, CO 80237

 

Nearby Hotels

Hyatt Regency Denver Tech Center
7800 E Tufts Ave
Denver, CO 80237
Phone: 303-779-1234
0.3 miles away

Denver Marriott Tech Center
4900 S Syracuse St
Denver, CO 80237
Phone: 303-779-1100
0.7 miles away

Hampton Inn & Suites
5001 S Ulster Street
Denver, CO 80237
Phone: 303-804-9900
0.5 miles away

Hilton Garden Inn Denver Tech Center
7675 E Union Ave
Denver, CO 80237
Phone: 303-770-4200
0.7 miles away

Register

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