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

Natural Gas & Electric Rate Design
November 29-30, 2018 | Mexico City, Mexico

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This two-day course is designed to explore the basic structure of cost of service applied to natural gas delivery and electric delivery or integrated utilities at the state jurisdictional level. The course begins by setting cost of service and pricing questions in the context of the overall regulatory structure. Through this approach students are exposed to the two major approaches to cost of service: embedded and marginal cost. Applications of these approaches are taken from state rate setting proceeding with the major areas of contention among parties to regulatory proceeding highlighted. In addition, to the extent that the approaches differ between natural gas and electricity those differences are described and the implications for cost of service identified. The course will also discuss the basics of rate design from a historical approach and trace the evolution of pricing in both industries as the concern over efficiency has grown and the potential for alternatives to grid-delivered energy evolve.

The course is designed in a lecture format with sufficient flexibility for student activities and group discussion.

The intent is that participants will be able to apply the information learned the first day they return to their jobs. Hands-on activities will be included throughout the day.

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



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 1.4 CEUs for this event.


Instructional Methods

Case studies, PowerPoint presentations and group discussion will be used in this event.

Requirements for Successful Completion of Program

Participants must sign in/out each day and be in attendance for the entirety of the course to be eligible for continuing education credit.


Thursday, November 29, 2018

registration8:00 – 8:30 a.m. :: Registration and Continental Breakfast

timing8:30 a.m. – 4:30 p.m. :: Course Timing

lunch12:00 – 1:00 p.m. :: Group Luncheon

Introduction and Regulation of Public Utilities

  • The origin and meaning of the public utility concept
  • The rationale for regulation
  • The regulatory compact: duties and obligation
  • The evolution of regulation and introduction of competitive markets
  • Evolution of Industry structure


  • The revenue requirement: assumptions and principles
  • Principles applied to pricing
  • Economics of natural monopoly
  • Foundations of public utility pricing
  • Pricing strategies and special topics (gas and electric storage, DR/DG, bypass rates)

Cost of Service Overview

  • Basic approach of cost of service
  • Marginal v. Embedded
  • Pricing traditional services
  • Unbundling

Embedded Cost of Service

  • Functionalization
  • Classification and allocation
  • Interclass revenue allocations
  • Differences between electric and gas

Exercise: Embedded cost and interclass revenue allocation

Marginal cost of service

  • Purpose of a marginal cost study
  • Planning and marginal cost
  • Customer, T&D and generation costs
  • Data used in MC studies
  • Reconciliation with revenue requirement and interclass revenue allocation

Friday, November 30, 2018

breakfast8:00 – 8:30 a.m. :: Continental Breakfast

timing8:30 a.m. – 4:00 p.m. :: Course Timing

lunch12:00 – 1:00 p.m. :: Group Luncheon

Traditional Rate Design

  • Flat rates
  • Two-part and Multi-part rates
  • Pricing Capacity and Access
  • Volumetric rates
  • Issues in using embedded costs for unbundling rates

Modern Rate Design

  • TOU rates
  • Peak load pricing (RTP, CPP, Demand Response)
  • AMI and smart metering
  • Demand management
  • Pricing for DER: Examples from the states

Special Topics in Rate Design

  • Tracking mechanisms
  • Volumetric risk
  • Net energy metering
  • Standby/buyback rates
  • Special contracts and economic development rates

Alternative Regulation

  • PBR and incentive regulation
  • Utility of the future and platforms
  • Revenue stabilization plans
  • Multi-year ratemaking

timingWrap-up and Discussion of Future Directions


Dr. Carl Peterson, Clinical Professor of Economics, University of Illinois Springfield and Executive Advisor to Concentric Energy Advisors

Carl Peterson, Ph.D,  is currently Clinical Professor of Economics at the University of Illinois Springfield. Dr. Peterson was a consultant with NERA Economic Consulting (2000- 17), a senior advisor for energy policy (1996-2000), a rates economist (1994-96) at the Illinois Commerce Commission, and a staff economist at the Center for Regulatory Studies at Illinois State University (1993-94). Dr. Peterson is currently an Executive Advisor to Concentric Energy Advisors. Dr. Peterson has advised governments and private entities in Europe and the US on issues related to the regulation of public utilities since 1998. Dr. Peterson has been a program faculty member at the Institute of Public Utilities at Michigan State University and has taught economics at Illinois Central College and Eureka College. His work has appeared in The Electricity Journal, Journal of Accounting and Finance, Natural Gas and Electricity, and several edited volumes.


Le Meridien Mexico City

Paseo de la Reforma 69, Tabacalera

Mexico City, CDMX, Mexico

Reserve your room:

please call +52 55 5061 3000

Room Block Reserved For:

Nights of November 27-30, 2018

Room rate through EUCI:

$159 single or double plus applicable taxes
Make your reservations prior to October 26, 2018.


Event Standard RateAttendees

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