Natural Gas Cost of Service & Rate Design
December 9-10, 2019 | Houston, TX
This two-day course is designed to explore the basic structure of cost of service applied to natural gas delivery 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 attendees 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. The course will also discuss the basics of rate design from a historical approach and trace the evolution of pricing 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 enough 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.
- 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.
Upon successful completion of this event, program participants interested in receiving CPE credits will receive a certificate of completion.
Course CPE Credits: 15.5
There is no prerequisite for this Course.
Program Level: Beginner/Intermediate
Delivery Methood: Group-Live
Advanced Preperation: None
EUCI 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.
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.
Monday, December 9, 2019
8:00 – 8:30 a.m. :: Registration & Continental Breakfast
8:30 a.m. – 4:30 p.m. :: Course Timing
12:00 – 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
Cost of Service Overview
- Basic approach of cost of service
- Marginal v. Embedded
- Pricing traditional services
Embedded Cost of Service
- Classification and allocation
- Interclass revenue allocations
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
Tuesday, December 10, 2019
8:00 – 8:30 a.m. :: Continental Breakfast
8:30 a.m. – 4:00 p.m. :: Course Timing
12:00 – 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
- Straight-fixed variable pricing
- Modern demand-based pricing
- AMI and smart metering
- Special pricing topics: demand management, TOU rates, load retention, NGV pricing
Special Topics in Rate Design
- Tracking mechanisms
- Volumetric risk
- Net energy metering
- Standby/buyback rates
- Special contracts and economic development rates
- PBR and incentive regulation
- Utility of the future and platforms
- Revenue stabilization plans
- Multi-year ratemaking
Wrap-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.
Royal Sonesta Houston
2222 West South Loop
Houston, TX 77027
Reserve your room:
please call 855-463-3091 using group code 201912EUCI
Room Block Reserved For:
Nights of December 8 – 9, 2019
Room rate through EUCI:
$134.00 single or double plus applicable taxes
Make your reservations prior to November 17, 2019.