EEI Advanced Rates Course

EEI Electric Rate Advanced Course

Rates to Meet New Market Opportunities and Constraints

July 24- 27, 2011
University of Wisconsin
Madison’s Fluno Center for Executive Education
Madison, WI

Speaker’s Link

 Attendees Link

EEI Registration Link


Agenda Overview

For details, see “Quick Links” above, right.

 

  • Overview of Electric Ratemaking Basics
  • Regulatory Accounting and Advanced Rate Design Concepts
  • Issues in Cost Allocation
  • Rate Design by Objective
  • Development of Marginal Costs
  • Using Customer Information to Develop Better Regulatory & Pricing Strategies
  • Designing Efficient Rates
  • Rates to Support Increased Energy Efficiency and Demand Response
  • Feed in Tariffs
  • Features of Efficient/Dynamic Pricing
  • Results from Past Rate Programs:  Who Responds, How Much and Going Forward
  • Dealing With Changes in Revenue Streams
  • Pricing as a Strategy for Helping Customers Adapt to Increasing Costs
  • Current Issues in Cost of Capital
  • Risk Management vs. Risk Compensation
  • Alternative Regulation (Altreg)

Quick Links

Registration Information
Accommodations/Location
CLE/CEU Information

 Sunday Agenda
Monday Agenda
Tuesday Agenda
Wednesday Agenda
 

 Course Faculty

Larry Blank
Center for Public Utilities
New Mexico State University

Philip Hanser
The Brattle Group

Eric Ackerman
EEI

Steve Braithwait
Christensen Associates Energy Consulting

Jonathan Kubler
Energy Pricing Solutions

Mike Vilbert
The Brattle Group

Dick Wight
Energy  Solutions

Mark Lowry
Pacific Economics Group

John Caldwell
EEI

Continuing Education Credits: CEUs and CLEs

The course offers the following continuing education credits for students attending the pre-course workshop.

  • 22   CLE Continuing Legal Education
  • 2.2  CEU Continuing Education Units

For those students not attending the pre-course workshop the credits are as follows:

  • 19   CLE Continuing Legal Education
  • 1.9  CEU Continuing Education Units


Registration Information

The registration fee for this course is $1,900, and includes all instruction, course materials, breaks and lunch meals and reception on Sunday night.  Registration is limited to 35 attendees to assure optimum interaction between participants and the course leaders.
To register, please visit: EEI Registration Site

For course information please contact Cass Bielski at cbielski@eei.org.

Site and Accommodations
 

Meeting Site:  The Fluno Center
A beautifully equipped training facility in the heart of the Madison-Wisconsin Campus, just blocks from the famous Terrace overlooking Lake Mendota.  Rooms are available at a flat rate of $144/night.

To make reservations via phone, please call: 877-77-FLUNO or direct at 608-441-7117
Give the agent the dates of your stay and your group code – EEI
 
  

Teams will create a strategy for handling a rate problem.

Detailed Agenda

Sunday

  • Overview of Electric Ratemaking Basics
  • Components of Revenue Requirements
  • Class Cost of Service
  • Basic Functionalization, Classification and Allocation
  • Basic Rate Design

 

Monday

Regulatory Accounting and Advanced Rate Design Concepts

  • Review of Revenue Requirements
  • Regulatory Accounting vs. “Regular” Accounting
  • The Income Statement and Balance Sheet
  • The Rate Base and its Components
  • Operating Expenses
  • Rate of Return and Capital Structure
  • Tax Treatment

 

Issues in Cost Allocation
  • Cost of Service
  • Types of Costs
  • Functionalization
  • Classification
  • Rate Class Cost Allocation
  • Cost Allocation and Revenue Requirements

 

Rate Design by Objective

  • Alternative Rate Options
  • Measuring Efficiency
  • Revenue Sufficiency
  • Rate Continuity
  • Modifiying a Large GSA

 

Development of Marginal Costs

  • In Traditional Markets and Restructured Markets
  • Steps in Developing Marginal Cost-Based Rates
  • Carrying Charges
  • Marginal Generation Costs
  • Marginal Transmission and Capacity
  • Marginal Distribution
  • Costing Periods
  • Attributing Costs to Costing Periods
  • Adjustments for Marginal Cost Losses
  • Reconciliation

Other Uses for Marginal Costs

  • Smart Grid
  • Distribution Utility of the Future

 

Using Customer Information to Develop Better Regulatory & Pricing Strategies

  • Overall kWh Usage Trends & Customer’s Potential/Willingness to Change Usage
  • Differences in Customer’s Energy Service/Price Expectations & Values
  • Why Utilities Will Be Expected & Required to Change Strategies to be more Customer & Energy Efficiency Focused
  • Applying Customer Information to Improve Regulatory & Pricing Strategies

 

Designing Efficient Rates

  • Features of Traditional Rates
  • Role of Smart Metering in Expanding Efficient
  • PricingRates to Support Increased Energy Efficiency and Demand Response
  • Fixed/Variable Rate Design
  • Business/Incentive Models
  • Issues Associated with Renewable Resources
  • Feed in Tariffs
  • Net Metering
  • DG Interconnection Procedures
  • Debt Imputation

 

Features of Efficient/Dynamic Pricing

  • Designing Efficient Rates-
  • Dynamic Pricing
  • Straight/Fixed Variable
  • Increasing Block Rates

 

Results from Past Rate Programs:  Who Responds, How Much and Going Foward

 

Dealing With Changes in Revenue Streams

  • DSM Cost Trackers
  • Decoupling Mechanisms


Tuesday

Pricing as a Strategy for Helping Customers Adapt to Increasing Costs
  • Managing Price Risk for Dynamic Pricing
  • Hedged Rate Options
  • Shifting Risk to Customers
  • Lessons Learned When Moving to More Efficient Rates
  • Barriers (Smart Meters, Administration, and Making Changes)
  • Missed Opportunities
  • Educating Customers
 
Current Issues in Cost of Capital
  • State of the Markets
  • Implications of Increased Variability
  • Traditional COE Methods and Their limitations
  • Sources of Risk, Old and New
  • Earned Returns vs. Allowed Returns
  • Rate Design and the Effect on the Cost-of-Capital
  • Responding to Arguments for Lower Allowed ROE
Risk Management vs. Risk Compensation
  • Proxy groups
Alternative Regulation (Altreg)
  • Performance-Based Regulation (“PBR”)
  • Rate caps
  • Revenue caps for revenue decoupling
  • Benchmark PBR
  • Formula Rates
  • Recent Developments and Key Precedents
  • Crafting an Altreg Strategy
  • Applications to Vertically Integrated Utilities and Distributors Forward Test Years
  • Altreg for Investment Surges


Wednesday

  • Two Utility Case Studies
  • Team Presentations on Alternative Strategies to Meet Contemporary Rate Issues
We will adjourn by 11:30 am
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