Cost Challenges for Today’s Utility
Mechanical Engineering building, UW-Madison campus
1513 University Ave., Rm 1106
Is cost allocation truly more of an art than a science? Is a cost of service study still relevant in today’s world?
Can a “one size fits all” approach be used? How do electric and natural gas cost allocation approaches differ?
This program will explore the answers to these questions, how to deal with the challenges in determining costs,
and how allocation of costs is changing.
8:15-8:30 Registration check in and welcome coffee
8:30-9:30 Introduction to Current Cost Allocation Methods — What is a cost of service study? What is its purpose? How has the landscape changed over time? How to deal with marginal cost vs. embedded cost? Learn from this session how costs are split up by function, what the cost drivers are, and how to allocate costs. Bruce Chapman, Vice President, Christensen Associates Energy Consulting
9:45-10:45 Public Service Commission of Wisconsin Perspective on Cost Allocation – Hear from Commission staff on how the Commission views the importance of cost of service, as well as key cost of service issues that arise in rate case applications. Also hear from Commission staff about what regulatory changes are foreseen. Kate Christensen and Sam Shannon, Rates and Energy Analysts, Public Service Commission of Wisconsin
11:00-12:00 Utility Perspective on Cost Allocation – What are the strengths and weaknesses of how utilities use cost of service studies? What are the cost underpinnings of the debate regarding pricing for distributed energy resources? (What distribution costs should a DER customer cover, and what costs do utilities avoid in serving DER customers?)
Moderator: Scott Smith, Assistant Vice President, Business and Regulatory Strategy, Madison Gas and Electric
1:00-2:00 Customer Perspective on Cost Allocation – In this session, you will hear about how an intervenor uses a cost of service study and what some of the differences are between an intervenor and a utility on the importance of a cost of service study.
Moderator: Kira Loehr, Senior Counsel, Perkins Coie
2:00-2:45 Key Differences between Electric and Natural Gas Cost of Service Studies – Hear from an expert who has performed cost of service studies on all of the natural gas utilities and most of the electric utilities that service their Michigan ratepayers. Learn what the differences are between electric and natural gas cost of service studies. You will also hear about the Michigan Public Service Commission’s perspective on the various attributes of the cost of service study regarding cost allocations, classifications and functionalization per state statute or its orders. Bonnie Janssen, Public Service Engineer Specialist, Energy Markets Section, Michigan Public Service Commission
3:00-4:00 Future Directions for Cost of Service Studies/Rate Regulation – This panel of experts will share their thoughts on the increased use of marginal cost-based allocation of embedded costs at vertically-integrated utilities. Additionally, they will address how costs are benchmarked, discuss the purpose and role of alternative regulation in cost management, and elaborate on some of the technical challenges and methods available for allocating costs.
Moderator: Steven Fenrick, Leader, Economics and Market Research, Power System Engineering, Inc.
Panel: Tyrel Zich
Your registration fee includes welcome coffee, breaks, and lunch.
Disruption in the Electric Industry
Threats and opportunities of disruptive competition, and whether and how traditional utility models may need to be adjusted.
Your registration fee includes welcome coffee, breaks, and lunch. CEUs will be available.
3.2 CEUs availableEnergy Utility Basics is an intensive course on the fundamental concepts critical to being conversant in today’s energy industry. Course content is updated yearly as technology, regulation and markets evolve. WPUI has proudly presented this exceptional course each fall since 1983.
Course Summary: Over the course of a week, participants will receive an overview of the history of the electric and natural gas industries, insights into regulatory decision-making, and analysis of the current issues facing the energy industry.
Benefits: Attendees will obtain practical knowledge of the operations and technology of the natural gas and electricity industries from extraction, whether from the ground or renewables, to the customer’s bill. Course registration covers a field trip to a power plant, daily lunches and breaks, printed course materials and continuing education units (CEUs).
Who Should Attend: The energy industry has undergone substantial changes – including changes in hiring practices. Twenty years ago, utility industry staff would learn about the industry by working their way up through the ranks. In today’s fast-moving business environment, often staff are hired from other industries, bringing along important skill sets but lacking a working knowledge of the energy industry.
Energy Utility Basics is intended for anyone working in the energy industry, including public interest groups, utility employees, legislative staff, regulatory staff, state and local government personnel. This course is for energy professionals, those new to the industry as well as those assuming new responsibilities, who want a better grasp of how all the technological, financial and administrative pieces of the energy puzzle fit together.
Registration is open to the public.
Sunday, October 7:
3:00-4:00pm Optional UW-Madison campus walking tour
Monday, October 8:
History — Industry Structure
Why a regulated monopoly? Who’s regulated, why and how:
The federal and state perspective
- Federal Roles, Rules, Spheres of Influence
- The Public Service Commission-Roles and Rules, Balance of Power
- Transmission-The Overlooked Connection Until 1970
- Utility Company Models – Presentations and Panel Discussion
- Independent System Operator/Regional State Committee
Tuesday, October 9:
Industry Operations — Stock Prices
From Heat to Electricity – How we make Electricity in the U.S.
- Field Identification Guide to the Electric Industry
- A Day in the Life of a Distribution Company
- A Day in the Life of a Transmission Operator
- What Drives Stock Prices?
- Optional Field Trip: Campus heating/cooling plant
- Cost of Service
- Rate Design
- Strategies for Fixed-Cost Recovery Issues
- Performance-based Regulation
Thursday, October 11:
Low to No Carbon Options
Getting Work Done with a Small Carbon Footprint
- Gas Market Overview
- Where does it come from? How is it created?
- What is unconventional gas?
- Gas markets – future supply/demand
- A day in the life of a gas company
- Renewables Panel
Friday, October 12:
- The baseload of the future?
- Tour of UW-Madison nuclear reactor (tentative)
Legal Issues the Energy Industry
WPUI Member — $1450
Non-Member — $2250
Government (non-utility) — $800
Non-profit — $1450
What 2017 participants said:
“Great variety; all related in some way to my work; material covered a wide array of sector topics.”
“Exposed me to areas that I was not familiar with. The engineering/science/geology behind the industry was very informative for me.”
“This was an excellent course with high quality, diverse speakers – well worth my time! I will be sending staff in the future.”
“I’m new to the industry, and it was so helpful to me.”
“Clear schedule and topics, communicated well in advance, and followed consistently — very good!”
“Tons of information presented in an efficient manner.”
“Above and beyond expectations; a welcoming atmosphere; learned valuable basic concepts and terms.”
“It was a very good class and well run. I will recommend the course and encourage my colleagues to attend in the future. Thanks!”
“One of the best trainings I have attended in years!”
Your registration fee includes printed materials, lunches, breaks and access to materials on our website post-program. CEU certificates will be emailed to you upon completion of the course.