Parrish, Blessing and Associates is providing a “Introduction to Rate Filings in Alaska” training track at the annual Alaska Water Wastewater Management Association (AWWMA) Conference May 13-16, 2019. Visit the AWWMA website for full conference details.
Date: May 13-16, 2019
Location: Captain Cook Hotel
Cost: Full Conference $575
2 Days $450
1 Day $325
How to Register: Visit www.awwma.org
Details: Conference fee includes breakfast, refreshments, lunch, and access to expos and networking events
Monday, May 13
Wednesday, May 15
Thursday, May 16
Revenue Requirement Cost Studies for Regulated and Nonregulated Utilities
Revenue requirement studies begin with historical financial statements of the business and are adjusted for known and measurable changes to test year costs using pro forma adjustments. These adjustments to test year cost determine if the business on a forward-looking basis will be operating at a surplus or deficiency and the required change in rates or revenue necessary to achieve the businesses revenue requirement. These studies provide utilities with accurate estimates of future costs in order to set just and reasonable rates for customers. Attendees to this session will learn basic revenue requirement formulation as required by prudent rate setting standards.
Both Alaska and Federal Law require that utility rates should meet a “Just and Reasonable” standard. Setting just and reasonable rates through the establishment of a fair and reasonable return is intended to maximize the public interest by simultaneously protecting the consumer and the utility’s investors. Just and reasonable rates protect the consumer from monopoly prices. The utility’s investors are protected because just and reasonable rates require that a company be given the reasonable opportunity to cover all costs, including a reasonable profit. This session will walk attendees through the development of the three components of cost of capital – capital structure, cost of debt and cost of equity and how they impact the revenue requirement and rates in both regulated and non-regulated utilities.
Cost–of-Service Studies and Analysis for Regulated and Non Regulated Utilities
Cost-of-services studies begin with the results from a utility’s revenue requirement and provide results on a service contribution to a utilities joint and common cost. Cost-of-service studies are critical to evaluate rate design policies for recovering the revenue requirement. This session will cover how to formulate a cost-of-service study in compliance with RCA regulations, and discussion will center on current RCA rulings and precedents for study formulation and submission.
Rate Design Analysis
After a utility has determined its revenue requirement and completed a cost-of-service study, rates may then be set through a rate design. The art of rate design establishes a rate structure that allocates the recovery of expected costs across all services while reflecting social policy goals and incorporating anticipated demand response to rate. A successful rate design will result in the utility earning its revenue requirement and meeting certain community objectives. This session will include discussion of common rate design methodologies and practices.
Lead-Lag Studies and Analysis
A lead-lag study may be required to determine the amount of working capital a utility must reserve in order to meet its on-going operating costs. To find the amount of working capital needed, a utility must compare the time between receipt of utility service and customer payments and the time between when the utility incurs the operating costs to provide those services. In sum, utility must compute both a revenue lag (or lead) and an expense lag (or lead). In this session attendees will learn how to create a lead-lag study as may be required by the RCA.
Rate Filings: Where Does the Data Come From?
The studies that make up a successful rate filing require large amounts of data from pretty much every department and system in a utility. From finance to human resources and the billing system to the demand management system, a successful rate filing relies on the availability of large amounts of complete and accurate data. This session examines traditional sources of internal and external data to be used in revenue requirement, cost of capital, cost of service, rate design and lead lag studies.
Panel Discussion “Regulatory Lessons Learned”
Former RCA Chairman T.W. Patch, leading Alaska regulatory attorney Dean Thompson, and PBA’s Bill Wilks will share the lessons they have learned during years of experience deciding, handling, and testifying in regulatory proceedings in Alaska. Coming from distinct perspectives, the panelists will discuss what to do and what not to do to achieve the best possible decision in rate proceedings.
Dean is an attorney and partner in the Anchorage law firm of Kemppel, Huffman and Ellis, P.C. Founded in 1975, KHE represents many Alaska businesses in all aspects of public utility law, labor and employment law, and corporate and commercial law. Dean has worked in all phases of utility rate case preparation and litigation since 1990 and regularly practices before the Regulatory Com-mission of Alaska (RCA) on behalf of utility clients. Prior to practicing law, Dean worked for several years as a utility rates and tariffs manager, analyst, and consultant.
T.W. Patch served as an administrative law judge from 2006-2009, and as commissioner from 2010-2016 for the Regulatory Commission of Alaska. As Commissioner and during four terms as Com-mission Chair Mr. Patch managed and oversaw all agency activity, participated in all judicial func-tions of the agency, and took part in all complex or assigned quasi-judicial or adjudicative dockets. Mr. Patch serves on the board of directors for the National Association of Regulatory Commission-ers, the National Regulatory Research Institute, and is the president elect of the Western Confer-ence of Public Service Commissioners. Before serving the Alaska Regulatory Commission, Mr. Patch owned and operated his own law office from 1982-2005.