Ratemaking and Utility Regulation

Concentric is the industry leader in consulting on utility rate-setting practices, policies and trends, including cost-based and market-based ratemaking, decoupling, a broad range of cost tracking mechanisms and alternative regulation. We routinely participate in rate-related proceedings and forums at the federal, state, provincial and municipal levels, and offer clients a full menu of ratemaking and regulatory advisory services.

Services

• Cost of service studies
• Marginal cost studies and pricing
• Rate structure development
• Tariff design
• Cost of capital and return on equity
• M&A related testimony
• Revenue and expense adjustment clauses
• Earnings and attrition analysis
• Management prudence
• Rate base (including fair value determination)
• Revenue requirements
• Demand forecasts

Experience

• Class allocated cost of service studies were prepared for the client’s natural gas and electric operations (including two affiliate gas utilities).  Work included reconfiguring the Company’s commercial and industrial customer classes according to size of load and customer-related facilities.  Rate design was updated to recover a greater portion of fixed costs in fixed monthly customer and demand based charges as a transition to a “Straight-Fixed Variable” form of rate design.  Served as expert witnesses on behalf of the client in three general rate cases before the state commission.
• Prepared separate class allocated cost of service studies for four operating companies, marginal cost studies and rate design for the client’s natural gas operations.  This project included reconfiguring the company’s commercial and industrial customer classes according to size of load and customer-related facilities and consolidating from four to two separate sets of rates.  Concentric consultants served as expert witnesses on behalf of the client in a general rate case before the state commission.
• Led rate case preparation activities for several electric and gas rate filings for a major Midwest combination utility. Our team of experts provided comprehensive, in-depth services to expedite regulatory filings for the company with the state regulatory authority for three utility operating companies.
• Managed multiple aspects of simultaneous base rate filings for a utility in Texas and New Mexico, including revenue requirements, cost allocation and rate design, regulatory policy, automatic adjustment clauses and capital attraction.
• Presented cost-of-equity testimony in numerous regulatory proceedings throughout North America and at the FERC, utilizing rigorous risk assessment analysis and comprehensive databases of essential cost-of-capital related information.
• Developed and implemented innovative ratemaking initiatives (including alternative regulation) to address a wide range of pricing challenges. Concentric took the lead on several decoupling efforts to address the issue of declining use-per-customer for natural gas distribution clients. We appeared on behalf of a group of major New England clients seeking revenue stability and compensatory returns in the face of declining use.

Ratemaking and Utility Regulation Contacts