EEI Electric Rate Advanced Course: Rates to Meet New Market Opportunities and Constraints
July 24 - 27, 2010
University of Wisconsin
Madison Fluno Center for Executive Education
EEI’s 2011 Electric Rate Advanced Course teaches students ratemaking tools to meet today’s business challenges. This year, the curriculum presents:
· An overview of ratemaking basics as the first and foundational presentation of the course
· Current ratemaking issues, such as those surrounding the prospective implementation of the Smart Grid
· Rate policies needed to build sustainable energy efficiency businesses
· Rate policies (and issues) likely to be encountered in context of policy mandates to promote renewable resources
· New technical issues associated with determining the cost of equity in today’s risk-averse, turbulent capital markets, and related issues of rate case strategy
· New information on customer attitudes, and what they mean for the development of effective regulatory and marketing strategies.
· Ratemaking issues associated with alternative regulatory mechanisms to smooth rate trajectories and mitigate customer impacts in increasing cost environments.
EEI’s advanced rate course provides a unique opportunity for senior staff to practice developing regulatory strategies to address an increasingly complex set of technical and financial challenges.
Sunday, July 24
· Overview of Rate Basics - This session will give students an overview of costing and pricing concepts. It is designed to give students a refresher and starting point on embedded cost of service studies and basic rate design.
Monday, July 25
· Team Assignments - Students will be assigned to teams that develop and present regulatory strategies as the conclusion of the course. Each team will be presented with a set of real-life issues their strategy must address, and will be instructed to draw on class room presentations to configure their strategies.
· Regulatory Accounting – A review of revenue requirements, income statement, balance sheet, rate base, operating expenses, rate of return, and tax treatment concepts.
· Cost Allocation and Marginal Costs – Review the allocation of costs to generation, transmission, and distribution functions (and the development of cost of service for stand-alone distribution services). Hands-on numeric examples that allow students to practice methods of embedded cost analysis (functionalization, classification, allocation), and marginal cost analysis (the development of incremental and decremental costs).
· Customer Trends & Perspectives – Using customer usage trends and perspectives on energy policy, rates, & pricing options to develop more effective regulatory, pricing, and marketing strategies
· Designing Efficient Rates – The role of efficient price signals in guiding efficient consumer consumption and industry investment decisions and the drivers for adopting efficient pricing.
· Energy Efficiency and Renewables – Rate mechanisms and policies needed to deliver energy efficiency services on a sustainable basis (e.g., DSM trackers, decoupling mechanisms, fixed/variable rate design, business models – shared savings, rate base premium return, virtual power plant, performance contracts), and issues associated with rate policies to encourage renewable resources (e.g., feed in tariffs, net metering, DG interconnection procedures).
Tuesday, July 26
· Application of Efficient Rates – The design along with examples of time-differentiated (dynamic) rates, and effective pricing for risk management.
· Pricing as a Strategy for Helping Customers Adapt to Increasing Costs – Managing price risk for dynamic pricing. Hedging. Moving to more efficient rates.
· Cost of Capital - Increases in the cost of debt and equity and the growing challenges of estimating cost of equity with traditional methods (DCF, CAPM).
· Alternative Regulation – Alternative approaches to regulating traditional vertically integrated utilities and power distributors in an era of increased investment needs and slower demand growth. Includes discussion of multi-year rate plans, revenue decoupling, formula rates, CWIP in rate base, accelerated depreciation, and capex trackers.
· Regulatory Strategy Workshop – Students break into teams to craft regulatory strategies that respond to scenarios that reflect today’s business conditions. Separate scenarios for traditional vertically integrated utilities and power distributors.
Wednesday, July 27
· Summation – Assigned teams present their results of the regulatory strategy work groups. Concluding with a round-table discussion that encourages students to integrate information from the previous two and one-half days into a strategic perspective on rate making.
The registration fee for this course is $1,900, and includes instruction, course materials, some meals, and receptions. Deadline for registration at the Fluno Center is June 24th (please see below). Deadline for registration with EEI is July 15. However, until registration is full, late registrations will be accepted. Registration is limited to 35 attendees to assure optimum interaction between participants and the course leaders. Registration withdrawal after July 15 will be subject to a $700 cancellation fee.
To register, go to http://www.eei.org/meetings/Pages/2011-07-24-ElectricRateAdvancedCourse.aspx and click on the register online link. If you have additional questions, please contact Cass Bielski at email@example.com.
Continuing Education Credits
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
22 CPE For Public Accountants
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
19 CPE For Public Accountants
Dates and Accommodations
The EEI Electric Rate Advanced Course will run from Sunday, July 24 through Wednesday, July 27, 2010 at the University of Wisconsin-Madison in the Fluno Center for Executive Education in Madison, WI. The course is sponsored by, and developed in cooperation with, the Edison Electric Institute Rates and Regulatory Affairs Committee.
A block of rooms has been reserved for us at the Fluno Center for Executive Education at the University of Wisconsin-Madison until June 24th. The rate is $144/night. To ensure the availability of a room, please make your reservations before June 18th by calling (877) 773-5866, or go on-line: www.fluno.com. Please mention you will be attending the EEI Electric Rate Advanced Course.
The Fluno Center is a short 15-minute taxi ride from the Dane County Regional Airport. For the fifth consecutive year, the Financial Times of London has ranked the Fluno Center in the top 2 worldwide for food and accommodations for custom programs.