Cost of Service Studies (COSS/COSA)

EES Consulting staff has performed over five hundred electric, natural gas, water, wastewater and stormwater rate studies throughout the U.S. and Canada. We have earned a national reputation in these areas by assisting utilities, end use customers, associations and regulatory commissions in developing automated average embedded and marginal cost of service studies, and in analyzing various cost allocation structures and frameworks. EES Consulting staff has conducted numerous time differentiated average embedded and marginal cost of service rate studies. In addition, EES Consulting is at the forefront in development of unbundled cost of service studies for utilities as they prepare to provide correct price signals to customers.

While this area of expertise was one of the first developed by EES Consulting, we do not lose sight of the overall need for good utility management practices. In order to develop fair and equitable cost allocations EES Consulting staff draws on the non-cost of service expertise of other staff members. Some of the other areas of expertise, the access to which assists EES Consulting in producing more robust cost of service studies, include regulatory understanding, antitrust, econometrics, economic policy review, financial planning, general management, environmental and engineering services. This diversity simply adds breadth of knowledge and expertise to all of our projects.

Because of our broad background in the utility industry and extensive experience conducting cost of service and rate design studies, EES Consulting can provide better service and a better product for a competitive fee. Moreover, as we do not have the high overheads and bureaucracy of the “mega-consulting” firms, we can keep our costs low while continuing to provide more personal and tailored service to meet our clients’ needs.

Anchorage Municipal Light & Power

EES Consulting was retained by the City of Anchorage’s Municipal Light and Power (ML&P) utility to perform a comprehensive electric cost of service and rate study. Performing an electric rate study is necessary to assure that ML&P’s rates recover the cost of operations and are fair and equitable. The cost of service study is used to determine the fair and equitable allocation of the total revenue requirement to the various customer classes of service. Following the COSA, rate design options and cost-based rates were designed based on the results of the revenue requirement and cost of service studies.

FortisBC

EES Consulting was retained by the FortisBC Energy Utilities (FEU) to review and assist the utility in developing its comprehensive cost of service analysis (COSA) for the natural gas utility. EES Consulting worked with the FEU staff in assessing the appropriateness of the COSA methodology and rate design, making recommendations necessary changes, and reviewing the COSA model created by FEU staff. A key component of the FEU COSA is the consolidation of the costs associated with its various utilities into a single COSA using postage stamp pricing throughout the service territory.