Regulatory COSA Review

EES Consulting has assisted several utilities and regulatory boards with a review of revenue requirement, Cost of Service and rate design in both the US and Canada. EES Consulting staff provides review from the point of view of a rate case intervener; the review is based on the principle of cost causation. The review consists of a detailed examination of functionalization, classification and allocation methods utilized in the COSA study. In addition, EES Consulting provides a discussion of data issues and identifies modeling improvements as part of the review.

In addition to providing review of cost of service and rate design, EES Consulting also provides assistance in regulatory settings as cost causation experts. EES Consulting can help clients determine the optimal methodology for allocating various costs ranging from overhead and common cost allocation to designing a distribution utility COSA methodology for a regulatory entity.

Ontario Energy Board

Ontario Energy Board (OEB) requested the assistance of EES Consulting to develop a survey on the regulatory cost allocation practices of other countries throughout the world. As part of this project, EES Consulting used published sources to survey regulatory agencies in Canada, USA, Australia and Europe to determine the methodologies used to allocate regulatory agency costs across the various regulated utilities. EES Consulting compared the survey results with the current OEB cost allocation methodology and recommended a best practice for future cost allocations.

BC Ferries

British Columbia Ferry Services Ltd. (“BCFS”) engaged EES Consulting to provide an independent expert report for inclusion with a filing by BCFS with the British Columbia Ferry Commissioner. EES Consulting was asked to provide our independent, objective opinion with respect to the use of deferral account mechanisms to manage volatility in cost or revenue inputs consistent with industry practice in rate regulated industries and the ratemaking considerations and principles that should be reflected in the design of an effective deferral account mechanism. EES Consulting reviewed past precedence, interviewed BC Ferries staff regarding cost causation and operations details and provided an opinion letter and support to BC Ferries.

Seattle City Council

EES Consulting, in cooperation with Council Staff, developed strategies for reviewing rate filings by SCL for the drainage, wastewater and solid waste utilities. These strategies determined key areas of focus for each rate proposal in the areas of revenue requirement, billing determinant forecasts, rate design, functionalization, classification and allocation methods. EES Consulting assisted Council staff in reviewing SCL rate proposals for the following utilities: wastewater, drainage and solid waste based on the strategy developed in the previous task. EES Consulting also provided assistance with the identification of issues that warranted further review, running alternative scenarios or methods for the cost allocation, and the quantification of the impact of changes in methodology.