Utility Rate Studies

EES Consulting assists utilities in developing rates that incorporate price signals and utility policies and minimize rate shock to customers. There are a number of “generally accepted methodologies” for allocating costs for ratemaking purposes. EES Consulting works with each client to determine the most appropriate cost allocation methodologies. Ultimately rates can take many forms, but they should reflect the component costs that the utility incurs and collect the desired level of revenue. Changes in industry structure, power supply, or legislation often requires that a greater level of detail in retail rate design. These changes create the need to rethink traditional methods of rate design, including unbundling of rates. Consumers will also need more accurate price signals that reflect the true cost of electricity production and delivery. EES Consulting often provides a longer-term plan for rate transitions. Transition plans are particularly to mitigate bill impacts where large changes in rate design are being made. For example utilities moving from declining block to inclining block rates may want to make the transition over a period of months or years.

City of Fargo

For this project, EES Consulting completed the revenue requirement and 25-year financial plans for the street and stormwater departments, which including the division of sales tax revenue during the 2009 to 2012 period between the Water, Wastewater, Street and Storm Water Utilities as needed. EES Consulting provided the following services: 1) Developed the Revenue Requirement for the Street and Storm Water Utilities for the test year; 2) Incorporated the Street and Storm Water Utilities into the 25-year financial model previously developed for the Water and Wastewater Utilities, primarily to determine the division of sales tax revenues between the utilities; 3) Developed a variety of financial model scenarios based on input from City staff, and 4) Updated the Draft Water and Wastewater Financial Options Memo with the resulting 25-year financial model for all utilities.

Seattle City Council

EES Consulting, in cooperation with Council Staff, developed strategies for reviewing rate filings by Seattle City Light 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 provided quantification of the impact of changes in methodology.

Featured Projects

Los Angeles County Aliso Canyon

The County of Los Angeles asked EES Consulting to evaluate alternatives to mitigate the need to withdraw natural gas from the Aliso Canyon storage facility. The facility was used to supply gas during peak winter usage as well as to supply natural gas-fired generators during peak summer demand, but it was shut down after a massive leak released more than 100,000 metric tons of methane. EES found that measures put in place by utilities in Southern California to maintain system reliability without utilizing Aliso Canyon were working, and that resuming natural gas injections was unnecessary in the near term. In the longer term, the acquisition of demand response, energy storage, and energy efficiency could effectively displace the need for Aliso Canyon. EES also provided a series of recommendations to improve the implementation of the mitigation measures. (Image:Earthworks)

Box Canyon Project Studies

Public Utility District No. 1 of Pend Oreille County, in Washington state, selected EES Consulting as the lead consultant for relicensing studies for the Box Canyon Hydroelectric Project.  The relicensing involved numerous engineering and resource studies.  EES Consulting staff members performed studies and managed and coordinated activities of consultants and subconsultants who conducted engineering and environmental studies for project license amendment and relicensing.