Power and Utilities Cost of Service and Rates

Developing data center electric rates - Not your average customer
Cost of Service and Rates Russ Hissom, CPA Cost of Service and Rates Russ Hissom, CPA

Developing data center electric rates - Not your average customer

Data centers are energy-intensive customers, operating 24/7 to support vital digital infrastructure like cloud computing and servers. Creating tailored electric rates is crucial to ensure reliable service, enhance energy efficiency, and protect rates for other users. Custom solutions meet their unique needs while promoting sustainability.

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FERC Order No. 1920 - Designed to rebuild the new grid but may have unintended impacts

FERC Order No. 1920 - Designed to rebuild the new grid but may have unintended impacts

FERC Order No. 1920, issued by the Federal Energy Regulatory Commission, is a regulatory mandate to modernize and enhance the nation's energy infrastructure's reliability, security, and efficiency. As with any broad order, there are winners and other impacts to consider, plus future court challenges.

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Securing your co-op/utility debt repayment for large industrial customer facilities

Securing your co-op/utility debt repayment for large industrial customer facilities

Industrial customers may comprise a large portion of the load and volume of your electric, gas, wastewater, and water services. They are the customers that can be economic drivers in the community. They can also be the customers that require specific services or expansion of your facilities.

How do you provide financial security for the co-op/utility and rat equity for your other ratepayers? An industrial services contract is one method that is proven to work.

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Electric vehicle charging subscription rates? An app for that?
Cost of Service and Rates Russ Hissom, CPA Cost of Service and Rates Russ Hissom, CPA

Electric vehicle charging subscription rates? An app for that?

An electric vehicle subscription charging rate is gaining traction in the industry. That is, the same flat monthly rate paid by EV customers to charge their vehicles as much or as little as they'd like. What are the financial considerations for an EV subscription rate and the benefits to the EV customer and electric provider?

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Selecting an Expert Witness for Electric Rate or Contract Disputes? Here’s some considerations
Expert Witness, Cost of Service and Rates Russ Hissom, CPA Expert Witness, Cost of Service and Rates Russ Hissom, CPA

Selecting an Expert Witness for Electric Rate or Contract Disputes? Here’s some considerations

An expert witness can be one of the crucial building blocks for supporting a contract or electric rate dispute. Disputes are part of the business and an expert witness can provide strong, supportive arguments and evidence in areas where your team may not have the expertise.

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It’s easy to cut customer electric rates, right?
Cost of Service and Rates Russ Hissom, CPA Cost of Service and Rates Russ Hissom, CPA

It’s easy to cut customer electric rates, right?

A common refrain from customers is that electric bills are "too high"; just cut electricity costs! With electricity costs increasing 15% annually in 2022 and 2023 and recent proposed EPA regulations designed to phase out fossil fuel electric resources, the trend in electricity prices will continue to have upward pressures.

How easy is it to provide reliable electric service and stem the tide of increasing rates? Turns out, it's not easy at all.

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Encouraging water conservation and cost of service water rates
Cost of Service and Rates Russ Hissom, CPA Cost of Service and Rates Russ Hissom, CPA

Encouraging water conservation and cost of service water rates

The utility and electric co-op business model walks a fine line between encouraging customer conservation to be a steward of the environment and recovering the utility's cost of providing service to its customers. Other factors in play, such as greater efficiencies in water use in plumbing fixtures, recycled water, and smart watering, naturally drive down water use. In the electric business, reductions in electric use due to more efficient appliances, air conditioning, hearting, lighting, and computers, coupled with increase in electric use due to electric cars (just the start of that trend) leads to an interesting landscape when it comes to electric rates.

But our topic in this article is how to connect the recovery of the costs of serving water customers and reduce consumption by all customers.

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How do we pay our solar and wind energy providers? What’s fair?
Cost of Service and Rates Russ Hissom, CPA Cost of Service and Rates Russ Hissom, CPA

How do we pay our solar and wind energy providers? What’s fair?

If you’re new to the electric business, you may wonder what Distributed Energy Resources (DER) are and how they fit with the mix of energy options. DER are renewable energy power sources and continue to grow as power supply options. Due to the way they operate, there are different methods for determining how to provide compensation to DER providers.

This article is an introductory primer to some of those reimbursement methods.

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Use ASC 980 or GASB 62 to Bridge the Gap Between Solar Power and Electric Budgets

Use ASC 980 or GASB 62 to Bridge the Gap Between Solar Power and Electric Budgets

ASC 980 and GASB 62 can help revenue recovery of budget misses due to unforecasted solar and renewable energy generation, from distributed energy resources (DER).

With analytical trend tools at our disposal, budgets are more realistic and numbers can be tighter. However, as your DER customers grow, their increased generation trends may not show up yet in historical sales data and not be included in budgets. This article discusses the use of ASC 980 and GASB 62 in making sure budget shortfalls are not “lost” revenues.

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FERC Accounting Report 2022 Uses Data Analytics to Identify Areas for Review

FERC Accounting Report 2022 Uses Data Analytics to Identify Areas for Review

This article discusses the 2022 FERC compliance audit report on issues from auditors. It can be helpful to consider this FERC view when considering items to include in electric rates or accounting approaches to take on various transactions.

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Charge residential electric customers $75 per month, then add usage charges?
Cost of Service and Rates Russ Hissom, CPA Cost of Service and Rates Russ Hissom, CPA

Charge residential electric customers $75 per month, then add usage charges?

The monthly residential customer electric bill consists of a customer charge and a kWh charge. The monthly electric bill for a large power user consists of a kW charge and a kWh charge. Would it surprise you if the costs of the customer charge and the kW charge are two-four times more than the amount charged to the customer? The undercharged amount ends up in the kWh charge. Why is this, why does it matter, and what might you do about it? Read on, and we’ll share some schools of thought on electric ratemaking.

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Electric Cost of Service Rates and Rates for New Technology - One Utility’s Approach
Cost of Service and Rates, Case Studies Russ Hissom, CPA Cost of Service and Rates, Case Studies Russ Hissom, CPA

Electric Cost of Service Rates and Rates for New Technology - One Utility’s Approach

An electric utility recognized that it needed to increase electric rates after developing its budget for the coming year (also known as a revenue requirement). The utility had not increased rates in 5 years and wanted to take the opportunity to move customer rates towards their cost of service and to incorporate distributed energy resources (DER) and electric vehicle charging into their rate structure.

Here are the steps they took to move to cost of service rates and implement innovative rates for residential, DER, and EV customers.

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Electric Rates for Solar Power and DERs

Electric Rates for Solar Power and DERs

Distributed energy resources (DERs) are taking on a greater role in the energy planning process for co-ops and utilities. FERC Order 2222 and the NARUC Distributed Energy Resources Rate Design and Compensation publication discuss this trend and the recommended rate structures that are becoming industry best practices.

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