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Cost of Service Studies, Rate Design
For expert financial analysis and guidance, turn to Utility Financial Solutions, LLC (UFS) for cost of service, rate design, and financial planning services. UFS specializes in supporting municipal electric, water, wastewater, and telecommunications services.
Experts in the Utility Field, Public Power Professionals
UFS is an industry leader in financial services, offering cost of service and rate design studies modeled to fit each utility’s unique demographics and characteristics.
Designing rates on a marginal cost basis consistent with the utilities’ power supply cost structure is the firm’s specialty. This includes time of use, coincident peak demand, net metering, feed in, and economic development rates. UFS leads the industry in development of targets and policies related to cash reserves, line extensions, rate projections, and methods to assist utilities in improving bond ratings.
UFS provides professional solutions to municipalities across the U.S. With over 72 years of combined experience, UFS has completed over 300 rate studies for utilities in 22 states and testified before state legislatures and regulatory bodies.
Along with providing utility financial planning, cost of service studies, and rate design, UFS works with utility officials to justify revenue requirements for ensuring long-term financial stability.
UFS officials are recognized experts and frequent instructors for the American Public Power Association courses on financial planning, electric unbundling, and developing detailed financial plans.
UFS specializes in municipal utility cost of service & unbundling studies, pricing for retail, wholesale and transmission services, and special financial analysis.
Financial services include:
--Indirect Cost Allocation Review
--Rate Survey of other similar utilities
--Power Cost Adjustment Calculations or Fuel Cost Adjustment Calculations
--Transmission Rate Development
--Unbundling Cost-of-Service
--Policy and Procedure review and development
--Software Selection
--Economic Forecasting of sales and load growth
--Cost Reduction Strategies
--Benchmarking Analysis
--Line Extensions
--Strategic Planning
--Feasibility Analysis
--Financial Analysis
Cost of Service Studies
A UFS cost of service study will provide the fixed and variable costs required to service each customer class of the electric facility and compare actual cost with current revenues anticipated by each customer class serviced. A cost of service study will provide:
•A review of each rate class to identify any need to add a new class by:
--Changing the dividing line for demand between Large General customers and Small General customers
--Determining the need and value of adding a new class of service to large customer categories
--Developing rates for customers with multiple locations within a service territory to adjust for diversity between the accounts and develop a “Campus Billing” rate
•Unbundled electric rates into components that are necessary to identify appropriate rates for customers taking service at various service levels
•Wheeling rates that are determined using the unbundled cost of service results
•Time of Use rates using the cost of service and the unbundled cost results
•Review and assimilate load survey information from sample data base(s)
Rate Design Model
•Proposed charges for each customer using the cost of service and unbundled cost results to move each toward actual cost of service
•Summary of changes in projected revenues and proposed revenues for each customer class
•Detailed report for each customer class that identifies the rate increase against several levels of usage
Financial Projection
•Revenue requirements for current and future requirements
•Rate change options over the planning horizon
•Future projected sales to customers
•Projected changes in power supply costs and expenses
•A pro-forma income statement and statement of cash flows
•Key financial targets for minimum cash reserves, debt coverage ratios, and target operating income
•Current and future capital improvements
•Annual impacts on operating revenues and expenses
•Requirements for future bonding to fund planned capital improvements
Contact Us
For more information on the expert financial services from UFS, contact your Hometown Connections representative.
See the Utility Financial Solutions LLC web site.
• Utility Financial Solutions LLC
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