R-304 Tariff Rate Strategies and Cost Recovery Requirements (September 30-October 11, 2019)

Course Offering:

Dates: September 30-October 11, 2019

Location: Washington, DC

Tuition: $5,500

Code: 5117-WA

CEUs: 6.0




Although rate-making has evolved into a complex science involving many useful and creative methodologies, the essence of good tariff design is a thorough understanding of how to establish a revenue requirement for a regulated utility, how to translate that overall revenue requirement into a rate design that customers will pay, and how to use a cost of service study that will aid in translating the former into the latter. Accomplishing this requires an understanding of how to determine reasonable investments and costs in providing service.

This course reviews various ways to design tariff s. Case studies demonstrate how regulated service providers and regulators have used Cost of Service Studies and other methodologies to design eff ective tariff s. Participants work in groups to develop a revenue requirement and design tariff s based on a hypothetical set of facts. Participants also see an example of a Cost of Service Study and its uses and limitations. The course concludes by having participants play the roles of regulators, service providers and other stakeholders in a mock rate hearing.

Learning Outcomes:

  • Explain how to set a revenue requirement and translate it into a tariff design
  • Identify the role of a Cost of Service Study in translating a revenue requirement into a rate design
  • Describe the role of the regulator in the tariff -setting process, methodologies, and relationships with service providers
  • Describe the role of the service provider in collecting and analyzing data to reduce costs and improve service
  • Compare case study experiences on how to (and how not to) determine and adjust prices and the implications/li>
  • Demonstrate how to decouple tariff policies from social and political objectives
  • Illustrate how to calculate, analyze, and adjust tariff structures
  • Visit a regulatory commission rate hearing and participate in a mock rate hearing