The Key issues facing utilities in Canada demand attention and expertise that Bohdex regulatory services can deliver as described below:
Rate Application & Hearing Support - Bohdex has specific expertise in Cost of Service studies, Rate Base inclusions and calculations, and Revenue Requirement calculations. In many cases we have served as expert witnesses in support of Local Distribution Companies (LDCs). Some key areas of our regulatory expertise are:
- Corporate cost allocations
- Purchased power cost verification
- Rate base vs. cost of service treatment for smart metering and e-mobile costs
- IT cost treatment related to customer service and smart metering
- Treatment of marketing and public awareness costs related to smart metering
- Activity-Based Cost allocations
- Revenue Requirement determination and Rate Setting
Content Management Solutions to Support Regulatory Submissions: A vast majority utilities prepare for rate hearings, prudency reviews and cost of service filings by scurrying around in a panic for weeks and months prior to the interrogatories to “get their story straight” and assemble the required documentation. This normally results in several 5-inch binders with less than complete supporting documentation on the desks of the nervous witnesses. At Bohdex we have implemented Regulatory specific content management solutions and processes to automate this task and make subsequent regulatory filings easy. With the Bohdex Content Management solutions, you will never again be left with inadequate information and the corresponding revenue risk traditional approaches suffer from.
Revenue Requirement Management - Notwithstanding all the benefits of adopting Time of Use rates to the energy system and overall power consumption in a province or state, the LDC carries the biggest risk of having revenues from TOU rates which don’t recover costs on a year-over-year basis. The regulators have started to address the treatment of costs of smart metering, but the treatment of a deficiency in revenue for an LDC remains unclear in many jurisdictions. Bohdex Utility experts work with LDCs to prepare their case to put in front of the regulator, including the verification of the forecast revenue deficiency, and the proposed basis of recovery.
Performance Based Regulation (PBR) Support - Incentive Regulatory Mechanisms or incentive based regulation (also commonly known as Performance Based Regulation, or PBR) is a regulatory methodology to encourage utility management to be efficient in the running of their business. PBR methodology puts a cap on the utility’s revenues or prices, in order to persuade management to produce and deliver electricity cost-effectively and in many instances incentives are tied to service quality improvement. As utilities are being asked or forced to become more efficient to meet regulatory demands, Bohdex utility solution can provide a variety of tools and solutions to help your Utility meet these increasingly more complex and stringent demands while at the same time improving customer and employee satisfaction.
Rate Base or Cost of Service Adders for Smart Metering - There have been few regulatory decisions in Canada and the US on how to treat the costs of a smart metering program, both at the set up stage and ongoing. Some regulators (such as Ontario) have allowed LDCs to include in their cost of service an amount per customer to recover start up costs, with variances above those allowances provided for in variance accounts, both capital and operating.
The variance accounting raises several important questions for LDCs on future cost recovery:
- Which costs of technology, training, customer support and marketing will be allowed costs?
- Should the utility seek to include some costs in rate base or recover as an add-on?
- Will there be uniform treatment of these costs across your jurisdiction?