Our consultants understand utilities and the challenges they face. At Aldrich, we help our clients succeed by using our broad industry knowledge and best practices to achieve their goals. Some of the consulting projects we have completed in the utilities industry include:
Utility Rate Studies
Utility rate studies focus on determining the level of revenue a utility is entitled to receive. Our studies will determine whether, at existing rates, a utility is operating at a revenue surplus or at a deficiency. From these results we can determine the percentage rate increase or decrease needed to existing rates so that the utility can achieve the required revenue level necessary to meet its service requirements to its ratepayers.
Cost-of-Service Studies focus on determining the contribution margin associated with a utility’s services by service category. These studies provide information to policy makers to determine if rates should be adjusted to reflect their direct costs.
Rate Design Studies
Rate design studies are developed when the utility proposes to change its existing rate structure. Aldrich assists clients in designing rate structures to meet its goals and objectives whether they involve changes to the rate structure to match cost causer with cost payer goals; conservation of the utility’s resources by modifying rates from a flat rate to metered rate application, or other public policy goals and objectives that can be achieved through changing the utility’s rate structure.
Cost Allocation Studies
Cost allocation studies focus on determining how costs are shared between affiliated entities, both regulated and non-regulated, or in the case of a municipally owned utility, these studies determine how indirect centralized services cost are shared between general government departments and the utilities. The goal in using these studies is to ensure that cross-subsidization is not occurring between a utilities mix of regulated and non-regulated utilities and operations or between service areas. In the case of municipally owned utilities, the goal of this study is to ensure that the utility is not incurring more than its fair share of the municipalities indirect centralized services cost.