Schneider Engineering provides rate design, cost-of-service studies and related rates and pricing services for our Clients. We understand that well-designed rates are critical to our Clients’ financial performance and competitiveness. Our services cover comprehensive cost-of-service studies, rate design, power cost recovery design and maintenance, and other related pricing projects.
SE’s Rate-Pricing services provide the following:
- Utility cost-of-service studies
- Utility rate design and support
- Retail rate comparisons, review and recommendations
- Review of financial statements
- Management support for special rate projects, issues and questions
- Wholesale rate analysis and evaluation
- PCRF methodology review, alternatives and ongoing support
UTILITY COST OF SERVICE AND RATE DESIGN
A cost-of-service study gives a utility a foundation for setting rates by allocating revenues from rate classes in accordance with the costs associated with serving the rate class. This allows Clients to assess the financial stability of the utility while ensuring that appropriate margins are maintained to achieve an adequate rate of return.
We also provide rate design options and recommendations that provide unbundled pricing structures critical to the clarity and transparency of the various rate components. We work with Clients to design the best options for power cost recovery and can provide ongoing support for managing and tracking power cost recovery mechanisms.
UTILITY FINANCIAL PLANNING AND FORECASTING
These forecasts cover a 10-year planning horizon and are used to determine key financial indicators, provide documentation for system improvement financing, and also indicate the time frame for rate increases. These forecasts allow Clients to prudently plan the financial future of the utility. The planning process considers economic factors including projected purchases and sales (by revenue class), power costs, capital expenditures, operating costs, debt payments and the impact of these economic factors on equity, TIER (Times Interest Earned Ratio) and DSCR (Debt Service Coverage Ratio) goals, and other economic factors.
The financial forecast provides Clients with the following:
- If and when a rate change is required
- Current and projected financial condition of the utility
- A clear plan for debt and equity goals
- Support for loan applicants
- Full understanding of the Client’s current and projected financial position
Schneider Engineering prepared an engineering analysis, a comprehensive electric cost of service (COS) study, and associated rate design that prepared this Utility for the impact of PEV charging stations at varying saturation levels.