OCA issues RFP for help with rate cases

The Office of the Consumer Advocate is bracing for a barrage of electric and gas rate cases beginning in April and continuing through at least the end of 2024!

In an effort to gear up, today we have issued an RFP (request for proposals) seeking assistance from expert consultants who can help us prepare testimony and critique the utilities' filings.

For the details, check out the Jobs and RFPs page of our web site.

Rate cases are the mechanism by which utilities seek permission from the Public Utilities Commission to increase the rates they charge customers.  Here's how they work:

• First the utility's annual revenue requirement is calculated.  The revenue requirement is the sum of the utility's annual operating costs plus two numbers that are multiplied together:  the Rate Base (i.e., the present value of the utility's capital assets used to provide service to the public) and the utility's weighted average cost of capital (WACC).  The WACC is a blended average of what it costs the utility to pay interest on its debts and what return is reasonable to provide the utility's shareholders.
• Once the revenue requirement is determined then costs must be apportioned to the various rate clases (residential, small commercial, large commercial, street lighting, etc.) and rates have to be designed.  Rate design involves questions like: To what extent should the charges be fixed and to what extent should they vary by consumption?  Should the rates vary by time of day or by season?  Should they increase as consumption increases, so as to discourage excess consumption?  That sort of thing.

Is it complicated?  You betcha. That's why we're looking for help from outside experts.