INHOUSE SEMINAR OR WEBINAR FOR YOUR UTILITY

We are not offering any public webinars for 2025. However, we are doing seminars at utility companies or virtual webinars on Zoom when requested by the utility.

 

Dr. Joel Berk will customize and teach a seminar or webinar for your company. The topics are the same as our public seminars but will incorporate your financial statements, rate case documents and other unique company data. A two day version of our seminars can be created by eliminating some topics.

Dr. Berk has designed and presented these seminars at over 140 Utilities, Public Utility Commissions and Law Firms. For a list of these organizations see Dr. Berk’s Vita.

We will prepare and ship you a detailed set of seminar notes for each attendee.  These printed notes will be sent before or handed out on the first day of class. These notes are the cornerstone of the webinar content.  Attendees should take notes during the lecture, discussions, group projects and attendee presentations.

The fee for a three day seminar is $55,000 for the first 30 participants and $1200 per person for those attending over the first 30. The fee for a two day seminar is $45,000 for the first 30 participants and $1000 per person for those attending over the first 30.  Any travel, food and lodging expenses of the instructor are additional.

In preparing a seminar for your utility, we request information about each topic in the seminar. These requests, detailed below, give you more insight into what we will be covering. We could also customize a seminar combining topics from our two public seminars.

For the same fee structure we can present a virtual webinar, although we could spread the three seminar days over four 6 hour zoom days or for a two day seminar we spread  the material over three 6 hour zoom sessions.

UTILITY FINANCE & ACCOUNTING FOR NON-FINANCIAL PROFESSIONALS


Financial Accounting Institute
Tenafly, NJ 07670
www.financialaccounting.com
201-568-0249

Information to be supplied by Client — For each topic in the webinar FAI is asking your utility to supply information and/or documents in order to make this topic most relevant to the students. Although some of this information may be on the web we would appreciate links to the material or pdf’s of the material. If this information is not supplied, FAI will use examples from public documents from your company or from relevant utility companies. Under each topic the Info Request section outlines the information FAI would like to have and is an indication of the degree of customization on this topic.

Sources of this information at your company would be Rate or Revenue Requirements Group, Comptroller’s Office, Chief Financial Officer’s Group, and Investor Relations. If some information is unavailable or proprietary you can so indicate.

A. Basic Accounting Concepts

  1. Two hard copies plus pdf (or web link) of the latest Annual Report of the utility or of each utility if more than one utility subsidiary and of the parent company if the utility has a parent. The pdf copy should have the same page numbers as the hard copy of the report. (This report will be supplied by you to each person taking the class.)
    Remaining items in this data request should be in electronic version only – pdf, web link, docx, etc.


  2. A statistical summary of the company, parent and/or subs that are normally sent to financial analysts on Wall Street.


  3. Copies of the last detailed analysis by S&P and Moody’s resulting in the current bond rating. These should be documents between 8 and 25 pages long.


  4. Several pages from a detailed Budgeting and Control Report. This should be the kind of report which the attendees at the seminar would see either because they or their supervisor gets this report each month. This report should have both actual versus budget figures on it.

B. Financial Statement Analysis

  1. An example of the calculation of the earned regulatory return on equity for one or more of regulated entities and utility services and a reconciliation to the financial ROE for that business if available.


  2. A page from a presentation to financial analysts or others showing some or all of the financial measures for the utility or the parent company. These financial measures should include shareholder return, ROE and book values.

C. The Utility’s Four “Sets of Books”

If your company has multiple utility subsidiaries or operates in multiple states you may want to select one or more regulated utility companies and states as the examples rather than provide information for all rate cases. If your organization is a Public Utility Commission choose one or two utilities that you feel would be good examples for the seminar and try to get the information for these companies. This should be done for all of the Info Requests below.


  1. The most recent litigated rate order. This should be an order which shows disallowances and the development of the revenue requirement (not a case which was settled).

  2. Two or three examples of expenses disallowed in a rate case with relevant sections from the testimony of various parties and the commission’s decision.


  3. One or two examples of rate base items disallowed in a rate case with relevant sections from the testimony of various parties and the commission’s decision.


  4. A description of any kind of adjustment to rates other than the rate case. For example, fuel or gas adjustment clauses, weather normalization. Include information on which jurisdictions, frequency, lag in changing the rate and whether this change is separately shown on the customer’s bill


  5. An executive summary of the issues and outcome in the rate case.


  6. If the last rate case was settled, the order from that settlement and a summary of that case.


  7. A chart similar to the one shown here for the each jurisdiction and utility service with reference to the last rate order

    Jurisdictions/Services FERC STATE 1 STATE 2
    % of Parent Company Revenue
    Date Filed
    Date of Last Rate Order
    Allowed Return on ST Debt
    Allowed Return on LT Debt
    Allowed Return on Preferred
    Allowed Return on Equity
    Overall Allowed Return
    Test Year Ended
    Type of year used is generally used (historic, projected)
    Is the year used called the test year or rate year?
    Does the commission reduce the rate base by the deferred?
    Taxes due to the normalization method or include these deferred taxes at a zero rate in the allowed return on rate base?
    Comparison of the State Commissions. Please provide this report if available. If known, what test year will be used for the next rate case?
    When will the next rate case be filed? Label this as to whether it is a known date or guess.
    Why will the next rate case be needed?
    What were the major issues in the last case?
    What will be the major issues in the next rate case?

D. Role Playing Exercise — Rate Case

  1. What kind of advertising is allowed above-the-line in rates in each jurisdiction? Why?


  2. Please provide details of any advertising disallowance in a recent rate case including relevant sections from the testimony of various parties and the commission’s decision.


  3. Did the company have any disallowance of contract costs in recent rate cases? Please provide details including relevant sections from the testimony of various parties and the commission’s decision.

E. Modifications to Rate of Return Regulation

  1. An example of the calculation of the earned regulatory return on equity for one or more of regulated entities and utility services and a reconciliation to the financial ROE for that business if available.


  2. A page from a presentation to financial analysts or others showing some or all of the financial measures for the utility or the parent company. These financial measures should include shareholder return, ROE and book values.

F. Present Value Analysis and Exercise

  1. An example of the calculation of the earned regulatory return on equity for one or more of regulated entities and utility services and a reconciliation to the financial ROE for that business if available.


  2. A page from a presentation to financial analysts or others showing some or all of the financial measures for the utility or the parent company. These financial measures should include shareholder return, ROE and book values.

G. Shareholder Value Maximization

  1. An example of the calculation of the earned regulatory return on equity for one or more of regulated entities and utility services and a reconciliation to the financial ROE for that business if available.


  2. A page from a presentation to financial analysts or others showing some or all of the financial measures for the utility or the parent company. These financial measures should include shareholder return, ROE and book values.

H. Accounting for Utility Plant

  1. An example of the calculation of the earned regulatory return on equity for one or more of regulated entities and utility services and a reconciliation to the financial ROE for that business if available.


  2. A page from a presentation to financial analysts or others showing some or all of the financial measures for the utility or the parent company. These financial measures should include shareholder return, ROE and book values.

I. Accounting for Income Taxes

  1. Are there any examples in the past where there was a timing difference larger than the depreciation timing difference?


  2. A chart similar to the one shown here for the each jurisdiction and utility service.

    States STATE 1 STATE 2 STATE 3 …
    Is any flow through used
    Examples of largest flow through items
    Overall tax rate Federal + State (net of Federal deduction)

J. Cost of Capital

  1. Analysis of the company’s cost of capital (i.e., discount rate in the engineering economics’ analysis).


  2. What is the hurdle rate used for capital budgeting decisions? Is it the same for all projects?


  3. A copy of the cost of capital testimony from a current rate case or the last rate case. This should include all the exhibits especially the DCF methodology.


  4. What is the Bond Rating on the senior secured debt from S&P and Moody’s?

K. Capital Project Analysis Review Case

  1. Does the company have a standard computer program or excel template for making major capital expenditure decisions? If so provide a sample analysis including a summary page or two showing the present value of the cash flows analysis. Please send a copy of any manual or documentation on how the company’s computerized project analysis system works.

UTILITY FINANCE & ACCOUNTING FOR FINANCIAL PROFESSIONALS

A. Calculation of ROE for the Utility and Parent Company

  1. A PDF of the latest Annual Report of the utility or of each utility if more than one utility subsidiary and of the parent company if the utility has a parent.


  2. A statistical summary of the company, parent and/or subs that are normally sent to financial analysts on Wall Street


  3. An example of the calculation of the earned regulatory return on equity for one or more of regulated entities and utility services and a reconciliation to the financial ROE for that business if available.


  4. Copies of the last detailed analysis by S&P and Moody’s resulting in the current credit rating. These should be documents between 8 and 25 pages long.

B. Rate of Return Regulation

If your company has multiple utility subsidiaries or operates in multiple states you may want to select one or more regulated utility companies and states as the examples rather than provide information for all rate cases. If your organization is a Public Utility Commission or a Law Firm please choose one or two utilities that you feel would be good examples for the seminar and try to get the information for these companies. This should be done for all of the Info Requests below.


  1. The most recent litigated rate order. This should be an order which shows disallowances and the development of the revenue requirement (not a rate case which was settled).

  2. Two or three examples of expenses disallowed in a rate case with relevant sections from the testimony of various parties and the commission’s decision.


  3. One or two examples of rate base items disallowed in a rate case with relevant sections from the testimony of various parties and the commission’s decision.


  4. An executive summary of the issues and outcome in the rate case.


  5. If the last rate case was settled, the rate order from that settlement and an executive summary.


  6. A chart similar to the one shown here for the each jurisdiction and utility service with reference to the last rate order

    Jurisdictions/Services FERC STATE 1 STATE 2
    % of Parent Company Revenue
    Date Filed
    Date of Last Rate Order
    Allowed Return on ST Debt
    Allowed Return on LT Debt
    Allowed Return on Preferred
    Allowed Return on Equity
    Overall Allowed Return

C. Modifications to Rate of Return Regulation

  1. Does the company have any adjustments to their rates which occur without a general or overall rate case (i.e., one which addresses all of the utility’s revenue requirement). If so please include a description of how this works.


  2. Does the company operate under any of the items listed above. If so please provide details.


  3. Steps the company has taken to address the problem of Regulatory Lag.

D. Energy Adjustment Clause

  1. A copy of the last order from the commission discussing recovery of an energy adjustment (if applicable).


  2. A description of how each type of adjustment mechanism works (including trackers, riders, balancing accounts, etc.). Frequency of rate adjustment, when the adjustment occurs, any interest accrued, is the adjustment a 100% pass through, etc.


  3. What are the clauses called?


  4. A recent rate order for such an adjustment mechanism.


  5. An example of a disallowance of costs related to an adjustment clause.


  6. What are the additional charges or credits called on the ratepayers’ bills?


  7. A sample bill sent to a customer and a written description of how to read this bill (if one exists).

E. GAAP for Utilities

  1. Which parts of the utility if any do not follow ASC 980?


  2. Which parts of the parent company do not follow ASC 980?


  3. What is  the largest non-regulated revenue activity of the utility and what percent of the total revenue of the utility does this represent?


  4. If any utility operations went off of ASC 980 in the last 10 years please identify why that occurred, when that occurred.


  5. Provide an example of a ASC 980-360-35 disallowance at the company or sister utility company.  This would be a disallowance of new utility plant which was on ASC 980.


  6. Provide an example of an ASC 360-10-15 impairment loss.  This would typically be for non-regulated plant or deregulated plant.


  7. A list of the Regulatory Assets and Liabilities at the utility with amount, amortization period, whether approved for recovery and whether include in rate base or interest is accrued on the amount.


  8. An example of a regulatory asset for which the commission subsequently disallowed all or a portion from recovery.


  9. What is the Bond Rating on the senior secured debt from S&P and Moody’s?

F. Capitalization Versus Expense

  1. A description of the capitalization policy of the utility.


  2. A few pages from the list of retirement units of property and the dollar amount above which items which are not part of retirement units nor retirement units themselves are capitalized.


  3. Under what conditions would a desktop computer be capitalized?

G. Plant Issues

  1. A copy of an analysis done to determine whether the utility has a reserve deficiency.


  2. A copy of the last depreciation study.


  3. Information regarding which plant assets have removal cost included in rates. What percent of the total gross plant is of this nature.


  4. What assets have an ASC 410-20 Asset Retirement Obligation. Provide an explanation of the dollar changes from the end of the year before last to the end of last year in either one of these assets or the total for the utility.

H. Accounting for Income Taxes

  1. What are the largest permanent differences at the utility?


  2. Are there any examples in the past where there was a timing difference larger than the depreciation timing difference.


  3. A chart similar to the one shown here for the each jurisdiction and utility service

    4. States STATE 1 STATE 2 STATE 3 …
    Is any flow through used
    Examples of largest flow through items
    Overall tax rate Federal + State (net of Federal deduction)

J. CWIP and AFUDC

  1. A copy of a Monthly Capital Project cost summary with budget versus actuals. This should be a report which the Project Manager would receive.


  2. How is the AFUDC rate determined in each jurisdiction? Is the FERC methodology used? If not specify the procedure.


  3. A copy of the AFUDC rate determination.


  4. Is the CWIP in the rate base for any jurisdictions? Specify amount and how and when this amount was determined.

K. Accounting Methods and their Impact on Financial Metrics

  1. Does the company own or lease its office building? Why?


  2. Does the company have any capital leases? Describe.


  3. Does the company use any of the following financial metrics for internal or external reporting? EBIT, EBITDA, Cash Flow, Free Cash Flow. Please provide the definition used and a sample of a report on which this metric appears.

L. Credit Rating

  1. Copies of the last detailed analysis by S&P and Moody’s resulting in the current bond rating. These should be documents between 8 and 25 pages long.