CENTER FOR PUBLIC UTILITIES

of FERC Orders Role of the FERC in Pipeline Regulation The Legal Process of Filing Rate Cases at the FERC The Process of Determining Revenue Requirements Conducting a Cost-of-Service Study Designing Rates for Various Pipeline Services Cost-Based Rates v. Market Based Rates Recent FERC Decisions Impacting the Pipeline Industry Practical Regulatory Training "or the Electric , Natural Gas , Telecommunications and Water Industries PROGRAM OUTLINE Electric Industry SUNDAY, MAY 10 6:30 3 8:00 p.m.: Registration and Reception INSTRUCTORS MONDAY, MAY 11 8:00 3 8:15 Welcome, and Overview of Course Doug Gegax 8:15 3 12:00 Introduction to the Technology, Institutions and History of the Electric Industry Doug Gegax Electricity, Generation Technologies, Network Components System Operations, Ancillary Services & Interconnected Utilities The Basic Structure of Electric Utility Regulation Key Federal Statutes Affecting the Industry and FERC Orders 888 & 2000 Wholesale & Retail Restructuring 3 Regional Differences in Industry Structure Distribution-Only Utilities vs.<br><br> Vertically-Integrated Utilities 1:00 3 4:45 Overall Cost of Service/Revenue Requirements Bill Steele Components of Revenue Requirements 3 Rate Base, Expenses Taxes, Depreciation and Net Operating Income The Components of the Weighted Average Cost of Capital What Triggers a Rate Case and Who are the Players The Book Data, Uniform System of Accounts & FERC Form 1; Test Year Adjusted Revenue Requirements at Present & Proposed Rates 4:45 3 5:15 Set up Revenue Requirements Problem Doug Gegax TUESDAY, MAY 12 8:00 3 11:15 Revenue Requirements Problem Gegax/Steele 11:15 3 12:00 Discussion of Revenue Requirements Problem Bill Steele 1:00 3 3:00 Total System and Class-Specific Load Characteristics Larry Blank Load Curves, Load Factor, Coincidental Peak Demand Non-Coincidental Peak Demand, Average-Excess Demand Overview of Class Cost-of-Service (COS) Studies 3:15 3 5:00 COS Studies: Cost Functionalization Doug Gegax COS Studies: Cost Classification WEDNESDAY, MAY 13 8:00 3 10:00 COS Studies: Cost Allocation Blank/Gegax Summary of Revenue Requirements and COS Studies 10:15 3 12:00 Introduction to Rate Design Blank/Gegax Components of a Tariff and Criteria for a Sound Rate Design Base Rates & Automatic Adjustment Clauses Billing Determinants & Customer, Energy and Demand Charges (Rates) Class Rate Design Alternatives: Determining Rate Elements by Class 1:00 3 7:00 p.m. Trip to Santa Fe (optional) THURSDAY, MAY 14 8:00 3 10:30 Issues Surrounding Fixed-Cost Recovery through the Energy Charge Blank/Gegax Metering Issues and Class Demand versus Billing Demand Block Rate Design, Interruptible-Service Rates and Time-of-Use Rates Rate Design Issues for Distribution-Only Utilities and Standard-Offer Service 10:45 3 12:00 Integrated Resource Planning Tim Scanlon 1:00 3 3:00 Demand-Side Management (DSM) & Demand Response Tim Scanlon Revenue De-Coupling: What is it; Where and Why is it Used 3:30 3 5:00 Green Power, Renewable Portfolio Standards, Renewable Energy Credits Net Metering FRIDAY, MAY 15 8:30 3 9:30 Service Tariff Terms and Conditions Larry Blank 9:30 3 11:00 Step-by-Step Process and Procedures of a Rate Case: The Utility Application, Building the Written Record, Settlement vs. Contested Hearing, The Final Order and Procedures for Appeals PROGRAM OUTLINE Water Industry SUNDAY MAY 10 6:30 3 8:00 Registration and Reception MONDAY, MAY 11 INSTRUCTORS 8:00 3 12:00 Total System and Customer-Class Demand Characteristics: Tom McGuckin Time pattern of consumption: Peak and Average Demand vs.<br><br> Consumption Non-Coincidental vs. Coincidental Peak Demand, Maximum Day vs. Maximum Hour Measurements, Diversity Factors The Extra Capacity Requirement for Fire Protection Computing and Using Demand vs.<br><br> Commodity Allocators 1:00 3 5:00 What is Cost-of-Service and the Purpose of Rates? Tom McGuckin Overall Cost- of-Service/Revenue Requirements Test -Year Data Expenses, Taxes and Depreciation Rate Base Capital Structure, Cost-of-Capital, and Fair Return TUESDAY, MAY 12 8:00 3 12:00 Trends and Technology Tom McGuckin Basic Water System Design and Water Sources The Extra Capacity Requirement for Fire Protection Redundancy and Metering Issues Industry Structure and History of the Water Industry Impact of Federal Regulations on Water Providers The Need to Refurnish, Upgrade, and Build New Infrastructure Capital Requirements: How Cost-of-Service Rates and the Regulatory Process Are Vital to Raising New Capital 1:00 3 5:00 Class Cost-of-Service: Dividing the Total Revenue Requirement Jim Sarikas Functionalization Classification Allocation WEDNESDAY, MAY 13 8:00 3 12:00 Revenue Requirements and Cost-of-Service Problem Jim Sarikas 1:00 3 7:00 Trip to Santa Fe (optional) THURSDAY, MAY 14 8:00 3 12:00 Cost-Based Rate Design Alternatives: Tom McGuckin Introduction to Rate Design: Components of a Tariff and Criteria for a Sound Rate Design Metering Issues Determining Class Rate Elements: Commodity and Customer Charges Interruptible Rates/Load-Factor Rate Design 1:00 3 2:30 Water Conservation Rate Design Tom McGuckin Increasing Block Structures The Issue of Lifeline Rates Seasonal and Time-of-Use Rates 2:45 3 5:00 Water Utility Acquisitions Gary Shambaugh FRIDAY, MAY 15 8:30 3 9:30 Service Tariff Terms and Conditions Larry Blank 9:30 3 11:00 Step-by-Step Process and Procedures of a Rate Case: The Utility Application, Building the Written Record, Settlement vs. Contested Hearing, The Final Order and Procedures for Appeals PROGRAM OUTLINE Telecommunications Industry SUNDAY, MAY 10 6:30 3 8:00 p.m.<br><br> Registration and Reception MONDAY, MAY 11 INSTRUCTORS 8:00 3 9:00 Orientation and Overview of the Course 9:00 3 11:00 Telecommunications History & Current Industry Structure Larry Blank Communications Act of 1934 Policy and Regulation with Old Ma Bell How Competitive Pressures Instituted Policy Change The Break-up of AT&T The Telecommunications Act of 1996 (State Responsibilities) Recent Policy Issues The Industry Today 11:00 3 12:00 Networks and Technology Basics Larry Blank The Public Switched Telephone Network The Internet and Packet Switched Networks Wireless Networks 1:00 3 3:00 Networks and Technology Basics (continued) 3:15 3 4:00 Voice over Internet Protocol (VoIP) Larry Blank VoIP Categories and History 4:00 3 5:00 Introduction to State Telecommunications Regulation Larry Blank Regulated Carriers/Services Non-regulated Carriers/Services Wholesale vs. Retail Regulatory Functions TUESDAY, MAY 12 8:00 3 11:00 Tour of Qwest Facilities (Bus will depart at 8:15) 11:00 3 11:45 The State Regulatory Agency Gary Duncan Statutory Authority Administrative Rules Due Process Operations 1:00 3 2:45 Cost-of-Service Methods Duncan/Steele Revenue Requirements (Embedded or Historical Total Cost-of-Service Methods) Separation of Costs between Federal and State Jurisdictions Separation of Costs between Regulated and Unregulated Services Allocation of Costs among Regulated Local Services Total Service Long Run Incremental Cost (TSLRIC) Total Element Long Run Incremental Cost (TELRIC) Cost Proxy Models Avoided Cost-of-Service 3:00 3 4:00 Alternative Forms of Regulation Gary Duncan Traditional Rate-of-Return Regulation Price Regulation/Price Caps Revenue Sharing Profit Sharing Price Floors for Competitive Services 4:00 3 5:00 Why Tariffs and What 9s in a Tariff? Bill Steele Tariff filings Terms and Conditions Select Rules Service Rate Schedules WEDNESDAY, MAY 13 8:00 3 9:00 Service Quality Regulation Bill Steele Wholesale vs.<br><br> Retail Quality Measures Utilized Recourse for Below Standard Performance 9:00 3 10:00 Numbering Issues Duncan/Steele North American Numbering Plan Administration Number Pooling, Number Blocks, and Safety Valve Number Portability The Process of Adding an Area Code The Basics of E-911 Other N11 issues 10:15 3 1:00 Calling Area Issues & Intercarrier Compensation Gary Duncan Local Exchange Calling Area Wireless Calling Area/Major Trading Area Extended Area Service (EAS) 11:00 3 12:00 Interfacing Technology, Cost Methodology, and Pricing Bill Steele 1:00 3 7:00 pm Trip to Santa Fe (Optional) THURSDAY, MAY 14 8:00 3 9:45 Universal Service Funds Bonnie Lorang Federal Universal Service High Cost Program State Universal Service Programs Universal Service Funds Definitions Universal Service Funds Contributions Universal Service Funds Distribution Rural vs.Non-rural LECs 10:00 3 12:00 Universal Service Funds Eligible Bonnie Lorang Telecommunications Carriers (ETCs) Certification of Eligibility (ETC) Study Area Determination Incumbent and Competitive ETCs ETC Responsibilities FCC and State Oversight of ETCs Other FCC and State USF Responsibilities: Federal Low Income, Schools and Libraries, and Health Care Programs 1:00 3 3:00 Intercarrier Compensation Carey Roesel The Basis for Intercarrier Compensation Federal Access Charges Intrastate Access Charges Reciprocal Compensation Interconnection Agreements ISP Traffic Virtual NXX Issues Phantom Traffic Issues 3:15 3 5:00 Local Competition and State Regulation Joe Gillan Types of Local Competition Interconnection Agreements and Arbitrations Rural Exemption Waivers Wholesale Service Rates VoIP Policy, Competition, and Regulation Packet Interconnection FRIDAY, MAY 15 8:00 3 11:00 Bringing it all together on Telecommunications Joe Gillan Regulation Industry Structure & Technologies Retail Service Regulation Wholesale Service Regulation Universal Service Intercarrier Compensation Local Competition Broadband Initiatives Activities at the New FCC PROGRAM OUTLINE Natural Gas Industry: Interstate Pipelines SUNDAY, MAY 10 6:30 3 8:00 p.m.: Registration and Reception MONDAY, MAY 11 INSTRUCTORS 8:00 3 8:15 Welcome and Overview of Course David Smith 8:15 3 12:00 Overview of the Natural Gas Industry Technology David Smith Moving Gas from the Wellhead to the Burner Tip Segments and Players of the Natural Gas Industry Production Processing Transportation Storage Marketers Asset Management Marketing Hubs Retail Distribution Federal Jurisdiction The Federal Energy Regulatory Commission The Role of FERC Pipeline Services Regulated by FERC Pipeline Services Not Regulated by FERC How Have FERC Orders Altered the Structure of the Gas Industry? 1:00 3 5:00 The Legal Procedure Of Filing a Rate Case At The FERC Todd Piczak Types of Proceedings: Section 4 and 5 Cases Filing Requirements The cJust and Reasonable 9 Standard Section 7 Cases Filing Requirements The 8Public 8Interest 9 Standard Other Ratemaking Methods Used by the FERC Litigation v. Settlement Why are Most Rate Cases Settled at the FERC?<br><br> What are FERC cTop Sheets d? TUESDAY, MAY 12 8:00 3 12:00 FERC Requirements for Determining 8Just and Reasonable 9 Rates Johnson/Russell Overview of the 5 Steps Involved in Cost-of-Service Ratemaking Step 1: Establishing a Cost-of-Service Base Period vs. Test Period O&M/A&G Expenses Rate Base Rate of Return What should be included in the Test Period?<br><br> 1:00 3 5:00 Cost Of Service Problem Introduction of Cost of Service Problem Presentation of Group Solutions Review and Summary of Cost of Service WEDNESDAY, MAY 13 8:00 3 12:00 Step 2: Functionalization of Cost of Service Johnson/Russell Direct Assignment vs. Allocation Kansas-Nebraska ( cKN d) Methodology Step 3: Cost Classification Fixed vs. Variable Reservation vs.<br><br> Delivery Changes to Rate Design Policy over Time Impact of Load Factor 1:00 3 7:00 Trip to Santa Fe (Optional) THURSDAY, MAY 14 Johnson/Russell 8:00 3 5:00 Steps 4 & 5: Cost Allocation and Rate Design Allocation Factors and Billing Determinants Firm Rates Interruptible Rates Types of Cost-Based Rate Design Alternate Rate Design Methodologies Discount Adjustments Rate Design Problem Introduction of Rate Design Problem Presentation of Group Solutions Review and Summary of Rate Design Rate Design Proposals on the Horizon FRIDAY, MAY 15 8:30 3 10:00 What 9s Hot at the FERC Smead/Smith 10:00 3 11:00 Summing it All Up PROGRAM OUTLINE Natural Gas Industry: Local Distribution Companies SUNDAY, MAY 10 6:30 3 8:00 p.m. Registration and Reception MONDAY, MAY 11 INSTRUCTORS 8:00 3 8:15 Welcome and Overview of Course 8:15 3 12:00 Overview of the Natural Gas Industry Technology Moving Gas from the Wellhead to the Burner Tip Ken Jacobs Segments and Players of the Natural Gas Industry Federal and State Rate Regulation Federal Jurisdiction - The Federal Energy Regulatory Commission State Jurisdiction - State Regulatory Commissions Local Distribution Companies Role of the LDC LDCs and Pipelines LDCs and the FERC Gas Procurement Procuring Gas Interstate Pipeline Services Storage 1:00 3 3:00 Gas Cost Recovery PGA Recovery Automatic Adjustments Performance Based Rates Gas Cost Hedging Physical Hedges Financial Hedges 3:00 3 5:00 Key Issues Facing Gas Utilities and State Public Utility Ken Costello Financial Speculation in Natural Gas Regulatory Oversight of Gas Supply Planning and Procurement Recent Developments in Natural Gas Markets Outsourcing of Gas Utility Functions TUESDAY, MAY 12 8:00 3 12:00 The Process of Determining Revenue Requirements McFadden/Siwinski Rate Base, Expenses,Taxes, Depreciation and Net Operating Income Determining the Components of the Rate of Return The Test-Year, Adjusted Revenues at Present and Proposed Rates 1:00 3 5:00 Revenue Requirements or the Total Cost of Service Randi Aldridge Revenue Requirements Problem WEDNESDAY, MAY 13 Ed Gieseking 8:00 3 12:00 Assigning Costs to Various Customer Classes What is a Class Cost-of-Service Study? Steps Involved in a Class Cost-of-Service Study: Functionalization Classifying Allocation Class Cost-of-Service Problem 1:00 3 7:00 Trip to Santa Fe (optional) THURSDAY, MAY14 8:00 3 10:00 Cost-of-Service Study (Continued) Ed Gieseking 10:00 3 5:00 The Final Step :Rate Design-- Recovering Assigned Costs From Various Customer Classes Ray Blatter What is Rate Design?<br><br> Criteria Used to Determine Rates Components Found in a Tariff Types of Rate Designs Used by LDC 9s Today Rate Design Problem FRIDAY, MAY 15 (Combined Session for Gas and Electric) Larry Blank 9:30 3 11:00 Step-by-Step Process and Procedures of a Rate Case: The Utility Application, Building the Written Record, Settlement vs. Contested Hearing Procedures, The Final Order and Procedures for Appeals GENERAL INFORMATION LOCATION and HOTEL RESERVATIONS: The conference will be held at the Embassy Suites Uptown, 1000 Woodward Place NE, Albuquerque, NM. A block of rooms has been reserved at a special rate of $129.<br><br> To guarantee this rate, reservations must be received on or before April 9, 2009. Reservations can be made by calling 1-800-EMBASSY and mention Basics of Regulation or you can register online at www.embassysuites.com 3 Convention Code BAS. COST: The registration fee is $1095 for company representatives; $995 for center sponsors, state commissions and all other governmental entities.<br><br> The fee covers all instructional materials presented, the reception, transportation to Santa Fe, breakfast each morning, and coffee breaks. The fee does not include travel, hotel accommodations or meals other than those specified. CLE and CPE CREDIT: While NMSU does not apply to each state as a sponsor, CLE and CPE credits have been given by numerous states on an individual basis.<br><br> Each individual requesting CLE and CPE credits should contact their state board individually prior to the course and notify the CPU if there are special requirements. You will receive a certificate of completion for this course. REGISTRATION: MUST BE MADE IN ADVANCE.<br><br> To reserve a space, telephone 575-646-4876 or 575-646-3242, send a fax to 575-646-6025, e-mail to jeanewal@nmsu.edu, or mail your completed enrollment form to the address below. You will receive confirmation of your registration prior to the course. Payment by check or credit card with enrollment is preferred.<br><br> CANCELLATION POLICY: If notice is received more than five working days prior to the meeting, the tuition fee will be refunded in its entirety. Cancellations after that time are subject to a $100 service charge per person. No refunds will be made after the start of the program; however, tuition may be applied to future programs.<br><br> Substitutions can be made at any time. FOR MORE INFORMATION CONTACT: Center for Public Utilities MSC 3MPD, New Mexico State University, Box 30001, Las Cruces, NM 88003-8001, 575-646-4876 or 575-646-3242, Fax: 505-646-6025, E-Mail: jeawalte@nmsu.edu Web Site: http://business.nmsu.edu/programs-centers/cpu/ ENROLLMENT FORM - MAY 2009 Name_________________________________________________ Title__________________________________________________ Company____________________________________________ Address______________________________________________ City________________________________________________ State___________________ Zip________________________ Phone_____________________________________________ Fax___________________________________________________ Email__________________________________________________ Payment enclosed ______ Please Bill PO Number __________________________________ Credit Card _____ MC _____ Visa _____ Discover #__________________________________ Exp ______________ I will attend: Electric Course _____ Telecommunications Course _____ Natural Gas Course: LDC _____ Pipeline _____ Water Course _____ REGISTRATION FEE: $1095 for Energy, Telecommunications and Water Companies $995 for Center Sponsors, Commissions and All Governmental Entities Master Card, Visa, and Discover accepted by NMSU MAKE CHECK PAYABLE TO: New Mexico State University MAIL CHECK AND PAYMENT TO: Center for Public Utilities MSC-3MPD NMSU P.O. Box 30001 Las Cruces, NM 88003-8001 Center for Public Utilities MSC 3MPD New Mexico State University P.O.<br><br> Box 30001 Las Cruces, NM 88003 THE BASICS May 10-15, 2009 Embassy Suites Albuquerque, NM Practical Regulatory Training "or the Electric , Natural Gas , Telecommunications and Water Industries Five Separate Week-Long Courses Each Focused on the Specifc Needs o" its Respective Industry Topics Include: History, Technology, Costing and Pricing, Regulatory Procedures WHO SHOULD ATTEND Attendees with less than one year 9s experience in the regulatory arena and anyone wishing to obtain a basic understanding of the principles involved should attend this course. Commissioners, economists, rate analysts, accountants, attorneys, public information officers, administrative law judges, consultants, and consumer advocates will all benefit from the basic skills acq uired in this course. WHY EMPLOYEES SHOULD ATTEND THIS PROGRAM The issues confronting the Energy, Telecommunications and Water Industries can be very complex and confusing to the employee with newly acquired responsibilities in the area of regulation.<br><br> It is essential, therefore, for the employee not only to be abl e to understand these issues but also to be provided with an integrated framework that shows the interrelationships of the topics an d how they fit together. This course will give the attendees the analytical skills necessary to be more productive in this changi ng environment. FACULTY Randi Aldridge, Supervisor/Revenue Requirements, Southwest Gas Corporation Larry Blank, Economist, CPU, New Mexico State University Ray Blatter, Regulatory Supervisor, Pacific Gas and Electric Ken Costello, Principal, National Regulatory Research Institute Gary Duncan, Montana Public Service Commission Doug Gegax, Director, CPU, New Mexico State University Ed Gieseking, Director, Pricing and Tariffs, Southwest Gas Corporation Joe Gillan, President, Gillan Associates Ken Jacobs, Senior Specialist/Resource Planning, Southwest Gas Corporation Ben Johnson, Manager of Rates, TransCanada Pipeline Bonnie Lorang, General Manager, Montana Independent Telecommunications System Tom McGuckin, Economist, CPU, New Mexico State University Mike McFadden, McFadden Consulting, Inc.<br><br> Todd Piczak, Attorney at Law, Hogan and Hartsen LLP Carey Roesel, Vice President and Economist, TMI Consulting Scott Russell, Regulatory Analyst, TransCanada Pipeline John Roscher, Director, Rates & Regulatory Affairs, TransCanada Pipeline James Sarikas, Vice President, Foster Associates Tim Scanlon, Commercial & Federal Market Lead, Energy Efficiency Grant Siwinski, Manager of Safety and Quality Assurance, Public Utilities Commission of Nevada Gary D. Shambaugh, Principal and Director, AUS Consultants Rick Smead, Director, Navigant Consulting Inc. David Smith, Director Emeritus, CPU, New Mexico State University Bill Steele, Principal Financial Analyst, Colorado Public Utilities Commission<br><br>

less