COVID-19 - The Great Rate Debate

COVID-19 has created unique regulatory and recovery challenges.  COVID-19 has increased cost, decreased demand, increased uncollectable revenue, and for some utilities, delayed scheduled rate increases.  The majority of state regulators have approved some regulations to allow utilities to recover COVID-19 related costs and lost revenue. 

These challenges will lead to a mountain of new rate case filings this year, and next.  The rate cases will have to accurately assess COVID-19 load & revenue effects, increases in uncollectables, and generate new load and revenue forecasts.  All of this is necessary to understand “the new normal”.

These types of analyses are extremely data intensive requiring large data sets to be moved between different models in different applications.  Even with the simplest requirements, this could take weeks, even months.  When an underlying assumption is changed, the whole process may need to be redone, taking several months.  This limits the range of assumptions and ‘what-if’ scenarios that can be thoroughly analyzed when time is critical.

Combining load research and revenue modeling into a single big data application can provide utilities with greater and faster modeling capabilities to prepare for COVID related rate cases.  An Enterprise Rating Engine serves this purpose, providing granular load analysis and whole population rate analysis (WPRA).  WPRA calculates every customer’s bill on a new or proposed rate plan providing the net utility revenue change and the rate transition bill impact for each and every utility customer, increasing customer satisfaction.

With rate cases on the horizon, and multiple new factors needed for consideration, Utilities can employ Enterprise Rating Engine technology to perform robust analyses in a short period of time.