Day One
Registration and continental breakfast open at 8:30 a.m.
Session begins at 9:00 a.m.
Morning
The Regulatory Framework - Overview and Key Issues
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Cost of service, revenue requirements and rate cases |
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Computation of revenue requirements |
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Rate base and rate of return |
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Rate case issues in the current regulatory environment |
Capital Allocation and Economic Value Creation
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Net Present Value (NPV) vs. revenue requirements |
Understanding Financial Statements and Performing Risk Analysis
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Accounting vs. economic metrics |
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Essential ratios for measuring risk and performance: Interest coverage, fixed charge coverage, dividend payout, ROE, market value-to-EBITDA, ROTC |
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Impact of business risk and competition on financial ratios |
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Risk profile of utilities |
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Influence of unregulated activity |
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Impact of the current financial environment |
Determining Credit Ratings: A Case Study
Afternoon
Rate of Return and Value Creation: The Value Movement
Cost of Capital and Capital Structures
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Understanding risk and return in capital markets |
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Modern portfolio theory and asset pricing models |
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Cost of equity methodologies and illustrations |
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Practical applications illustrated through case study |
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Divisional cost of capital – unbundling risk and return across segments: generation vs. transmission vs. distribution |
Capital Structure Issues
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Appropriate capital structures in a restructured regulatory environment |
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Optimal capital structure simulation model |
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Double leverage |
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Case Study: Florida leverage formula |
Session ends at approximately 5:00 p.m.
Day Two
Continental breakfast opens at 8:00 a.m. Session begins at 8:30 a.m.
Morning
Utility Applications and Cutting Edge Techniques
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Contemporary rate of return techniques |
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The new performance metrics applied to utilities |
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Cutting edge techniques in capital allocation |
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Case studies |
Performance-Based Regulation: Alternatives to traditional ratemaking
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Focused vs. integrated rate of return incentives |
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Price cap regulation |
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Market basket ratemaking |
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Innovative rate mechanisms |
Afternoon
Performance-Based Regulation - Alternatives to traditional ratemaking (continued)
The Regulator's Perspective
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Key issues in the current economic environment |
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The financial capabilities that commissions are expecting from utilities now |
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How regulators judge value/performance metrics |
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The role of cost of capital issues |
Program concludes at approximately 4:00 p.m.
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