Main Street Gold Mine

Public Utilities Fortnightly 10/2010 "Last year Public Utilities Fortnightly noted that recession-related demand destruction was pressuring industry operating margins and financial returns in the electric industry and that conservation and environmental demand destruction were likely to continue that pressure for the foreseeable future. The author correctly concluded that "companies that aren’t earning their allowed return on equity (ROE) due to depressed energy sales are looking to regulators to make them whole. Going forward, rate treatment largely will determine who the winners will be"… more

Telephone Company Deferred Taxes

Public Utilities Fortnightly 9/1984 "The article identifies and discusses a capital loss incurred by Bell operating company ratepayers as a result of the divestiture and deregulation of accumulated deferred taxes and unamortized investment tax credits associated with customer premises equipment. It describes the coming confrontation between at least two state commissions, which have required these losses to be flowed back to ratepayers, and the Bell system, which has obtained an Internal Revenue Service ruling that threatens future benefits if the losses are flowed back… more

The Use of Customer Discount Rates

Proceedings of the 25th Annual Iowa State Regulatory Conference, 1986 "The issue I intend to explore today is the validity of the use of customer discount rates to evaluate revenue requirement comparison models. I will also consider the relationship between utility and customer discount rates. Finally, I will discuss some of the measurement problems in determining the level of the customers discount rate…. more

BOC Depreciation Issues in the States

NASUCA MID-YEAR MEETING, SANTA FE, NEW MEXICO JUNE 13-16, 1990 "The subject of my discussion is BOC Depreciation. I have been involved in several BOC Depreciation proceedings over the past six to seven years. My comments today reflect that experience, however, the primary basis of these comments is a recent Southern Bell of Florida case. That case covered just about all the BOC Depreciation issues of which I am aware. Furthermore, Southern Bell's motivations are no different than any other BOC. Therefore, the information obtained in the Florida case is relevant for all other BOC'S…. more

Impaired Assets Under SFAS No. 121

NASUCA 6/1996 "Under rate base rate-of-return regulation, depreciation is a noncash expense charged to operations and in turn passed on to ratepayers. The expense is normally calculated on a straight line basis, theoretically resulting in equal annual charges which are summarized in the accumulated depreciation account –the famous depreciation reserve. Consequently, as you may have heard, depreciation is a process of allocation –not valuation. SFAS No. 121, on the other hand, deals with valuation. The valuation concept involved is the unspeakable impairment loss…. more


The Regulatory Dilemma

National Association of Regulatory Utility Commissioners 101st Annual Convention and Regulatory Symposium "The subject of today’s discussion is the "Emerging Revenue Streams of Independent Telephone Companies" I would like to discuss the dilemma that I believe these emerging revenue streams create for regulators. Simply stated, the dilemma is that these streams for revenues can result in what appears to be a good economic decision from the companies’ standpoint, but a poor economic decision from the current ratepayers’ standpoint…. more

What's 'Sunk' Ain't Stranded

Public Utilities Fortnightly 4/1999 "IN THE DECEMBER ISSUE OF PUBLIC UTILITIES FORTNIGHTLY, author Eric Hirst presented a theoretical framework for analyzing the effects of future market prices on stranded-cost recovery. His approach addresses the uncertainty of "a priori estimates of stranded costs." He urges regulators to take a "going forward" approach. First examine how competitors behave. Then make sure that utilities operate their assets just as efficiently before locking in any estimates of stranded costs. The Hirst framework, however, also contains one potentially fatal flaw… more

Local Exchange Carrier Depreciation

"In 1980, the Federal Communications Commission changed its procedures and orientation with respect to the prescription of depreciation rates for telephone companies. This paper examines the effect of these changes on the depreciation reserve percentages of local exchange carriers… more

Rolling Over the Rate Payers

Public Utilities Fortnightly 11/2005 "State PUC should recognize a refundable regulatory liability for past charges to ratepayers… more


New Research

To Be Determined