Podcast Interview: The Mechanics of Investor-Owned Utility Rate Cases

Gary VerDouw, a former American Water employee and now an independent rate and regulatory consultant, discusses the often misunderstood process of setting rates for investor-owned water utilities. Gary has tremendous experience having worked on investor-owned water utilities in multiple jurisdictions and having testified on rate cases before no less than seven public utility commissions. Gary does a tremendous job filling you in on the how, what, why and where of investor-owned water utility rates.

In this session, you’ll learn about:

• How investor-owned utilities set rates differently than municipal utilities

• What are the four numbers required to set investor-owned utility rates

• Where the real fight usually is in investor-owned utility rate cases

• How an investor-owned utility’s rate base is determined

• How cost of common equity is determined

• How the weighted cost of capital is determined

• What is an investor-owned utility’s net operating income

• How net operating income is calculated

• What single tariff pricing is and why it’s beneficial