Introduction to Utility Profitability
November 17 | Live Streaming Online
A BankWebinars.com Program
If you are unable to attend at the scheduled date and time, we make recordings available to all registrants for three business days after the event
The Introduction to Utility Profitability course will help attendees gain an appreciation for how utilities make money, manage assets, and financially operate. This interactive event will tackle the fundamentals of important finance, accounting, regulation, and billing concepts that all electric utility personnel should know, along with how business models have developed.
The agenda will kick off with a quick review of the electric utility model, then jump into details such as capital assets, O&M expenses, depreciation, rates, risks, balancing and trading, and more. Participants will have the opportunity throughout the program to discuss monetary concepts, unique methods that result in profitability, and how to respond financially to natural disasters and other emergencies. Everyone is also encouraged to come prepared with questions, discussion points, and personal challenges they may have faced in the past.
Learning Outcomes
- Review what is unique about how utilities make money, manage assets, and financially operate
- Compare and contrast the different organization models such as IOU, Muni, Co-op and Public, and explore the specific financial distinctions and responsibilities of each
- Examine how to differentiate between Capital Assets and O&M Expenses, depreciation and accelerated depreciation, rates, rate case and rate base, etc.
- Discuss the economic implications of vertical integration, deregulation, and decoupling
- Discuss stranded assets and how upcoming disruptive technologies and business models are changing the traditional model of a utility
- Analyze how utilities budget for and financially respond to natural disasters and other emergencies
- Decipher an electric bill, calculate the cost, and identify areas to save money
- Explore how financial resources are secured when a utility needs to invest in a capital asset
- Recognize why utilities are so risk adverse and learn methods to mitigate risk
- Identify the complexities of balancing and trading energy—how do different energy markets such as long-term, day-ahead and real-time balance a balancing authorities demand curve?
Agenda
FRIDAY, NOVEMBER 17, 2023
9:00 a.m. – 4:30 p.m. Central Time
History and Evolution of the Electric Utility Model
- How early privately owned local generation evolved into “the grid”
- How the “war of the currents” in the early 1900s developed the technology and financial model that largely remains in place today
- Benefits of electrical energy compared to the competition of alternative fuel sources and why it was adopted so quickly
- How the grid operates and is separated into generation, transmission, and distribution
- What does it mean to be vertically integrated?
- What is deregulation?
- How are utilities natural monopolies?
Utility Finance & Accounting
- What is unique about how utilities make money?
- How do utilities earn money using the ratemaking formula?
- When a utility invests in an asset where does that money come from?
- What are the primary forms of financing activities?
- Which costs are recovered in rates and which by shareholders?
- What is the difference between an above-the-line and below-the-line cost?
- Difference between Capital (Asset) and O&M (Expense)
- How does depreciation of capital assets work?
- What is accelerated depreciation?
- What are stranded assets?
- Why are utilities so risk averse?
- How do utilities financially prepare for natural disasters and other emergencies?
- What is decoupling?
Regulation
- How does a Public Utility Commission use a Rate Case process to set rates?
- What are the financial regulating entities governing a utility company?
- How does FERC regulate wholesale electricity and interstate commerce via transmission lines?
- What is an integrated resource plan?
- What is the difference between rate base, rate case and rates?
Economics
- What are the different energy markets such as long-term, day-ahead and real-time, and how do they balance a demand curve?
- What are the financial and resiliency benefits of microgrids and distributed energy resources?
- What are the responsibilities of a balancing authority?
- What is Direct Access, Energy Service Supplier, and Community Choice Aggregate?
- How are upcoming disruptive business models and technologies changing the traditional model of a utility?
Billing
- The different components of a residential and commercial bill
- Why utilities charge for Energy (kWh) and how it is different than Power (kW)
- How smart meters work
- How to simply calculate the cost of electricity for anything
- What is a plug logger and how can it identify areas to save money?
Course Recap and Other Topics of Interest from the Participants
Instructor
Brent Olsen, President, 3 Phase Consulting
Brent has 25+ years of experience working for large electric utilities including Arizona Public Service, Salt River Project, and Portland General Electric. He has worked in distribution, transmission and generation engineering and is currently a Project Manager for Specialized Energy Operations where he manages the installation of generation facilities, microgrids, distributed energy resources, and various grid edge research and development projects. He leads a user group of utility professionals who follow and discuss business and technological changes in the electric utilities industry.
Brent is an electrical engineer specializing in utility power systems with a master’s in Energy Policy and Management and an MBA. He is also a PMP, has a degree in Spanish and is the two-time winner of PGE’s Project Manager and Project of the Year awards.