- Industry: Energy & Utilities
Regulators increasingly emphasize upgrades that involve smart grids, clean energy standards, energy efficiency, customer choice, and transmission system improvements—and they are eager to see evidence of the benefits. Consider:
- Has your utility recently undergone or considering a smart meter deployment or other project involving large, multi-year capital expenses?
- Are you facing pressure from regulators, communities, and customers to report metrics on customer benefits resulting from utility investments?
- Are you facing heightened regulatory scrutiny related to smart-meter data analytics techniques?
- Do you measure performance toward meeting environmental targets?
- Do you have opportunities to couple cost-of-service regulation with performance-based ratemaking (PBR)?
The traditional regulatory ratemaking model, based on a cost-of service rate-of-return methodology, does not support the evolving environment that favors advanced metering infrastructure (AMI)/smart-grid technologies and customer choice.
If your utility operates in a state with performance-based models and is required to report on certain metrics or if you anticipate a project involving multi-year capital investments and want to circulate new PBR regulatory models with state PUCs and local city councils, we can help.Guided by deep regulatory experience
Applying deep utility management and regulatory experience, West Monroe Partners develops performance management approaches tailored to today’s environment. Our experienced team will help you synchronize your utility’s long-term regulatory and business strategies and integrate appropriate performance metrics and key performance indicators (KPIs)—including:
- Designing metrics and KPIs to measure performance across utility operations
- Setting incremental revenue requirements and cost recovery baselines
- Establishing a “sharing mechanism” to distribute benefits among ratepayers and shareholders
- Developing a regulatory strategy to gain regulators’ acceptance for the performance-based ratemaking methodology
- Testifying and defending entire PBR strategies and programs
With experience that spans an array of investor-owned and public power utilities, we understand the diverse regulatory models in use across states and local jurisdictions.Capture and communicate the benefits
A fresh look at your performance management approach and metrics can help your utility strengthen compliance, reduce uncertainty about investment return, and begin to tell a more compelling story about how current or planned investments benefit customers, control or lower costs, and deliver value to grid operations. That’s business in the right direction.