Knowledge is Power: Understanding Rates and Cost of Service Seminar

IN-PERSON Seminar

Explore the practical side of cooperative cost recovery and rate designs with us. The pressure on cooperative costs directly affects members, prompting you to regularly consider alternatives to rate adjustments. It’s crucial to grasp the various factors influencing your cooperative’s revenue needs and find effective ways to recover costs.

Tap into the expertise you need—this seminar offers invaluable insights from seasoned professionals at Guernsey. We have been serving electric cooperatives for more than 80 years and currently support nearly one-third of the nation’s cooperatives.

WHY YOU SHOULD ATTEND:

· Get a straightforward walk through of the cost of service and rate design process

· Understand the merits of common and not-so common rate designs

· Make your Cost of Service Study work for you

· Feel confident discussing rates with your members

· Engage in valuable networking with industry peers

· Benefit from interactive, instructor-led discussions that explore real-world experiences of attendees

· Receive more in-depth training with hands-on learning

· Take home a comprehensive class reference notebook with organized materials for easy future use

September 24, 2025, 8:15 a.m. - 4 p.m. CST
September 25, 2025, 8:15 a.m. - noon CST
(Cost per attendee includes both days)

For additional information, contact dGFyYSAhIGhpcnJpbGwgfCBndWVybnNleSAhIHVz or call 405.416.8153

Speakers:
Rebecca Payne, VP, Managing Consultant at Guernsey

Justin Proctor, VP, Managing Consultant at Guernsey

Josh Dan, CPA, MBA, Rate Analyst at Guernsey

Info: Module 1

» What is the Cost of Service process?

» Understanding accounting principles in the Cost of Service

» How to establish the appropriate Revenue Requirement: How much margin is needed?

• Financial Ratios

• Cash General Funds

• Equity

• Capital Credit Retirements


Module 2

» How much margin will we have?

» Test Year versus Adjusted Test Year

» What is the Adjusted Test Year?

• What’s changing?

• Sales?

• Payroll and Benefits?

• Weather?

• Other?


Module 3

» Evaluate the Identified Revenue Requirement

• Does the margin cover expenses?

• Does the margin achieve financial goals and objectives?


Module 4

» How are costs incurred?

• Distribution system costs versus power costs

• Fixed costs versus variable costs

• Number of customers

• Load requirements

• Energy requirements


Module 5

» Cost of Service summary

• How much does it cost to serve each rate class?

• How much does it cost to serve each consumer in a rate class?

Info: Module 7

» Cost Based Rate Design

• Customer Component

• Power Supply Capacity and Delivery

• Distribution (wires) Capacity

• Distribution (wires) Customer

• Customer Accounting and Customer Services


Module 8

» Rate Trends

• Time of Use and Interruptible Rates

• Residential Three-Part Rates

• Electric Vehicle

» Adjustment Clauses for cost recovery

• Examples: Power Cost, Fuel Cost, Interest/TIER

• Pros and Cons


Module 9

» Special consideration of Contract Rates for Industrial Loads

» Using the Cost of Service to determine Line Extension Allowable Investment

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