Finding Investment Headroom in a Rising Retail Rate Environment
Many US utilities will need to significantly increase their retail electric rates over the next ten years to fund capital investment programs in a low load growth environment. If utility executives want to avoid the perception that they are “gold-plating” their systems, they will need to understand how their spending decisions will impact retail rates relative to their peers.
- The earnings and shareholder value risks that utilities are facing from rising retail rates and how rate growth should be factored into capital allocation decisions.
- Recent projects where CRA conducted peer utility rates review and other analysis to support strategy and capital investment plans.
- CRA's Peer Electric Rates Forecasting Model – a bottom-up cost of service model that projects electric retail rates for all utilities in the US based on public forecasts and expert opinions regarding load growth, CapEx, and O&M, and more.