Regulatory Rates interview prep.

Behavioural questions to expect

1. Walk me through your background + utility regulatory experience.
2. Tell me about a rate case or regulatory filing you've worked on.
3. Why regulatory + rates vs other utility paths (planning, operations, finance, M&A)?
4. Why the utility side - vs PUC staff, consumer advocate, or consulting?
5. Why the firm?
6. What's your read on our last general rate case + pending dockets?
7. Tell me what you understand about our regulatory frontier - decoupling, PBR, performance metrics.
8. Walk me through how you'd build a revenue requirement for a general rate case.

Technical concepts to master

• Rate base + ROR + ROE

  Rate base + prudence · CWIP vs AFUDC · Capital structure + double leverage · ROE methodologies - DCF + CAPM + risk premium · ADIT + tax reform

• Class cost-of-service + rate design

  Functionalisation · Classification · Allocation methods · Parity ratios + gradualism · Rate design - fixed + volumetric + demand + TOU

• FERC vs state jurisdiction + formula rates

  Jurisdictional split · Formula rate vs stated rate · Order 1000 + 890 · Transmission incentives + Order 679 · MISO / PJM / SPP / CAISO / NYISO / ISO-NE / ERCOT

• Regulatory frontier - decoupling + PBR + riders + IRP

  Revenue decoupling · Performance-Based Ratemaking (PBR) · Riders + adjustment clauses · Integrated Resource Plan (IRP) · Certificate of Public Convenience + Necessity (CPCN)

Practical drills

• A vertically-integrated utility files a GRC with rate base of $4.0B, requested capital structure 50% equity / 50% debt, ROE 10.0%, cost of debt 4.5%, O&M of $350M, depreciation of $200M, amortisations of $30M, taxes of $180M, other revenues of $80M, and present-rate revenues of $1.05B. Build the revenue requirement + revenue deficiency.
• A utility has revenue requirement of $1.0B. Three classes: residential (4.5B kWh, 1.2M customers, NCP 1.8 GW), commercial (3.0B kWh, 150k customers, NCP 1.0 GW), industrial (2.5B kWh, 5k customers, NCP 0.8 GW). Class allocations from a 12CP demand / kWh energy / weighted-customer study come back: residential cost-of-service $480M, commercial $310M, industrial $210M. Current revenues: residential $510M, commercial $290M, industrial $200M. Walk through class parity + rate design.
• Your utility has filed a $150M GRC with 10.25% ROE, $2.0B incremental rate base, a grid-mod tracker, and a new electrification tariff. PUC staff proposes $90M with 9.5% ROE. Consumer advocate proposes $60M with 9.25% ROE + opposes the tracker. Large-industrial group proposes class-shift toward residential. Environmental intervenors support electrification but want performance metrics tied to it. Walk through your settlement strategy.

Smart-question anchors

• Last GRC outcome + pending dockets - requested vs approved, ROE, rate base treatment
• Capital plan + recovery strategy - test year, riders, formula rates, securitisation
• Regulatory frontier - decoupling, PBR, multi-year rate plans, performance metrics
• Stakeholder map + culture - PUC staff posture, consumer advocate, large customers, environmental
• IRP + CPCN + resource adequacy - capacity needs, renewable + storage build, retirement schedules

Sourced from

NARUC Manual on Cost Allocation + Rate Design (Bonbright reference) · FERC Federal Power Act regulations + Order 890 / Order 1000 / Order 679 · EEI Rate Case Summary + state PUC docket archives · RAP (Regulatory Assistance Project) + LBNL + ACEEE policy briefs · Major utility 10-K MD&A regulatory sections + rating agency utility reports