Utility Regulation & Ratemaking
Utility regulation is different in every state and province, but good, time-tested regulatory and ratemaking principles don't change. We bring balanced analysis to facilitate utility regulation that protects customers and supports each jurisdiction’s policy goals.
Overview
Effective regulation of electric, gas, and water utilities is essential to protect customers and advance the public interest. Synapse provides independent analysis of utility infrastructure plans and programs, including their costs, benefits, and impacts on customers. We advise regulators and stakeholders on rate design and regulatory frameworks, including performance-based regulation and other alternatives to traditional cost-of-service regulation. As states plan for decarbonization, we also help assess the future role, costs, and regulation of gas utilities, with attention to affordability, reliability, and an equitable transition.
Utility Investment Review
Synapse reviews proposed and existing utility investments to determine whether they align with the public interest. Clients hire us to participate in resource planning dockets, rate cases, and other proceedings to support prudent and cost-effective use of ratepayer money that aligns with the jurisdiction’s policy goals.
Alternative Regulation
Regulators have an evolving set of regulatory tools available to ensure utilities have appropriate incentives to align utility planning and operation with the public interest. Synapse helps design and review alternative regulation frameworks such as multi-year rate plans, performance-based regulation, and performance incentive mechanisms.
Future of Gas
As more and more jurisdictions enact policies to decarbonize energy use, the question of what happens to gas distribution utilities and their customers looms larger. Synapse is assisting various states and other regulatory jurisdictions grapple with this challenge in a way that minimizes risk for gas customers.
Rate Design & Cost Allocation
Synapse provides expertise in cost allocation and rate design to meet the changing needs of the electric, gas, and water sectors. We review rate proposals to determine whether they reflect cost causation, align with the timing and nature of system costs, and satisfy widely-accepted rate design principles. We also assess the reasonableness of cost allocation methodologies to ensure that costs are allocated fairly across classes.
Cost of Capital and Rate of Return
One controversial part of a utility’s rate case is the requested rate of return, which represents a large share of customers’ bills. Synapse provides expert analysis and testimony that evaluate the utility’s proposed rate of return – including allowable return on equity, cost of debt, and capital structure – and develops our own recommendation with the interest of customers in mind.
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