Utility Investment Review

Decisions about utility investments often involve tiny details that can swing the financial outlook by millions, or even hundreds of millions of dollars. We provide our clients with insight into those details, and their consequences, to improve the outcome of planning processes and help protect ratepayers from overpaying for their energy.

Drayton Point Coal Plant Cooling Towers


Synapse investigates the appropriateness of proposed utility resource acquisitions and investments, whether it’s a new power plant, smart meters, or other ratepayer-funded investment. We assess these proposed investments to ensure they are cost-effective, achieve state energy policy goals, and are in the public interest. We apply our analyses in a variety of regulatory proceedings, including:

  • Resource planning dockets 
  • Rate cases 
  • Pre-approval investigations
  • Certificate of public convenience and necessity (CPCN) cases, 
  • Fuel cost and power supply cases, and
  • Environmental rider dockets.

Review of Potential New Utility Resources

In preapproval and planning contexts, Synapse examines projections of long-range costs and benefits and risks of proposed resources, emphasizing consideration of a full range of alternatives. We assess the proposed project’s compliance with current and likely future environmental regulations and evaluate stranded asset risk. Much of this work entails providing expert testimony and analysis for clients in Certificate of Public Convenience and Necessity proceedings where new resources or environmental projects are formally proposed in the context of resource planning processes. 

For more information, see our Resource Planning and Renewables and Legacy Power Plants pages.

Review of Existing Utility Resources

In cost recovery contexts, Synapse supports clients in evaluating whether regulated utility costs are “prudent” and “used and useful,” consistent with traditional ratemaking principles. We support clients by providing testimony and analysis in a range of litigated dockets including:

  • Electric utility rate cases where a company might seek to place new assets and projects into its rate base, 
  • Environmental rider dockets where companies seek to recover the costs associated with specific environmental projects, and
  •  Fuel cost and power purchase dockets where costs associated with long-term power purchase agreements and contracts are recovered

Our testimony and analysis focus on the following:

  • Prudence of the investment based on company knowledge at the time of investment decision
  • Reasonableness of a company’s risk assessment when making an investment decision
  • Assessment of the value the asset has provided to ratepayers 
  • Evaluation of the oversight a company has exercised over the operation and maintenance of an asset to ensure all costs incurred to operate and maintain the plant are prudently incurred (relevant for both utility-owned assets and power purchased under contract from specific assets)
  • Review of whether the utility properly evaluated the cost and risk associated with entering into a long-term power contract
  • Review of whether the utility has accurately evaluated the cost to retire a plant or terminate a contract relative to the cost of alternatives

Review of Grid Modernization Plans

Utilities are faced with an increasingly complex array of new technologies and practices to modernize their grids and make them more efficient, reliable, and resilient. Synapse participates in grid modernization dockets to determine which investments will provide net benefits to customers and be in the public interest. Our staff conducts economic, technical, and engineering assessments of grid modernization investments, including costs associated with preparation for and response to natural disasters and other major threats to electric and gas utilities.

Review of Distributed Energy Resources

Distributed energy resources represent an increasingly large portion of utility investments. Synapse frequently participates in dockets to investigate the value of utility investments in DERs. These include regulatory investigations into: 

  • Cost-effectiveness of energy efficiency and demand response programs, 
  • Costs and benefits of distributed generation mechanisms including (roof-top solar),
  • Potential impacts of distributed storage resources, and 
  • Utility and customer implications of utility investments in electric vehicle infrastructure. 
  • Our work includes reviewing utility DER studies, conducting independent analysis of DER cost-effectiveness, conducting avoided cost and value-of-solar studies, and both prospective and retrospective analysis of DERs.

Benefit-Cost Analysis

Sound benefit-cost analysis (BCA) practices represent the core of our approach to evaluating utility investments and resources. Synapse is a national leader in developing principles and practices for how to conduct BCAs when reviewing utility investments. Our approach combines economic theory with critical regulatory perspectives to ensure that BCAs of utility investments are:

  • Comprehensive and transparent,
  • Identify utility investments and resources that are cost-effective,
  • Protect customers, and
  • Achieve energy policy goals