Cost Rate Studies
A Cost of Service Analysis (COSA) is a study that confirms the utility’s revenue requirement and its equitable allocation across the various customer classes of service. Output from the COSA was designed to facilitate the development of rate designs—that is, the electricity rates for the various classes of customers (residential, industrial, small commercial, etc.).
2018-2019 COSA | Rate Design Process
Risk Management Committee November 19, 2018 | BEC Red Lodge Office | 2:00 PM
Join us for an educational COSA & Rate Design discussion with consultant Gary Saleba, President, EES Consulting.
Risk Management Committee October 2018
Rate Design. The risk management meeting for October was the October 9 presentation Gail Tabone, Senior Associate at EES Consulting, gave to outline the Cost of Services Analysis (COSA) process BEC plans for 2019. We asked her to look at the context surrounding the COSA and some ground-level discussion of rate design analysis and what is happening in the industry relative to rate structure. Is the billing model changing from the traditional co-op billing for energy use, “base” expenses to cover some portion of the cost to operate the distribution system, and demand charges for some classes of customers? If change is happening, why and how widespread are the changes? How do we calculate financial and other impacts of changes accurately in a changing environment?
Tabone noted that the COSA analysis of existing customer classes and their payments to cover their shares of co-op revenue requirements does not necessarily fully address rate design analysis that looks at alternatives for how to establish classes and rate structures to best accomplish strategic goals.
EES Consulting President Gary Saleba will call into a risk management meeting on November 19 at 2:00 to further discuss rate design and related issues with the committee, board, staff, and members who elect to attend. We are forwarding Saleba comments stimulated by the Tabone presentation and he will be available for whatever time it takes to address issues and questions. His experience with companies throughout the industry provides insight about examples of change that has gone well, emerging concerns, creative response to the need for rate design change, strategic issues, best practices, information sources, etc.
An in-depth COSA was performed by EES Consulting in 2015 and updated in 2016.