Online Learning: Learning Paths

Ratemaking for Co-ops

Length: 1.5 hours
Subscription: 2 months - 12 months
Cost: $295 - $350
Prerequisites: None

This course covers the principles behind ratemaking for co-ops including key concepts, determination of revenues that must be collected to ensure financial stability, methods for allocating revenues between customer classes, design of rate structures to fulfill the co-ops rate principles, calculation and implementation of new rates, and evolution of ratemaking with changes in the electricity industry.

This course comprises the following modules:

  • Introduction to Ratemaking
  • Determining the Revenue Requirement
  • Allocating the Revenue Requirement
  • Determining Rate Design
  • Calculating and Implementing New Rates
  • Evolution of Ratemaking

Following is a more detailed outline of content contained in the Ratemaking for Co-ops online course.

Introduction to Ratemaking

  • What ratemaking is and what it does
  • Why ratemaking is fundamental to a co-op's financial stability and consumer-member satisfaction
  • Who regulates rates for co-ops
  • Principles behind setting rates
  • The concept of cost-of-service ratemaking
  • How rates relate to a co-op's financial objectives
  • Non-financial considerations for rates
  • The ratemaking process
  • When and how new rates are initiated
  • How proposed rates are analyzed
  • Timing for developing and implementing new rates

Determining the Revenue Requirement

  • What the revenue requirement is
  • How actual revenues relate to the revenue requirement
  • Steps in determining the revenue requirement
  • The project team
  • Selecting a test year
  • Collecting data
  • Determining appropriate adjustments to test year data
  • The margin requirement and achieving financial goals
  • Calculating the revenue requirement
  • Reviewing a proposed revenue requirement

Allocating the Revenue Requirement

  • What revenue allocation is
  • The cost-of-service study
  • Steps in the cost-of-service process
  • Defining customer classes
  • The cost allocation process
  • Functionalizing costs
  • Classifying costs
  • Determining an appropriate margin
  • Developing allocation factors
  • Implementing revenue allocation to determine each class's revenue

Determining Rate Design

  • What rate design is
  • The steps in the rate design process
  • Balancing the various rate principles
  • Determining cost causation
  • Determining customer classes
  • Technology impacts on ratemaking
  • Determining charge types and structures for each customer class
  • Determining other charges and fees
  • Determining payments for DER services
  • Allocating revenue to each charge type

Calculating and Implementing Rates

  • The steps in the rate calculation process
  • Determining rate impacts
  • Setting a rate implementation plan
  • Communicating rate changes
  • Helping consumer-members manage rate impacts
  • Monitoring newly implemented rates

Evolution of Ratemaking

  • Ongoing monitoring of rates
  • The electric industry evolution
  • Potential new co-op services
  • How industry evolution impacts a co-op's rate practices
  • Rate design innovations
  • Adapting to continual change

Contact us at 866-765-5432 or e-mail for more information.

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