Electric utility ratemaking conversation with industrial customers

Posted on: May 17, 2021

Industrial companies are highly impacted by utility costs. Our team works with many of these companies to administer competitive procurement processes for utility service and to help them engage in the processes that set rates and policies for years to come.

The Iowa Industrial Energy Group (IIEG) is a membership organization focused on creating a forum for Iowa’s industrial companies, legislators, and utilities to connect through their common interests in energy regulation and policy. Last month, our Stan Faryniarz and Shawn Kelly were invited to present to the IIEG on the topic of electric utility ratemaking. It was a great opportunity to discuss electricity rates and modern rate design with a group who is highly impacted by utility costs and strives to be the trusted and consolidated voice for industrial energy consumers in the state of Iowa.

“That was the perfect material and information for this group,” said Amanda James, Executive Director of the IIEG. “They have been asking for this topic for a couple years and it’s a complex subject – and you both have a terrific ability to break it down and make sense of it.”

Stan and Shawn’s presentation was a relatively high-level introduction to electricity utility ratemaking and specific industrial rates in Iowa. They touched on modern ratemaking reforms like future test years, performance-based rates, and multi-year rate plans and the impacts those modern designs might have on industrial energy users. Finally, they discussed appropriate ways to address utility cost recovery following natural disasters.

The video below provides an excerpt of the conversation, including the agenda, cost allocation, and modern ratemaking reforms. Disclaimer: Daymark came to this discussion as outsiders looking into what we have seen and researched within Iowa. We bring a perspective that is informed by our work across the U.S. and Canada. We do not make any particular value judgements or offer any advice.

For more on how industrial energy users can plan for and engage in the utility ratemaking process, please reach out to our team. We are looking forward to continuing the conversation,

Stan Faryniarz | Principal Consultant | sfaryniarz@daymarkea.com

Shawn Kelly | Senior Consultant | skelly@daymarkea.com