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					                         euCI Presents a Conference on:

                         The ArT of fuTure
                         rATe CAses
                         october 2-3, 2008    •   The Westin O’Hare   •   Chicago, Illinois




       Pre Conference Workshop
       Cost of service
       oCTober 1, 2008



       Featured Presentations by:
       Illinois Commerce Commission
       utah Public service Commission
       baltimore Gas & electric Company
       Centerpoint energy
       Duke energy
       Georgia Power
       southern California edison
       Tennessee Valley Authority
       Xcel energy
       Morgan stanley
       Christensen Associates energy Consulting
       scottMadden


       Co-Sponsors



                                                                          EUCI is authorized
                                                                          by IACET to offer up
                                                                          to 1.3 CEUs for this
                                                                          program.


photo by: Rick Aiello
The ArT of fuTure
rATe CAses
october 2-3, 2008



  OVERVIEW
  In the 1990s and at the turn of the new millennium, most utilities were able to put off rate case filings due to many
  factors, including significant earnings contributions from their unregulated subsidiaries and by deferring capital
  investments on the regulated side of the business for as long as possible. But utilities can no longer put off significant
  investments in new capacity, infrastructure replacement, and environmental upgrades.

  Survey results show that return on equity (ROE) is still one of the most controversial issues in a case. Recent authorized
  returns are more than 50 basis points below rates in the mid to late 1990s. An anticipated revenue stream could quickly
  become a revenue shortfall if the approved rate of return is substantially decreased from its current level. In addition, the
  uncertainties around the potential treatment by state regulators of new rate base additions remain a concern.

  The current regulatory environment makes the filing of new rate cases more complex than ever before. The confluence
  of the run-ups in fuel costs and the expiration of rate caps have caused some jurisdictions to rethink retail electric
  choice. But some utilities seem to be taking all of this in stride. Wall Street analysts have identified the “premium”
  utilities and those with constructive regulatory frameworks and strong financial performance. How are these companies
  navigating today’s difficult regulatory waters?

  Other popular themes today include energy efficiency and conservation. How can companies inter-weave demand
  response and company earnings targets into a cohesive regulatory strategy? What are some of the more innovative
  programs and tariffs now being offered by some utilities? In addition, many utilities are now moving towards non-
  traditional rate recovery mechanisms. A variety of approaches are being considered – we’ll talk about some of the
  more successful programs and how rate design is changing. Formula-based rates, cost trackers and riders for renewable
  energy, conservation programs, and new transmission investments are becoming more prevalent.

  This conference is intended to review some of the current issues and critical success factors involved in preparing a rate
  case today. It is also supported by case study experiences and will include open panel discussion sessions to encourage
  participants to ask candid questions about strategies, experiences, and what the future holds for regulation and
  successful rate case development.



                                                                                                     WHO SHOUlD
      WHAT YOU WIll lEARn                                                                            ATTEnD
      The conference will identify the current issues and critical success factors in-               This conference is suited
      volved in preparing a rate case. The speakers and panelists will:                              to commissioners, com-
      • Review the potential impacts of significant investments in new capacity,                     mission staff, regulatory
          infrastructure replacement, and environmental upgrades                                     affairs managers, rate
      • Analyze the gathering storm clouds. Are skyrocketing rates inevitable? How can               case managers, legal
          companies mitigate or hedge their exposure?                                                counsel, cost of service
      • Evaluate how future rate cases can enhance access to capital markets rates                   analysts, load research
          of return                                                                                  specialists, rate designers,
      • Examine how premium utilities (those with constructive regulatory                            financial analysts, accoun-
          frameworks and strong financial performance) are dealing with these                        tants, those responsible
          changes                                                                                    for setting regulatory
      • Discuss non-traditional rate recovery mechanisms – formula-based rates,                      strategy, for communicat-
          performance-based rates, cost trackers and riders, etc.                                    ing a clear understanding
      • Identify the regulatory governance options for the future                                    of rate case proceedings,
      • Analyze how future rate cases can address stakeholder concerns and other                     and those overseeing the
          political issues                                                                           rate case development
                                                                                                     process.




                                                         register Today! Call 303-770-8800 or visit www.euci.com
                                                                                                                                    2
The ArT of fuTure
rATe CAses
october 2-3, 2008

                                  January 24 – 25, 2008
  PROgRAm AgEnDA                    Program Agenda
  ThursDAY, oCTober 2, 2008

  8:00 – 8:30 a.m.      registration and Continental breakfast


  8:30 – 8:45 a.m.      Introduction and overview of the Day
                        Conference Co-Chairs:
                        Michael O’Sheasy, Vice President, Christensen Associates Energy Consulting
                        Rick Starkweather, Partner, ScottMadden

  8:45 – 10:15 a.m.     session I
                        regulatory Governance options for the future – The Impact of rising Costs and Changing
                        Attitudes
                        With pressure to stabilize or cap rates, how does a utility make the case for base rate increases
                        to cover rising costs and/or for adopting and funding new emerging infrastructure technologies?
                        How does this differ when supply and delivery system upgrades are needed just to keep the lights
                        on? How can utilities today address the gathering storm clouds – where the costs of inputs used
                        by electric utilities have risen significantly, generating and transmission capacity are becoming
                        further constrained, and another wave of environmental compliance is imminent – and still meet
                        the needs of regulators?

                        rising Costs and Their Implications – one regulator’s Perspective
                          • Where we are today, i.e., higher fossil fuel prices, inertia in new generation due to cost
                             allocation and carbon tax issues
                          • Why rate design still matters, e.g., dynamic pricing in the face of increasing demand and
                             increasing prices
                          • Straight/fixed variable and decoupling issues for utility revenue stability
                          • Why markets matter, how/why regulated retail rates interact with wholesale market prices,
                             and how renewable energy credits can fit into the mix

                          Sherman Elliott, Commissioner, Illinois Commerce Commission

                        A Commissioner’s Perspective on future rate Cases
                         • Utah’s regulatory governance structure
                            o Traditional rate of return regulation
                            o Vertically integrated electric utility with multi-state loads and resources and a natural gas
                              distribution company that is part of a vertically integrated company
                            o Integrated resource planning (electric and natural gas)
                         • Regulatory challenges:
                            o Expanding loads, increasing capital expenditures, rising capital and fuel costs
                            o Uncertainty regarding carbon emissions, nukes, and clean coal
                            o Increased reliance on natural gas as fuel
                            o more frequent rate cases
                            o low income considerations
                         • Emerging issues:
                            o PCAms, decoupling, integrated resource planning, demand-side management, rate
                              design, weather normalization, gas interchangeability
                         • Hot rate case issues
                            o Test year – historic or forecast?         o Credit rating agencies
                            o Capital structure and rate of             o Rate design/tariff structures
                               return (especially in a forecast         o Reliability
                               test year), cost of capital              o Capital expenditures
                               modeling                                 o Fuel cost projections
                            o Effect of technology-AmR, on-             o Renewable integration charges
                               line payments, smart metering            o Customers’ changing behaviors
                            o multi-state utilities                     o RpS

                          Ted Boyer, Commissioner, Utah Public Service Commission

                                                     register Today! Call 303-770-8800 or visit www.euci.com
  Agenda Continued on Next Page                                                                                               3
The ArT of fuTure
rATe CAses
october 2-3, 2008



  PROgRAm AgEnDA
  ThursDAY, oCTober 2, 2008 (COnTInUED)                                                                About euCI

  10:15 – 10:30 a.m.       Morning break                                                           EUCI is a leading
                                                                                                   provider of
  10:30 a.m. – 12:30 p.m. session II
                          how future rate Cases Can enhance Access to Capital and                  conferences,
                          better Manage rates of return                                            seminars, workshops
                          This session will provide insights into one of the main driving          and courses
                          issues in the electric utility/power supply industry for the next 5      designed exclusively
                          to 10 years. Significant generation capacity and infrastructure          for the energy
                          expansion/replacement programs are underway in many                      industry. We seek
                          states. Forecasted capital budgets exceed the current market             to create a forum
                          capitalization for many utilities. How can utilities solicit favorable   for professional
                          terms and responses from the investment community and from               communication and
                          regulators?                                                              exchange knowledge
                                                                                                   and ideas among
                           The View from Wall street
                            • Wall Street’s role in this emerging environment of supply            energy industry
                               shortages coupled with uncertainties around expansion/              professionals and
                               replacement investments                                             others interested in
                            • Expected impacts to capital availability and costs                   the industry.
                            • Suggested utility/regulatory strategies to cope
                                                                                                   Join the thousands
                           Alex Tolstykh, Executive Director, Morgan Stanley Commodities           of others who have
                                                                                                   attended our events
                           how Will utilities Pay for All of This, in Light of Potential           since 1987 and
                           Issues/Concerns from the Capital Markets?                               see why they keep
                             • Potential competitive (merchant) responses to supply
                                                                                                   coming back.
                                shortages
                             • Impact on lender terms and conditions for different types of
                                projects
                             • Specific strategies for utilities

                           James Sheffield, Formerly Vice President, Morgan Stanley

                           Premium utilities – What are they Doing Differently?
                            • Regulatory actions have returned to center stage for Wall
                               Street analysts
                            • Some utilities have received favorable investor status –
                               what are they doing differently?
                            • Strategies/tactics/actions that are already working well

                             Jason Davis, Director, ScottMadden

  12:30 – 1:30 p.m.        Group Luncheon




                                                         register Today! Call 303-770-8800 or visit www.euci.com
  Agenda Continued on Next Page                                                                                           4
The ArT of fuTure
rATe CAses
october 2-3, 2008



  PROgRAm AgEnDA
  ThursDAY, oCTober 2, 2008 (COnTInUED)                                                          sponsorship
                                                                                                opportunities
  1:30 – 3:45 p.m.      session III
                        A Powerful Issue for the future rate Case – the Push for
                                                                                               Do you want to
                        Demand response, energy efficiency, and Conservation
                        Using the Smart grid to integrate demand response and                  meet this powerful
                        energy efficiency improvements into traditional supply /               audience to drive
                        delivery planning and operations. When adopting new smart              new business?
                        infrastructure technologies that support integrated resource
                        portfolios using both supply and market-side options, what             For sponsors and
                        should be captured in rate base versus incurred directly by            exhibitors, this means
                        the customer? How does this affect traditional utility revenue         an unparalleled
                        requirements, cost of service (i.e., cost causation and allocation),   opportunity to raise
                        modeling, and practices?                                               your profile before
                                                                                               a manageable
                                                                                               group of executives
                          • how Traditional utility rate Making Approaches and                 who make the key
                            Practices Will have to Change in order to Incorporate
                                                                                               purchasing decisions
                            smart Grid Technologies
                            o How revenue requirements, cost of service, and other             for their businesses.
                              rate setting activities can be changed to result in              There are a wide
                              equitable cost recovery                                          range of sponsorship
                            o How future rate designs can incorporate and reflect              packages available
                              market signals, market-side benefits, savings, and               which can be
                              incentive mechanisms that appropriately influence retail         customized to fit
                              end-use behaviors and choices                                    your budget and
                            o How future regulatory mechanisms can facilitate a                marketing objectives,
                              more collaborative process between the utility and their         including:
                              commission, communities, and stakeholders
                                                                                               • Cocktail Reception
                         Paul Moran, Director, Strategic Planning & Analysis,
                           Centerpoint Energy, Inc.                                              Host
                         Matt Smith, Director, Utility of the Future, Duke Energy Corp.        • lanyard Sponsor
                         Russell Garwacki, Manager, Pricing Design and Research,               • networking Break
                           Southern California Edison                                            Host
                         Moderator: C. Scott Wilson, Director, ScottMadden                     • luncheon Host
                                                                                               • Table Top Exhibits
  3:45 – 4:00 p.m.      Afternoon break                                                        • Breakfast Host

  4:00 – 5:00 p.m.      session IV                                                             Please contact
                        Panel Discussion
                                                                                               Raj mrig,
                         • Comparing and contrasting the differences in current rate
                            case development and what the panelists expect to see in           303–770–8800×251
                            the future                                                         or rmrig@euci.com
                                                                                               for more information.
  5:00 – 6:00 p.m.      Networking reception




                                                      register Today! Call 303-770-8800 or visit www.euci.com
  Agenda Continued on Next Page                                                                                         5
The ArT of fuTure
rATe CAses
october 2-3, 2008



  PROgRAm AgEnDA
  frIDAY, oCTober 3, 2008
  8:00 – 8:30 a.m.        Continental breakfast
  8:30 – 8:45 a.m.        review of Day 1
  8:45 a.m. – 12:00 p.m. session V
                         Contemporary rate Design – What are utilities on the front Line of Today’s and
                         Tomorrow’s rate Cases Doing?
                         What are some of the more innovative programs and tariffs now being offered by some utilities?
                         many utilities are now moving toward non-traditional rate recovery mechanisms. What are
                         vertically-integrated utilities doing to advance pricing efficiency? A variety of approaches are
                         being considered – we’ll talk about some of the more successful programs and how rate design
                         is changing.

                          ratemaking to encourage efficient and Innovative electric utility operations – bGe Case study
                           • Traditional ratemaking
                              o Works well enough…
                              o ...but has some limitations
                           • Alternative strategies
                              o Formula rates (transmission/distribution)
                              o Cost trackers for specific programs
                              o Performance based ratemaking
                              o Utility incentives
                              o generation in a deregulated market

                          Sheldon Switzer, Director, Pricing and Tariffs, Baltimore Gas & Electric Company

                         Transforming the Valley Perspective – MegaWatt Meets NegaWatt
                         TVA is attempting to change the perspective of electricity usage and electricity pricing in the
                         Tennessee valley. A robust economy, peak demand growth rates which exceed energy growth
                         rates, and a series of economic development success stories have led to an environment where
                         current pricing is ineffective. left unchecked, TVA will quickly find itself in a position where the
                         investment in incremental generation will literally require an act of Congress. In response to this
                         growth environment, TVA is taking a comprehensive approach to slow the rate of peak demand
                         growth, keep TVA below a debt ceiling, and completely change the way it prices its products.
                         In doing so, TVA will be attempting to achieve demand response, maintain competitive
                         electricity rates, and generate customer satisfaction for distributors and directly served
                         customers alike. The discussion will also include a description of some of the unique aspects of
                         TVA service, including:
                           • TVA’s position of utility supplier and regulator
                           • TVA’s current pricing methodology
                           • TVA’s existing pricing product mix

                          Michael Robert Hynes, Vice President, Pricing & Product Development, TVA

  10:15 -10:30 a.m.       Morning break

                         Dynamic Pricing at Georgia Power Company
                         Fuel expenses continue to rise and utilities face enormous costs for new capital investments. At
                         the same time, pressures are increasing for utilities to help customers reduce demand, energy
                         usage, and energy costs. learn how dynamic pricing at georgia Power helps accomplish these
                         objectives and provides a win for customers, regulators, and shareholders. This presentation
                         will provide information on georgia Power's:
                           • Real Time Pricing program for commercial and industrial customers
                           • Critical Peak Pricing pilot program for residential customers
                           • load Acting as a Contingency Resource (lAaCR) study

                          Greg Roberts, Director, Pricing & Rates, Georgia Power

                                                      register Today! Call 303-770-8800 or visit www.euci.com
  Agenda Continued on Next Page                                                                                                 6
The ArT of fuTure
rATe CAses
october 2-3, 2008



  PROgRAm AgEnDA
  frIDAY, oCTober 3, 2008 (COnTInUED)

                           rate riders and revenue Decoupling – a Path Toward Less risk?
                            • Xcel Energy – background and overview
                            • What is Xcel Energy trying to accomplish through alternative cost recovery mechanisms?
                            • Some examples:
                               o Proposed class-specific and TOU adjustment clauses (mn and CO)
                               o metro Emissions Reduction Project (mn and CO)
                               o Amendment 37 Renewable Energy Rider (CO)
                               o Revenue decoupling (mn, nD, CO)

                           Mark Hervey, Manager, Jurisdictional Revenue Analysis, Xcel Energy

  12:00 p.m.               Concluding remarks




  ABOUT OUR CO-SPOnSORS
                                     Christensen Associates energy Consulting has provided a wide range of economic
                                     and engineering analyses to investor-owned, municipal, co-operative, and other publicly
                                     owned utilities since 1976. Christensen Associates Energy Consulting has remained at
                                     the forefront in the development of the industry’s most innovative products, such as fixed
  bill, time-of-use, real-time pricing, and market-based interruptible load programs. Working side-by-side with our clients,
  we successfully ushered these products through internal reviews and the regulatory approval process, and then helped
  to field and evaluate their performance. We currently work with utilities to solve pricing and costing problems that the
  power industry faces in both retail and wholesale markets. Our services include rate case support, cost of service analysis,
  and demand response programs. We are well known for helping utilities develop pricing and market management
  strategies in response to the changing regulatory and compliance decisions as a part of resource planning.



                                       For 25 years, clients have trusted scottMadden to provide guidance as they face
                                       the challenges associated with growing, consolidating, acquiring or just aspiring to
                                       do what they do better. They trust our people, our methods, and our solutions;
  and they trust us to see them through, start to finish. Scottmadden consultants are experts in the energy industry;
  we understand from experience how challenging it is to manage in the current turbulent and uncertain environment.
  We can help you succeed, despite the shifting landscape, through practical application of management and industry
  best practices. Scottmadden provides broad, deep energy expertise and proven business acumen. We have helped
  energy industry companies—both large and small—develop and implement their strategies, plan their businesses,
  improve their processes, restructure their organizations, and produce results. We have learned the value of listening
  to our clients carefully, tailoring our work to meet their unique needs, and rolling up our sleeves to produce solutions
  that ensure they can compete in this ever-changing industry. meet with us, and let us put 25 years of trusted business
  consulting to work for you. For more information, go to www.scottmadden.com.




                                                        register Today! Call 303-770-8800 or visit www.euci.com
                                                                                                                                  7
The ArT of fuTure
rATe CAses
october 2-3, 2008



  PRE COnFEREnCE WORkSHOP                                       Registration: 12:30 - 1:00 p.m.
  coSt of SeRvice                                               Workshop Timing: 1:00 p.m. - 5:00 p.m.
  october 1, 2008                                               lunch will be provided for workshop participants



  oVerVIeW
  The objectives of this workshop are to (1) present the objectives of cost of service studies and to familiarize
  participants with the diverse methods that are regularly employed to perform such studies, and (2) to discuss the
  arguments used to defend the different methods. The workshop will cover fully-allocated embedded cost of service
  studies used for jurisdictional and interclass revenue allocation. The following provides an outline of the material
  covered.



  WorkshoP AGeNDA
  Fully-Allocated Embedded Cost-of-Service methods
  • Functionalization: Identifying production or generation related costs
  • levelization: Placing the costs, and the customers, at standard voltage levels of service
  • Classification: Identifying how customers consume electricity, which leads directly to how the utility characterizes the
      cost responsibility of each customer or customer group
  • Allocation: The actual process of apportioning each of the functionalized costs to customers and customer groups.
      Different methods used to perform this process will be presented and addressed regarding the advantages and
      disadvantages of each
  • Assignment: Assigning costs and revenues that are known to be directly associated with a specific customer or
      group of customers



  WorkshoP INsTruCTor
  Michael o’sheasy, mBA (georgia State University, 1974) is a Vice President at Christensen Associates energy
  Consulting. He retired as manager of Product Design after over 20 years with georgia Power Company and Southern
  Services, an operating company in the system. His responsibilities include pricing strategy development and future rate
  planning; rate research, design, and evaluation; and the preparation and filing of retail rates. michael also serves as an
  expert witness on both pricing and costing. mr. O’Sheasy was the architect of the Real Time Pricing program at georgia
  Power which is the largest program in the United States. Other leading edge innovations championed by mike include:
  Flat Bill, Price Protection Products, multiple load management, Interruptible Exchange Service, multiple Account
  management, and Daily Energy Credits. He has published numerous articles on pricing in national magazines including
  the TAPPI Journal, Public Utilities Fortnightly, Electric Perspectives, EPRI Journal, Energy Pulse, Energy Customer
  Management, and the Electricity Journal. He has a national reputation for pricing innovation and has been interviewed
  in USAToday, the front page of The Wall Street Journal, Newsweek, National Public Radio, and CNN FN.




                                                       register Today! Call 303-770-8800 or visit www.euci.com
                                                                                                                               8
   PROCEEDIngS                                         REgISTRATIOn InFORmATIOn
   A copy of the conference                            reMeMber, eVerY 4Th reGIsTrANT Is free
   proceedings will be distributed                     For instant registration, call (303) 770.8800 or fax the Registration Form to (303) 741.0849.
   to attendees at the event. Extra
   copies of the proceedings will                      Register 3, Send 4th Free!!
   be available for $495.00 for both                   Any organization wishing to send multiple attendees to these
   events.                                             conferences may send 1 FREE for every 3 delegates registered. Please note that all
                                                       registrations must be made at the same time to qualify.
   COnFEREnCE lOCATIOn
                                                       All cancellations received on or before August 29, 2008 will be subject to a $195
   A room block has been reserved                      processing fee. Written cancellations received after this date will create a credit of the
   at the The Westin O’Hare, 6100                      tuition (less processing fee) good toward any other EUCI conference or publication. This
   River Road, Rosemont, Il 60018,                     credit will be good for six months. In case of conference cancellation, Electric Utility
   for the nights of September 29 –                    Consultants’ liability is limited to refund of the conference registration fee only. For
   October 2, 2008. Room rates are                     more information regarding administrative policies such as complaint and refunds, please
   $189 single/double guest rooms.                     contact our offices at (303) 770.8800.
   Call 847-698-6000 for reservations
   and mention the EUCI conference                     EUCI reserves the right to alter this program without prior notice.
   to get the group rate. make your
   reservations prior to September
                                                       MAIL DIreCTLY To:
   8, 2008. There are a limited
   number of rooms available at the                    Electric Utility Consultants, Inc. (EUCI)
                                                       5555 Preserve Drive                                          reGIsTrATIoN CoDe:
   conference rate. Please make your
                                                       greenwood Village, CO 80121                                  Your Registration Code Is W525
   reservations early.
                                                                                                                    Please Use This When Registering For
                                                       fAX To:                PhoNe:                                The Conference
                                                       (303) 741.0849         (303) 770.8800



PLEASE REGISTER THE FOLLOWING
    The Art of Future Rate Cases Conference (Conference only), $1395
    early bird before september 19, $1195                                                                               eNerGIze WeekLY
                                                                                                                        When you sign up to “Energize Weekly” you
    Discounted Registration Fee for Conference and Workshop , $1795                                                     will receive a new conference presentation each
    early bird before september 19, 2008, $1595                                                                         week via email on a relevant industry topic. The
                                                                                                                        presentations are selected from a massive
    Discounted Registration Fee for The Art of Future Rate Cases (October 2-3) and                                      library of over 1000 current presentations that
    Electricity, A Rising Cost Industry (September 30 - October 1), $2395                                               EUCI has gathered during its 21 years organizing
    early bird before september 19, 2008, $2195                                                                         conferences.
                                                                                                                             sign me up for “energize Weekly"
    Discounted Registration Fee for Attending Both Conferences and Workshop, $2795
    early bird before september 19, 2008, $2595
                                                                                                                        How did you hear about this event?
                                                                                                                        (Direct email, Colleague, Speaker(s), etc.)



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