Regulated Utility Rate Of Return – Different Jurisdictions, Different Approaches

A popular session at the 2016 CAMPUT conference in Montreal addressed utility rate of return. This presentation, titled "Rate of Return: Where the Regulatory Rubber Meets the Road" featured two regulators (Willie Grieve, the chair of the Alberta Utilities Board, and Travis Kavulla, vice-chair of the Montana Public Service Commission and chair of the National Association of Regulatory Utility Commissioners (NARUC)), a bond rating agency representative (Nicole Martin of S&P Global Ratings) and a regulatory expert consultant (James Coyne of Concentric Energy Advisors). This broad range of perspectives prompted interesting discussions. The focus for the presentation (as described in the CAMPUT program materials) is on what contributes to the differences in the way that a fair rate of return is determined for utilities in different jurisdictions. As noted in the introduction to this panel, the rate of return allowed by regulators is of fundamental interest to utilities because it