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The Regulatory Model

The Regulatory Model . Lisa Sparrow President and CEO, Utilities, Inc. Immediate Past President, NAWC Bob Sprowls President and CEO, American States President, NAWC Baltimore MD, November 1, 2012. January 2012 NARUC Water Committee. ”What’s not working?” Almost never achieve the

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The Regulatory Model

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  1. The Regulatory Model Lisa Sparrow President and CEO, Utilities, Inc. Immediate Past President, NAWC Bob Sprowls President and CEO, American States President, NAWC Baltimore MD, November 1, 2012

  2. January 2012 NARUC Water Committee ”What’s not working?” Almost never achieve the allowed ROE primarily due to the misnomer, regulatory lag

  3. July 2012 NARUC Water Committee ”If the industry adopted all of the water committee’s Best Practices, would that get companies to their allowed ROEs?” In short, closer – but no.

  4. Earned vs Authorized ROE Deficiency

  5. Water vs. Gas and Electric (Baird Study) Water Gas Electric Source: SNL Energy, RW Baird

  6. October 2012 NAWC ROE PanelWhat we heard……. • Still lack of broad acceptance that there is a structural problem with the current model as it applies to water • Even if there is a problem, companies shouldn’t expect to earn their ROE during economic downturns • If ROE is made easier to achieve, it should be lower

  7. Where do we go from here? • Guiding Principles • Acknowledge issue • Acknowledge it is not o.k. and the true ramifications • Create “cover” for state agencies • Monitor the problem • Set goals?

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