Finance & Ratemaking

The Brattle Group combines a thorough understanding of ratemaking and regulation with world-class knowledge in finance to provide our clients with new and innovative methods to structure rates, determine financing costs, and manage energy risk.

We apply finance and economic principles to advise clients on strategies pertaining to the utility of the future, cost of capital, risk management, and rate design. Our economists are also industry leaders in load forecasting and weather normalization methods for planning and ratemaking purposes.

We frequently serve as expert witnesses in rate cases and other finance matters, and as strategy consultants for utility management or other utility market participants. We are also called upon to prepare reports that provide a thorough analysis of regulatory finance issues. Our team of experts has published widely-regarded texts and articles on industry financial practices and policy questions. Our staff includes Stewart C. Myers, the author of the leading graduate-level textbook on corporate finance, and Daniel McFadden, a Nobel Laureate for his an expertise in applying statistical methods to economics. Our vast network of academic and industry experts and the worldwide focus of our practice keep us at the forefront of critical regulatory finance and ratemaking issues.

Areas of Expertise

Principals
Arthur 056
Principal
+1.617.864.7900
Dr. Arthur has more than 15 years of consulting and litigation experience in the natural gas, natural gas liquids, and petroleum industries. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Thebrattlegroup tobybrown img 4852
Principal
+61.2.8123.0999
Dr. Toby Brown specializes in the regulation and economics of the gas and electricity sectors. He has consulted for pipelines, utilities, and regulators and he has particular expertise in incentive-based regulation in the energy sector. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Carpenter 063
Principal
+1.617.864.7900
Dr. Carpenter specializes in the fields of energy economics, regulation, corporate planning, pricing policy, and antitrust. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Faruqui web
Principal
+1.925.408.0149
Dr. Faruqui specializes in smart grid strategies involving the consumer. His expertise includes demand forecasting, innovative rate design, energy efficiency, demand response, advanced metering infrastructure, technology assessment, and cost-benefit analysis. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Graves 060
Principal
+1.617.864.7900
Mr. Graves specializes in regulatory and financial economics, especially for electric and gas utilities, and in litigation matters related to securities litigation and risk management. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Hanser 080
Principal
+1.617.864.7900
Mr. Hanser assists clients in issues ranging from utility industry structure and market power and associated regulatory questions, to specific operational and strategic issues, such as transmission pricing, generation planning, and tariff strategies. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Harris 129
Principal
(Rome) +39.06.48.888.146
(London) +44.20.3829.2340
Mr. Harris has more than fifteen years of experience as expert in valuation, quantification of damages, and the economics of gas and electricity markets. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Ryanhledik img 4596
Principal
+44.20.7406.7900
+1.415.217.1000
Mr. Hledik has expertise in assessing the economics of smart grid investments and policies. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Levine 056a
Principal
+1.617.234.5729
Mr. Levine specializes in energy and regulatory economics and is an expert in the economics of the natural gas, oil, and liquefied natural gas markets. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Lo passo
Principal
Dr. Lo Passo specializes in the application of regulatory economic principles to energy, transportation, telecommunications, and other industries in Italy and throughout the world. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Mudge 129
Principal
+1.202.955.5050
Mr. Mudge, Chief Operating Officer of The Brattle Group, is an expert in corporate and project finance matters in the energy industry. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
O'loughlin photo bio
Principal
+1.617.864.7900
Mr. O'Loughlin is an expert in the application of economics and finance to complex commercial damages disputes, asset valuations, and regulatory matters that arise in energy markets. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Read 050
Principal
+1.617.864.7900
Mr. Read is an expert in valuation, risk management, and capital budgeting in the energy industry, especially electric power and natural gas. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Ros bio photo
Principal
+1.617.864.7900
Dr. Ros specializes in costing and demand analysis, cost of service and performance-based ratemaking, competition analysis and disputes, damages, and econometric modelling. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Sergici 102
Principal
+1.617.864.7900
Dr. Sergici assists electric utilities, regulators, and wholesale market operators in their strategic questions related to energy efficiency, demand response, and customer behavior in the context of Smart Grid. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Vilbert 119
Principal
+1.415.217.1000
Dr. Vilbert specializes in cost of capital, regulatory economics, financial planning, income tax disputes, and valuation. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Villadsen 048
Principal
+1.617.864.7900
Dr. Villadsen specializes in finance and accounting matters with an emphasis on the energy industry. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Zarakas 092
Principal
+1.617.864.7900
Mr. Zarakas is an expert in economic, financial, strategic, and regulatory analyses in the utility, telecommunications, and media industries. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Academic Advisors
Academic Advisor
Mr. Bailar is an Emeritus Professor at Rice University. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Fox penner 131
Academic Advisor
+1.202.955.5050
Dr. Fox-Penner specializes in economic, regulatory, and strategic issues in network industries. His practice centers on energy and environmental policies and electric regulation, planning, and competition issues. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Academic Advisor
Dr. Graham is a Professor of Finance at the Fuqua School of Business at Duke University. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Senior Associates
Aydin 087
Senior Associate
+1.415.217.1000
Mr. Onur Aydin is a senior associate with an engineering background and over 10 years of experience in energy economics, electricity market modeling, and transmission planning. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Fantini bio
Senior Associate
+39.06.48.888.10
Ms. Fantini has more than 10 years of experience in the energy sector, particularly in the natural gas and electricity industries. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
24 edit 2
Senior Associate
+1.202.419.3356
Mr. Kline’s areas of expertise include electricity markets and regulation, financial accounting, corporate finance, asset valuation, international arbitration, market manipulation, and fraud. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Lessem 054
Senior Associate
+61.2.8123.0999
Dr. Lessem assists utilities, policymakers and technology firms across North America, Asia, the Middle East and Australia on rate design, energy policy, innovative pricing, experimental design, technology adoption and policy impact measurement. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Stirzaker
Senior Associate
+44.20.7406.7900
Mr. Stirzaker is an economics and financial expert, with experience valuing businesses and financial instruments across a range of industries. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Thapa 112
Senior Associate
+1.617.864.7900
Mr. Thapa is an expert in the regulation and economics of the energy sector. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Presentation
A Walk on the Frontier of Rate Design
October 5, 2017
Ahmad Faruqui and Cody Warner
Presented to the Western Farmers Electric Cooperative's Residential Demand Workshop
Presentation
The Future of Tariff Reform: A Global Survey
September 28, 2017
Ahmad Faruqui, Léa Grausz, and Hallie Cramer
Presented to the Indiana Energy Association’s (IEA) Annual Energy Conference
Presentation
Forecasting the Impact of DSM on Energy Sales
September 14, 2017
Presented to the Edison Electric Institute (EEI)
Article
Moving Forward with Electricity Tariff Reform
September 2017
Published in the CATO Institute's Fall 2017 Regulation Magazine
Presentation
Modeling the Utility of the Future and Developing Strategies to Adapt and Lead
September 2017
Presented at Edison Electric Institute’s (EEI) Strategic Issues Roundtable
Article
Innovations in Pricing: Giving Customers What They Want
September 2017
Published in Edison Electric Institute's (EEI) Electric Perspectives
Report
Compensating Risk in Evolving Utility Business Models
August 2017
Published by The Brattle Group's Retail Energy Practice

This brief focuses on how the overall risk of a utility, especially as measured in its cost of capital, may be impacted by "Utility of the Future" developments.

Article
Enhancing Customer-Centricity: Growing New Relationships
August 2017
Ahmad Faruqui and Henna Trewn
This article was published in Public Utilities Fortnightly, August 2017. Copyright PUR Inc. (www.fortnightly.com). Used by permission of the publisher.
Article
Rethinking Customer Research in the Utility Industry
July 2017
Ahmad Faruqui and Henna Trewn
This article was published in Public Utilities Fortnightly, July 2017. Copyright PUR Inc. (www.fortnightly.com). Used by permission of the publisher.
Report
The public benefits of leasing energy efficient equipment
July 2017
Ahmad Faruqui, Neil Lessem, and Henna Trewn
Published in The Electricity Journal, Volume 30, Issue 6

Utility-led leasing solutions can overcome several key barriers to customer adoption of new, efficient products that are overlooked by traditional energy efficiency programs or non-utility leasing programs, as a program proposed by Puget Sound Energy illustrates. By encouraging the installation of energy efficient equipment, a utility-led leasing program would generate significant benefits in terms of bill savings, enhanced comfort and quality of life, avoided energy costs, avoided capacity costs, and avoided emissions.

Report
July 2017
Ryan Hledik, Will Gorman, Nicole Irwin, Michael Fell, Moira Nicolson, and Gesche Huebner
Prepared for Citizens Advice

This report quantifies the system value of time-of-use (TOU) tariffs in Great Britain and explores consumer preferences for TOU tariffs.

Presentation
The Public Benefits of Leasing Energy Efficient Equipment: A Utility Case Study
June 30, 2017
Henna Trewn, Ahmad Faruqui, and Neil Lessem
Presented at the Center for Research in Regulated Industries' (CRRI) 30th Annual Western Conference
Presentation
PRISM Simulating the Impact of Demand Charges in the Absence of Empirical Data
June 30, 2017
Angela Gunn
Presented at the Center for Research in Regulated Industries' (CRRI) 30th Annual Western Conference
Presentation
Estimating the Impact of DSM on Energy Sales Forecasts: A Survey of Utility Practices
June 29, 2017
Zhen Wang, Ahmad Faruqui, and James Hall
Presented at the Center for Research in Regulated Industries' (CRRI) 30th Annual Western Conference
Report
Pepco Maryland In-Home Display Pilot Analysis
June 2017
Prepared for Pepco
Presentation
DERs and Electricity Rates in Ontario
May 29, 2017
Presented at The Mowat Centre Conference on Emerging Energy Trends
Article
Using Electric And Gas Forwards To Manage Market Risks
May 2017
Published in North American Windpower
Book
Risk and Return for Regulated Industries
May 2017
Published by Elsevier

This book establishes the principles and procedures for determining the fair rate of return on capital investment.

Presentation
April 20, 2017
Presented at the Society of Utility and Regulatory Financial Analysts’ (SURFA) 49th Financial Forum “Cost of Capital in a Changing Utility Landscape”
Article
2017
Published in The Energy Journal, Volume 38, Number 4

The article estimates electricity demand elasticity for different customer classes as well as the price effects from unbundled wholesale generation in conjunction with retail competition in the United States during the period 1972-2009.

Report
January 2017
Published by The Brattle Group, Inc.

The whitepaper examines how wind generators could use standard electric and gas forward contracts to hedge its revenue to reduce risk over mid- to long-term horizons.

Report
Effect on the Cost of Capital of Ratemaking that Relaxes the Linkage between Revenue and kWh Sales: An Updated Empirical Investigation of the Electric Industry
November 2016
Michael J. Vilbert, Joseph B. Wharton, Shirley Zhang, and James Hall
Published by The Brattle Group, Inc.
Presentation
Understanding Residential Customer Response to Demand Charges: Present and Future
October 20, 2016
Presented at EUCI’s Residential Demand Charges Conference
Presentation
Retail Costing and Pricing for Electricity
August 11, 2016
Presented at IPU's 58th Annual Regulatory Studies Program: The Fundamentals Course
Report
July 18, 2016
Ahmad Faruqui, Wade Davis , Josephine Duh, and Cody Warner
Published in Electricity Policy
Presentation
Moving Toward Value in Utility Compensation: Shareholder Value Concept
June 13, 2016
Presented to the California Public Utilities Commission
Presentation
Brattle Tariff Design Best Practices
June 1, 2016
Prepared for Tenaga Nasional Berhad (TNB) and the Government of Malaysia
Presentation
Modeling Customer Response to Xcel Energy's RD-TOU Rate
April 21, 2016
Presented to Xcel Energy
Report
April 2016
Prepared for Citizens Advice
Article
Decoupling and the Cost of Capital
September 8, 2015
Published in The Electricity Journal
Report
An Evaluation of SRP’s Electric Rate Proposal for Residential Customers with Distributed Generation
January 5, 2015
Prepared for the Salt River Project
Report
Incentive-Based Ratemaking: Recommendations to the Hawaiian Electric Companies
May 20, 2014
Prepared for The Hawaiian Electric Companies
Report
The Impact of Revenue Decoupling on the Cost of Capital for Electric Utilities: An Empirical Investigation
March 20, 2014
Michael J. Vilbert, Joseph B. Wharton, Charles Gibbons, Melanie Rosenberg, and Yang Wei Neo
Prepared for The Energy Foundation
Report
Alternative Regulation and Ratemaking Approaches for Water Companies
September 23, 2013
Joseph B. Wharton, Bente Villadsen, and Heidi Bishop
Prepared for the National Association of Water Companies
Report
Estimating the Cost of Debt
March 4, 2013
Prepared for the Dampier Bunbury Pipeline
Report
The WACC for the Dutch TSOs, DSOs, water companies and the Dutch Pilotage Organisation
March 4, 2013
Prepared for NMa
Report
Estimating the Cost of Equity for Regulated Companies
February 17, 2013
Prepared for the Australian Pipeline Industry Association
Report
Calculating the Equity Risk Premium and the Risk-free Rate
November 26, 2012
Prepared for NMa
Presentation
Infrastructure and Rate Structure: Lessening the Shock
November 12, 2012
Presented at the 2012 NASUCA Annual Meeting, Baltimore, MD
Report
Framework for Assessing Capex and Opex Forecasts as Part of a “Building Blocks” Approach to Revenue/Price Determinations
June 2012
Prepared for the Australian Energy Market Commission
Report
The WACC for mobile, fixed-line and cable termination rates
March 15, 2012
Dan Harris, Jack Stirzaker, and Cosimo Fischietti
Prepared for the Independent Post and Telecommunication Authority in the Netherlands (OPTA)
Article
Dodd Frank Compliance for Oil and Gas Companies
February 6, 2012
Julia E. Sullivan, Cary Oswald, and Romkaew P. Broehm
Published in Oil & Gas Monitor
Report
Cleaning Up Spark Spreads: How Plant Owners Can Reduce Risk Through Carbon Markets
March 2011
Published by The Brattle Group, Inc.