Electric Utility Ratemaking

BGM attorneys work with every aspect of electric utility rates, functioning effectively as strategic consultants, policy advisors, draftspersons and representatives. We work closely with our clients and expert consultants to develop rates from the bottom up. BGM attorneys orchestrate market power studies to support market-based rates, draft and negotiate formula rates, develop cost-of-service analyses to support cost-based rates and counsel clients on the economic, accounting, jurisdictional and political ramifications of their rate proposals.

We have extensive experience advising clients on matters involving cost support, forward-looking test periods, cost allocation, embedded versus marginal costs, taxes, working capital, depreciation, rate of return, capital structure and fuel adjustment clauses. We have shepherded formula rates through regulatory approval and secured rate incentives for new transmission projects. Our experience also encompasses issues tending to arise less frequently, such as recovery of nuclear decommissioning costs, stranded power supply costs, deferred costs and regulatory assets, and the development of avoided cost rates.

Transmission Ratemaking

BGM develops and supports regulatory filings to establish the rates at which public utilities provide transmission service. We also counsel rural electric cooperative utilities on analogous matters although they are not subject to FERC’s traditional rate regulation. BGM assisted in the preparation of the first formula rates for transmission service in the New England and PJM Interconnection, L.L.C. regions and was an industry leader in developing formula rates that are based on estimates of future costs, rather than historic costs.

Incentive Rates

BGM has been successful in securing transmission rate incentives for new transmission investments, including enhanced rates of return, the inclusion of pre-operational construction costs in rate base, assurance of recovery of costs of canceled transmission projects, and rate base inclusion of construction work in progress. We provide strategies, analysis, witness support and documentation necessary to obtain such approvals.

Ancillary Services Rates

BGM has made numerous filings on behalf of vertically-integrated utilities and independent generators to recover costs incurred for generation-related ancillary services necessary to provide reliable transmission service. These include Scheduling System Control and Dispatch Service, Reactive Supply and Voltage Control Service, Regulation and Frequency Response Service, Energy Imbalance Service, Generator Imbalance Service, Spinning Reserve Service and Supplemental Reserve Service. Our innovative approach to the calculation and recovery of the costs of generator-based reactive power service has become industry standard.

Prudence

We have participated in a variety of prudence litigations including nuclear power plant construction, nuclear power plant operation, coal procurement and long-term contracting. We have collaborated with our clients and their local counsel on the implications of imprudence claims in their state regulatory proceedings.