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Inside Utility Accounting and Financial Reporting

Produced by the Knowledge Center, expert training from S&P Global Market Intelligence

Utility companies face a variety of unique accounting and financial reporting challenges. Whether you're a financial professional in the industry, or an analyst following the sector who needs to understand how those challenges impact the utility business, this program will give you a more nuanced perspective. You'll come away with a solid understanding of the impact of financial reporting and regulatory accounting components of an electric or gas utility.

As an attendee, you will:

  • Engage in discussions of real life case studies, explaining the interaction of rate base, rate of return and operating expenses in determining revenue requirements
  • Gain experience tracing the effects of the ratemaking process on utility accounting (ASC980) and in a utility's financial statements
  • Learn the essential differences between GAAP and FERC financial reporting requirements
  • Interact with subject matter experts on a wide range of topics, including utility plant depreciation, funds used during construction (AFUDC) and capitalization methods used for utility plants
  • Acquire the knowledge to compare income tax accounting and concepts of normalization and flow-through
  • Discuss the sector specific impacts of utility rate regulation, utility ratemaking, revenue sources and cost allocation

Key topics:

  • Special features of the utility balance sheet and income statements
  • Compliance with accounting and financial rules
  • How revenues are calculated for the common customer classes
  • Calculations and components of a rate order
  • The special regulated accounting and regulatory issues facing utilities' income taxes
  • How the convergence of the International Financial Reporting Standards (IFRS) with GAAP will challenge utilities and what it will likely take to comply with the standards

"Very worthwhile, even for those with relatively light utility experience."
– General Accountant, Empire District Electric Co.

"Great introductory understanding of utility accounting and its impact on revenues."
– Supervisor Project Controls, Ameren Illinois

"Instructor broke things down in a very consumable way, providing examples throughout."
– Manager, TECO Energy

Instructor

Alan D. Felsenthal

Managing Director, Power & Utilities

Alan Felsenthal has more than 35 years of experience working with utilities clients on accounting matters, rate cases, and a variety of special projects. Prior to rejoining PricewaterhouseCoopers, LLP in 2010, Alan most recently was a managing director at Huron Consulting Group focusing on the utilities industry (2008-2010). Prior to that, he worked as a managing director at PwC in the utilities industry practice (2002-2008) and prior to that, rose through the ranks at Arthur Andersen LLP’s utilities and telecommunications practice (1971-2002). Education and certifications: Bachelor of Science, Business Administration, University of Illinois, Urbana, Illinois; Certified Public Accountant, Illinois, Member AICPA.

Inside Utility Accounting and Financial Reporting Agenda

TIME
TUESDAY, May 16th
8:30 am
Welcome and Introductions:
8:45 am
Ratemaking Process and How Revenue Requirements Are Determined Under Traditional Rate Regulation:

Overview of the role of regulatory commissions (state and Federal (FERC)) including which activities are regulated, how they are regulated, discussion of the general requirements associated with a traditional rate case. The session will include an example explaining the interaction of rate base, rate of return and operating expenses in determining revenue requirements. The session is designed to:

  • • Provide an overview of the regulatory process
  • • Discuss the general rate making formula
  • • Highlight areas where accounting and reporting issues exist specific to regulated utility companies
10:00 am
Refreshment Break:
10:15 am
Revenue Sources:

Various factors may affect revenues and accounting including concepts of fuel adjustment clauses, other trackers, unbilled revenue, AFUDC and budget billing, including:

  • • Unbilled revenues
  • • Adjustment clauses
  • • Classes of service and rate design
  • • Alternative Revenue Programs
  • • AFUDC vs. CWIP in rate base
12:00 pm
Lunch:
1:15 pm
Plant Accounting Concepts:

This session will focus on three key areas with regards to plant accounting: 1) utility plant depreciation, 2) capitalization concepts, and 3) accounting for removal costs (cost of removal and asset retirement obligations (AROs), specifically:

  • • Depreciation methods: GAAP, Individual asset depreciation, composite (group) depreciation
  • • Impact of extending (or reducing) the service life of a power plant
  • • Capitalization versus expensing
  • • Retirement Units/Minor Items of Property and Cost of removal/AROs
2:45 pm
Refreshment Break:
3:00 pm
Accounting for the Effects of Rate Regulation:

The ratemaking process creates a unique link between costs and revenues. ASC 980 addresses the financial accounting and financial statement impact of this process. In this section we will cover the general and specific accounting standards that exist for rate regulated enterprises as well as certain unique financial statement disclosures typically required by rate regulated entities. The following issues will be addressed:

  • • Scope requirements
  • • Regulatory Assets and Liabilities
  • • Alternative Regulatory Programs
  • • Discontinuation of regulatory accounting
4:00 pm
Income Tax Accounting and Key Industry Issues:

Regulated businesses face special income tax and tax accounting issues. During this session several income tax and regulatory issues facing the utility industry will be discussed. Topics include income tax accounting basics and the concepts of flow-through and normalization. The following topics will be addressed:

  • • Income tax accounting for regulated businesses
  • • Flow through vs. normalization
  • • Common Schedule M differences between book and tax
5:00 pm
Day One Concludes:
TIME
WEDNESDAY, May 17th
8:30 am
FERC Uniform System of Accounts (USOA):
Participants will walk through the FERC USOA requirements required to be followed by almost all rate-regulated entities. Focus will include how the USOA is organized, plant instructions, operating expense instructions, accounts and several issues noted as a result of FERC audits.
9:15 am
Revenue Requirements Case Study:
This session will follow a simplified revenue requirement case study, focusing on the calculations of rate base, rate of return and operating expenses and summing to a revenue requirement. This exercise will provide a recap of concepts discussed previously and allow participants to see how the various rate case components interact.
10:15 am
Refreshment Break:
10:30 am
New Revenue and Leasing Accounting Standards:
The FASB is changing the revenue and leasing accounting models. In this module, participants will learn about the key changes and the potential impacts to the utility industry—both in terms of accounting and disclosure under GAAP and FERC.
12:00 pm
Regulatory Roundup:
12:45 pm
Program Concludes:
More

Ticket Info

Early bird rate - $1,795
(expires on March 31)

Regular fee - $1,995

Register

Event location

The University of Chicago Gleacher Center
450 N. Cityfront Plaza Dr.
Chicago, IL 60611
+1 (312) 464-8787

Your registration includes all program work materials, plus continental breakfast both days and lunch on Day One.

Downloads & FAQs

Energy Sector Training Course Catalog

Who Attends?

  • Finance, corporate development/strategy, and investor relations professionals at power and gas companies
  • Consultants, accountants and lawyers who advise power and gas clients
  • Current and potential suppliers or professionals looking for an understanding of the unique aspects of accounting in the power sector

Prerequisites:
This program presumes familiarity with basic accounting and finance concepts. Participants will need to bring a laptop computer equipped with Microsoft Excel.

What is the dress code?
Business casual

Do I need a laptop? A calculator?
No laptop is required for this course.

What meals are included?
Your registration fee includes continental breakfast, lunch and coffee breaks for all days of the program.

What is the cancellation policy?
Cancellations for this program are eligible for a full refund, less a $150.00 administrative fee, if received at least 15 business days prior to the start of the program. Cancellations received after that date but at least 5 business days prior to the start of the program receive a credit in the amount of the registration fee, less a $150.00 administrative fee, to attend another Knowledge Center program within 13 months. Cancellations received fewer than 5 business days prior to the start of the program are not eligible for a refund or credit. 

Attendee substitutions from the same company may be made at any time.

In the event of a cancellation from a group discount, refunds or credits are issued beginning with the most heavily discounted price, minus a $150.00 administration fee.

"No shows" - or those who cancel within 15 days of the program - and have registered under the Invoice option, remain liable for the full program fee.

The Knowledge Center reserves the right to cancel/change programs, content, speakers or venue at any time. Knowledge Center reserves the right to make portions of the program registration information available to program sponsors. Knowledge Center will not be held liable for any costs incurred by registrant due to individual registration cancellation. In the event that a seminar is cancelled due to inclement weather, faculty cancellation or force majeure, Knowledge Center will refund the registrant's tuition in full, however Knowledge Center will not be liable for incidental or consequential out of pocket expenses incurred by the registrant. If you have questions regarding Knowledge Center's refund, complaint or program cancellation policy, please call us at (434) 951-7786.

Registrant, as an individual person attending a Knowledge Center conference, seminar, or other program, hereby grants permission to the Knowledge Center to use and publish his or her image, likeness, or testimonials collected in connection with the program for advertising and trade purposes in connection with Knowledge Center’s conferences, instructional, and/or marketing activities.

Continuing Education Credits

9 Hours of Continuing Education Credit
Knowledge Center is registered with CFA Institute as an Approved Provider of professional development programs. This program is eligible for 9 CE credit hours as granted by CFA Institute. If you are a CFA Institute member, CE credit for your attendance at this event will be automatically recorded in your CE Diary upon request.
11 Hours of CPE Credit
Participants who complete this program qualify for 11 hours of CPE credit (Accounting). Program Level: Beginning. Delivery Method: Group-Live. Knowledge Center is registered with the National Association of State Boards of Accountancy (NASBA), as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 4th Ave N, Ste 700, Nashville, TN, 37219-2417. Website: www.nasba.org.