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Dr. Vilbert specializes in cost of capital, regulatory economics, financial planning, income tax disputes, and valuation.

He has advised clients on these matters in various investment and regulatory decisions. He divides his time between the firm’s Cambridge and San Francisco offices, working side-by-side with clients around the country.

His recent work has focused on evaluating the effects of various regulatory policy changes, such as decoupling of a company’s cost of capital and asset valuation in arbitration proceedings.

Dr. Vilbert has testified before the U.S. Federal Energy Regulatory Commission, the Canadian National Energy Board, numerous state and provincial regulatory commissions and boards, and in federal court. He has also assisted the U.S. Department of Justice and the U.S. Internal Revenue Service in a variety of complex tax litigation cases.

Representative Engagements
Expert in a series of income tax shelter cases
On behalf of the Department of Justice and the Internal Revenue Service, served as the consulting expert in a series of income tax cases addressing tax shelter plans the IRS considered to be abusive and inconsistent with the underlying substance of the tax code. The DOJ and IRS won all cases.
Development of a realized earnings test
Developed a test on behalf of FirstEnergy’s Ohio electric distribution companies consistent with Ohio’s legislation requiring an annual evaluation of the companies realized earnings. The purpose of the test is to determine whether the companies’ earnings were excessive. The test, which concluded that there were no excessive earnings, was accepted by the Public Utilities Commission of Ohio.
Cost of capital analysis for natural gas pipeline
Provided analyses for El Paso Natural Gas Pipeline before the Federal Energy Regulatory Commission regarding the cost of capital for the pipeline and the appropriate treatment of capacity not currently needed to provide service. Customers sought to deny the pipeline the opportunity to recover the costs of the unused capacity, but the Commission agreed with our analysis that the cost of the unused capacity should be allocated among the remaining shippers, consistent with the regulatory compact.
Report on the appropriate treatment of accrued depreciation
Provided a report on behalf of Progress Energy Florida, Inc., on the appropriate treatment of accrued depreciation expense for an asset whose expected life had been extended by 20 years. Report countered the request by intervenors to “reverse” the accrued deprecation. The report noted that the request would actually increase costs to customers in the long term and would likely lead to a credit rating decrease for the utility because of the reduction in cash flow. The Florida Public Service Commission denied the intervenor’s request.
Testimony
Direct testimony before the Federal Energy Regulatory Commission, Docket No. PA10-13-000, on behalf of ITC Holdings Corp. regarding a rehearing for FERC Staff, Office of Enforcement, Division of Audits, Report on the appropriate accounting for goodwill for the acquisition of ITC Midwest assets from Interstate Power and Light Company
February 2012
Report before the Arbitrator on behalf of Canadian National Railway Company in the matter of a Submission by Tolko Marketing and Sales LTD for Final Offer Arbitration of the Freight Rates and Conditions Associated with Respect to the Movement of Lumber by Canadian National Railway Company from High Level, Alberta to Various Destinations in the Vancouver, British Columbia Area
October 2011
Direct and rebuttal testimony before the Michigan Public Service Commission, In the matter of the application of The Detroit Edison Company, for authority to increase its rates, amend its rate schedules and rules governing the distribution and supply of electric energy, and for miscellaneous accounting authority, Case No. U-16472
October 2010, April 2011
Direct testimony before the Federal Energy Regulatory Commission, Docket No. ER11-013-000, on behalf of the Atlantic Wind Connection Companies, on the Cost of Capital and Cost of Capital incentive adders for Electric Transmission Assets
December 2010
Direct and Rebuttal Testimony before the California Public Utilities Commission regarding cost of service for San Joaquin Valley crude oil pipeline on behalf of Chevron Products Company, Docket Nos. A.08-09-024, C.08-03-021, C.09-02-007 and C.09-03-027
December 2009, April 2010
Publications
Book
Risk and Return for Regulated Industries
May 02, 2017
Published by Elsevier

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

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
Moving Toward Value in Utility Compensation: Shareholder Value Concept
June 13, 2016
Presented to the California Public Utilities Commission
Presentation
Natural Gas Pipeline FERC ROE
March 2016
Presented at the Interstate Natural Gas Association of America (INGAA) Rate of Return Seminar
Article
Decoupling and the Cost of Capital
September 08, 2015
Published in The Electricity Journal
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
Estimating the Cost of Equity for Regulated Companies
February 17, 2013
Prepared for the Australian Pipeline Industry Association
Report
Survey of Cost of Capital Practices in Canada
May 2012
Published by The Brattle Group, Inc.
Report
Economic Impact on City of Portland of Allocation of Remediation Costs of Portland Harbor Superfund Site
March 2012
Published by The Brattle Group, Inc.
Report
The Impact of Decoupling on the Cost of Capital – An Empirical Study
March 2011
Published by The Brattle Group, Inc.
Report
Understanding Debt Imputation Issues
June 2008
Prepared for The Edison Electric Institute
Article
Measuring Return on Equity Correctly: Why current estimation models set allowed ROE too low
August 2005
Published in Public Utilities Fortnightly
Report
The Effect of Debt on the Cost of Equity in a Regulatory Setting
April 2005
Published by Edison Electric Institute
Presentation
Current Issues in Cost of Capital
2005
Presented at the EEE Electric Rates Advanced Course, Madison, WI
Presentation
Issues for Cost of Capital Estimation
February 2004
Prepared for the Edison Electric Institute Cost of Capital Conference
News & Events
June 29, 2017
Brattle Economists to Present at Rutgers Center for Research in Regulated Industries Annual Western Conference

A group of Brattle consultants will present at Rutgers Center for Research in Regulated Industries’ (CRRI) 30th Annual Western Conference, taking place June 28-30, 2017 in Monterey, CA.

May 02, 2017
Brattle Economists Author Risk and Return for Regulated Industries

Brattle Principals Bente Villadsen, Michael Vilbert, and Dan Harris, and Principal Emeritus A. Lawrence Kolbe have authored a new book that examines the topic of cost of capital for regulated industries.

September 08, 2015
Brattle Economists Co-Author Article on Decoupling for The Electricity Journal

Brattle principals Michael Vilbert and Joseph Wharton recently co-authored an article on decoupling in August/September 2015 issue of The Electricity Journal.

June 25, 2014
Brattle Consultants to Present at CRRI’s 27th Annual Western Conference

Several Brattle consultants will participate in the upcoming Center for Research in Regulated Industries (CRRI) 27th Annual Western Conference, taking place from June 25 - 27, 2014 in Monterey, CA. CRRI is located at Rutgers University and aims to further study regulation in economics, finance, and institutions.

Personal Interests

Michael came to consulting after a career in the United States Air Force. After serving as a fighter pilot and intelligence officer at the Pentagon, he was a professor at the United States Air Force Academy, where he taught corporate finance, investments, and operations research. During his tenure at the Academy, he tutored collegiate athletes and gave flying instruction in both glider and light aircraft. He was also an active member of the Academy’s sky diving, skiing, and scuba clubs. After moving to San Francisco in 2009, he has particularly enjoyed exploring the many wineries in the Bay Area, especially those in Napa Valley. Michael is married with one son. He and his wife reside the East Bay.