Frank C. Graves
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principal
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Boston
Mr. Graves specializes in regulatory and financial economics, especially for electric and gas utilities, and in complex litigation matters related to securities and risk management.
He has over 30 years of experience assisting utilities in price and demand forecasting, valuation, and risk analysis. Mr. Graves advises on many kinds of long-range planning and service design decisions, recently with particular focus on the future of natural gas, customer willingness and ability to adopt new end-use technologies, and the economics of pathways to decarbonization. He is also active in developing planning criteria and financial management tools for coping with extreme climate risks, especially wildfires.
Mr. Graves testifies regularly before state regulatory commissions, the Federal Energy Regulatory Commission (FERC), arbitration panels, and state and federal courts on such matters as integrated resource planning (IRP), the prudence of investment and contracting decisions, risk management, costs and benefits of new services, and policy options for industry restructuring.
In the area of financial economics, he has advised and testified in civil cases regarding contract damages estimation, securities litigation suits, special purpose audits, tax disputes, risk management, and cost of capital estimation. Mr. Graves has also testified in criminal cases regarding corporate executives’ culpability for securities fraud.
MIT Sloan School of Management
MS, concentration in Finance
Indiana University
BA in Mathematics
Personal Interests
Mr. Graves is a professional violinist, performing frequently with freelance orchestra groups in the Boston area. He has a third-degree black belt in taekwondo and is an avid birdwatcher and wine aficionado.
Testimony
For the Alberta Utilities Commission, Mr. Graves provided written direct and rebuttal testimony on cost of capital risk-positioning in regard to decarbonization policies, and on the financial impacts of service bypass by Rural Electrification Associations on FortisAlberta Company, Proceeding 27084, February and April 2023.
For PacifiCorp in Oregon, testimony in Feb 2020 in regard to why the company was systematically underrecovering fuel and purchased power costs relative to forecasted amounts allowed in rates. He showed that there is an inherent cost to balancing variances in short-term power needs (e.g. due to unexpected load levels or unexpected changes in plant performance) regardless of whether the realized needs are higher or lower than had been forecasted. This is because excess demands tend to be correlated across a market and so will usually have to be purchased at higher than expected prices, while demand shortfalls will tend to have to be released at lower prices than the costs of covering the expected need. Either way, there is a loss (or an extra cost). He testified that there is no good forecasting solution for this, so it would be more appropriate to eliminate risk sharing of these variances and flow them through, subject to periodic prudence review adjustments. His testimony reviewed automatic adjustment clauses and risk-sharing for all major utilities in the US not operating in RTOs.
In an arbitration matter involving alleged lost productivity at a wind farm due to wake effects from another upstream wind fleet, Mr. Graves provided rebuttal testimony on the claimed damages. Capacity and energy values, as well as risks and drivers of uncertainty for the likely output quantities were presented, explaining how prices and utilization of the facilities were likely to change over a twenty-year horizon in a deeply decarbonizing power system.
For Nicor Gas, a natural gas distribution company, Mr. Graves co-authored testimony on the cost of equity capital utilizing a broad spectrum of risk-pricing methods and explaining how financial leverage affects it. Testimony was filed with the Illinois Commerce Commission, Docket 18-xxxx, November 9, 2018.
