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June 07, 2011
Brattle Principal Joe Wharton Discusses Critical Water Issues at National Conference of Regulatory Attorneys

Brattle principal Joe Wharton participated in a panel discussion on critical water issues at the 24th National Conference of Regulatory Attorneys (NCRA) in Missoula, MT on June 7, 2011. He joined Kimberly Joyce, Manager of Regulatory Affairs of Aqua America, and Rhonda Daviston, Assistant Counsel at the Pennsylvania Public Utilities Commission (PPUC), on a panel moderated by Cheryl Walker Davis, Director of the Office of Special Assistants at the PPUC. His presentation, “An Empirical Study of the Impact of Decoupling on the Cost of Capital,” demonstrated that there is no statistically significant reduction in the weighted average cost of capital from decoupling ratemaking based on a large sample of natural gas local distribution utilities over a five-year period (2005 to 2010). Based on an analysis co-authored with Brattle principals Michael Vilbert and Richard Goldberg and senior associate Toby Brown, Dr. Wharton concluded that these findings also reduce the presumption of a reduction in the cost of capital for both regulated water utilities and electric utilities, since the high fixed cost structures and risk profiles are similar in all three industries. Their study findings can be considered interchangeable to a degree in the cost of capital portion of general rate cases. To download Dr. Wharton’s presentation, please follow the link below.