Improvements Pipeline and Hazardous Materials Safety Administration and Infrastructure Trackers Presented By Chuck Harder Deputy Attorney General About Our Office MISSION Protect consumers and the legitimate business community from deceptive trade practices unfair business practices a ID: 640371
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Natural Gas Infrastructure ImprovementsPipeline and Hazardous Materials Safety Administration and Infrastructure TrackersPresented ByChuck HarderDeputy Attorney GeneralSlide2
About Our OfficeMISSION | Protect consumers and the legitimate business community from deceptive trade practices, unfair business practices, and excessive utility rates or charges; mediate disputes between consumers and businesses; and educate the public regarding consumer issues. Consumer Protection Division fights deceptive trade practices, mediates disputes between consumers and businesses, and educates the public regarding consumer issues.Consumer Utilities Rate Advocacy Division is the voice of Arkansas utility ratepayers as it relates to the provision of regulated electric and natural gas service.Slide3
Investor PerspectiveAccess to capital is not a problem for utilities.Investors want – Growth in operating income,Predictable cash dividend, andLow risk profile.From a regulatory perspective, investors want to reduce regulatory lag on infrastructure investment. Slide4
Current TrendsA number of high profile incidents and the desire for economic growth are the primary catalysts for modernizing the nation’s gas utility infrastructure.Growth will be lagging, and the utilities’ current customers will be called upon to pay for substantial infrastructure investment.Regulators are receptive to rate mechanisms that reduce regulatory lag.Energy prices are lower and less volatile.Slide5
Consumer ConcernsSingle issue ratemaking might cause interested parties to lose sight of the big picture.Keeping an eye on affordability.Utility takes advantage of current environment to “gold plate.”Slide6
“Gold Plating” Where utilities lack organic growth, the use of rate mechanisms to grow operating income is tempting.Slide7
Utility StrategyBuild trust with economic and safety regulators.Construct rate mechanisms that best suit financial outlook.Infrastructure cost recovery tracker or surcharge with SFV rate design or decoupling mechanismFormula rate planDeferral accountsTie programs closely to utility interpretation of PHMSA requirements.Slide8
Consumer Strategy - DiscussionBuild trust with economic and safety regulators.Tie cost recovery to performance.Adjust return on equity to reflect reduction in risk.Develop expertise in pipeline operations.Slide9
Contact Chuck HarderDeputy Attorney GeneralOffice of Arkansas Attorney General Leslie Rutledge323 Center Street, Suite 200Little Rock, Arkansas 72201Direct: 501.682.4058 | Cell: 501.213.5874 │ Fax: 501.682.2000chuck.harder@arkansasag.govSlide10
501.682.2007oag@ArkansasAG.govAGLeslieRutledgeAGRutledgeAGLeslieRutledge ArkansasAGAGRutledge Attorney General Leslie Rutledge