Achieving Equitable Outcomes
Tom Flaherty is a Senior Advisor at EY-Parthenon, Ernst & Young LLP, in Dallas.
Muss Akram is a Senior Director at EY-Parthenon, Ernst & Young LLP, in Houston.
In the November edition of Public Utilities Fortnightly, we introduced the need for heightened attention by utilities to address the trend in uneven distribution of transaction-related regulatory outcomes. Part One discussed the relevant elements and impacts of benefits and costs, while also introducing the nature and implications of shareholder and customer risks assumed in a transaction.
This description primed the pump for a more important discussion. What does a comprehensive regulatory plan look like to provide the breadth and depth of information utilities need to demonstrate to justify more equitable transaction outcomes are necessary, and regulators need to have in-hand to effectively consider how to better apportion risks, synergies, and costs?
Crafting the Plan
Given the significance of obtaining an equitable regulatory outcome, particularly as transaction scale and value-at-risk continue to increase, the importance of a well-crafted regulatory plan has never been higher. Unfortunately, the dichotomy in views about what this looks like between utilities, regulators, and intervenors is particularly stark.