Anomaly or New Normal?

Regulators weigh interest rate climate and future Fed policy in setting allowed return on equity.

(November 2013) Consumer advocates argue for lower allowed utility returns, to reflect lower financing costs. Our rate case survey shows mixed regulatory responses.

Bargain or Bonanza

Is discounted cash flow (DCF) still a reliable tool for determining equity cost?

The time-honored discounted cash flow method for determining appropriate utility returns falls short when interest rates are low. Inadequate ROEs ultimately increase cost of capital and wipe away any temporary savings.