Events

Financial Concepts for Regulated Utilities - 2027

NARUC Professional Development
Track: Accounting & Rate Design

January 19, 20, 21, 2027, 2-4 pm Eastern Live online

Overview:

This course introduces students to the foundational finance and regulatory principles underlying utility regulation. Through a blend of theoretical and practical perspectives, students will explore why utilities are regulated and how financial concepts such as risk, return, and portfolio theory apply within this framework. Key topics include the relationship between a utility's rate base and capital structure, the calculation and interpretation of the weighted average cost of capital (WACC), and the determination of the required return on common equity. By the end of the course, students will gain a comprehensive understanding of how financial theory informs regulatory decisions and affects utility performance.

Fees

NARUC State, Associate, and Federal Members: $265
Other State, Federal Government, and International Agencies / NASUCA Members / Academia: $465
All Others: $665

Registration will open soon.

Learning Objectives:

At the end of this course, participants will be able to:

  • Explain the rationale behind utility regulation and its role in public policy and economics.
  • Describe key financial concepts relevant to utility regulation, including risk, return, and portfolio theory.
  • Analyze the relationship between a utility's rate base and its capital structure.
  • Calculate the weighted average cost of capital (WACC) for a regulated utility using appropriate financial data.
  • Evaluate the required return on common equity within the context of regulatory frameworks and investor expectations.

Course Outline:

Day 1:

  • Why Utilities are Regulated
  • Market Structure
  • Competition versus Natural Monopoly
  • Economic Profits
  • Risk and Return

Day 2:

  • Portfolio Theory
  • Beta
  • Rate Base/Rate of Return Regulation
  • Reconciling Rate Base and Capital Structure

Day 3:

  • The Required Return on Common Equity
  • Legal Concepts
  • Discounted Cash Flow (DCF)
  • Capital Asset Pricing Model (CAPM)
  • Financial Concepts for Regulated Utilities

Who Should Attend:

Financial Concepts for Regulated Utilities is directed at anyone with an interest in how utilities are financed and regulated. This course also reviews financial concepts commonly associated with utility regulation, including optimal capital structure, market-to-book ratios, and securitized bonds. This course is for commissioners, commission staff, intervenors, consumer advocates, utility representatives, and policymakers.

Instructor: Mark Cicchetti, Florida Public Service Commission

Mark Cicchetti is the Director of the Division of Accounting and Finance at the Florida Public Service Commission. Mr. Cicchetti has over 40 years' experience in utility regulation and has testified as an expert witness numerous times on a wide variety of subjects but mainly regarding the required return on equity. Mr. Cicchetti was awarded the 2019 Gerald L. Gunter Distinguished Service Award by the Public Utility Research Center at the University of Florida for Contributions to Regulatory Policy. Mark has a BS in Business Administration and an MBA in Finance, both from Florida State University.