Revenue Requirement Studies

The most basic objective of any business is to generate adequate revenues to pay expenses and earn an adequate return (a.k.a. margin or profit). In the utility industry, the combination of expenses and return is collectively referred to as “revenue requirements.” Whether in the context of a cost of service study or as a separate financial planning tool, Power System Engineering, Inc. (PSE) can assist you with identifying the appropriate revenue requirements and assessing your existing rates.We will work with you to identify the rate change that is necessary to meet your balanced objectives of providing reliable and affordable energy to your consumers.

Any evaluation of a utility’s rates must include the determination of the organization’s revenue requirements. Only after such an evaluation can the adequacy of existing rates be determined.

PSE has assisted utilities on hundreds of occasions with identifying revenue needs, whether in regulated or un-regulated environments. We will consider multiple approaches and work with you to determine the approach that best balances your financial objectives. The result is a well thought out recommendation on what level of rate change is warranted. PSE can then assist with completing a class cost of service study, designing new rates or simply turning the results over to you to execute as desired.