Brown Williams employs specialized consultants who have extensive experience with the financial parameters, methodologies and regulatory policies involved in determining costs of capital, including appropriate returns on equity for energy companies given the level of operating and financial risk associated with comparable companies and the particular subject company for the cost of capital study. We can help you perform cost of capital studies regardless of your industry or regulatory jurisdiction since we have performed such studies for merchant generators, natural gas pipelines, petroleum product pipelines, distributors, and electric utilities.

Brown Williams performs cost of service, or revenue requirement, studies for a variety of purposes. You may want a study performed as a part of preparing or challenging a general rate case filing or rate complaint case, to estimate the prices for a new project, to evaluate the costs of a supplier, to secure financing, to prepare a financial plan, to evaluate a company to be acquired, to comply with an agreement or to bill a customer.  Brown Williams has consultants with experience in developing or challenging all sorts of cost of service presentations, including standard natural gas pipeline or electric utility cost of service, levelized cost of service, cost of service formulas used in formula rates, and oil pipeline cost of service using the FERC Opinion 154-B methodology.  We know the methods that are used, understand applicable precedents and have the tools needed to prepare and evaluate these studies for you.

BWMQ provides customized training services to its clients. As an example, recently the firm presented a custom course on natural gas pipeline regulations, compliance and accounting to a major energy company that entered a new line of business.

Public utilities perform specialized, statistically based depreciation and negative salvage studies due to the significant impact of capital recovery timing on service prices. Brown Williams has the tools, data, experience and knowledge to perform these studies for the assets employed in the energy industry. Although the art and science of depreciation is largely underappreciated by the lay person, few other rate case and accounting topics have a more profound effect on each utility’s finances. Depreciation expense cost recovery, as permitted by regulators in regulatory proceedings, affects the entity’s cash flows, timing of investment recovery, risk, property and income taxes, rate base and the net present value of energy assets. Using specialized software, energy resource information, and statistical data about past retirement patterns and the outlook for the future, Brown Williams performs long-term capital recovery forecasts in compliance with regulatory requirements, considering your capital recovery philosophy.

Brown Williams people have had key management and regulatory roles as a part of developing a large variety of important and sizeable projects to strengthen the North American energy grid. Because of this experience, we know how to advise you to make your project succeed. Our capabilities will help you to negotiate with prospective customers, clear regulatory hurdles on time, evaluate options for pricing your project, assist with financing and regulatory accounting issues and help to complete the environmental and business details of necessary regulatory filings. We can also advise you on and testify about the strengths and weaknesses of the applications submitted by other industry participants.

According to the American Institute of Certified Public Accountants (AICPA), “in 2008 the AICPA's governing Council authorized the creation of a new CPA specialty credential in forensic accounting. The credential, Certified in Financial Forensics (CFF), combines specialized forensic accounting expertise with the core knowledge and skills that make CPAs among the most trusted business advisers.  The CFF encompasses fundamental and specialized forensic accounting skills that CPA practitioners apply in a variety of service areas [such as the energy industry], including: bankruptcy and insolvency…; economic damages; ...fraud investigations; litigation support; [and] stakeholder disputes. To qualify [as a CFF], a CPA must be an AICPA member in good standing, have at least five years of experience in practicing accounting, and meet minimum requirements in relevant business experience and continuing professional education.”

Brown Wiliams, due to its intimate knowledge of regulatory, market, economic and financial trends, is well positioned to assist you with your financial and strategic plans. The firm provides market research, throughput forecasting, supply acquisition planning, competitive assessments, evaluations of new market opportunities, demand-side management, integrated resource planning and transportation rate and energy price forecasting services. We can help you to plan for rate cases and by developing test year throughput forecasts for those filings. Brown Williams has assisted LPG, petroleum product pipelines and crude oil pipelines concerning demand and supply conditions in relation to their market position. The firm has also provided market analyses and evaluations for electric utilities.

Prices in an energy context may be referred to by a variety of words: rates, tolls, charges, or bills. Pricing issues are important to you because they affect not only the amounts collected by each energy firm, or overall level of rates, but also relationships with customers, regulators and the public. We help to determine or evaluate the best methods of establishing prices in each regulatory or business context in light of the market place and testify on the design of prices. Our engagements have included establishing prices that vary by distance, time period, cost behavior or service. The firm has prepared testimony on the merits of rolled-in vs. incremental pricing, the impacts of depreciation options on prices and various distance-based and zone pricing methods. We can help you with emerging pricing issues, such as setting market-based and incentive prices. The firm has a particular expertise in innovative pricing strategies, such as levelized rates.

Brown Williams participates actively in regulatory changes, such as those that required the development of bundled and unbundled prices and tariffs for a number of gas pipelines. The unbundled services included gathering, storage, and transmission services. Brown Williams provides assistance in evaluating the behavior of energy markets with an emphasis on regulatory market monitoring initiatives and their impact on electric pricing and requirements to prepare open access transmission tariffs. The firm has evaluated the impact of trended original cost and depreciated original cost methods on the prices charged by oil pipelines. We have analyzed market-based pricing proposals for products and crude oil pipelines and for storage operators.

Cost allocation studies are performed by regulated firms to determine who should pay for the services provided. We understand the applicable regulatory precedents and methods that can and should be employed to allocate costs in setting prices. Cost allocation decisions are made based on the facts of the particular pricing context. We can help you to determine what the facts are and how to evaluate your particular facts under the circumstances.

Regulatory jurisdictions require a utility’s financial transactions to be recorded in compliance with a standard chart of accounts, according to the requirements in statutes and instructions in regulations. These standards create a unique set of accounting requirements to be applied in regulatory filings, such as certificate applications and rate case filings. The requirements of the ratemaking process may dictate differences between the financial treatment of transactions in a utility’s books as compared to the methods used to determine rate base and cost of service. Brown Williams can advise you on applicable precedents and the import and impact of these differences and regulatory requirements on your business. We can help you to develop successful financial strategies in the context of these regulatory accounting requirements, such as by providing advice on regulatory assets and liabilities, how to establish a reasonable capital structure under prevailing regulatory and financial standards or how to defend or evaluate employee benefit costs. Given our expertise in these matters, we are well suited to advise you about whether appropriate methodologies are employed by other industry participants. We have provided expert testimony on regulatory accounting matters in a wide variety of regulatory proceedings. See Engagements and Consultants for information about prior testimony by Brown Williams in regulatory proceedings.

Our consultants at Brown Williams have the experience, knowledge and tools needed to prepare, defend and evaluate regulatory testimony. We have testified successfully in hundreds of cases on every topic that confronts energy companies. Some of these matters, involving federal, state and international regulatory jurisdictions, include: rate cases, oil pipeline costs of service, mergers, acquisitions, divestitures, bankruptcy, tax matters, investigations, disputes and industry restructuring. Contact us to discuss your particular project and see Consultants to identify a consultant with the expertise you seek.

Income, property and other taxes give rise to a variety of regulatory and financial issues that are important to helping your business succeed. Accumulated deferred income tax (ADIT) accounting issues are particularly complex and important due to their impact on rate base and cost of service. We have the knowledge and experience with regulatory tax issues that you need to address regulatory policies concerning tax recovery and rate base computations under particular business structures and the impacts of important developments, such as acquisitions, tax rate and tax base changes, on these costs in regulatory proceedings. We can assist you with corporate and partnership tax reorganizations and the related income tax implications. We advise clients on and provide testimony in property tax proceedings on the impact of regulation on the tax valuation of property.

Brown Williams’ clients may find themselves involved in litigation to resolve differences that have arisen between themselves and other parties. The litigation may be before state or federal courts or before regulatory agencies. The matters covered may include bankruptcy, financial distress or ongoing operating and regulatory issues. These matters often involve substantial sums of money, important ongoing regulatory principles and considerable expenditures of time and resources. Our consultants have considerable experience evaluating business situations, analyzing complex contracts and in applying appropriate accounting principles. Litigation settings typically involve many parties with many differing concerns and interests. Brown Williams helps you, our client, by providing policy and technical assistance. We help with developing strategy, assessing options, determining regulatory implications, preparing financial studies, preparing and negotiating settlements, presenting testimony, training witnesses, computing damages, and assisting legal counsel at trial and in the briefing, rehearing and appeal processes.

Mergers and acquisitions are subject to regulation by the Department of Justice, the Federal Trade Commission and in many instances by other regulatory agencies. We provide testimony, expert advice and economic studies to enable you to achieve approval of these transactions. We provide information to providers of financing for these transactions to enable you to clear the due diligence financing process.

BWMQ has participated in several proceedings concerning market-based rates for natural gas storage facilities and natural gas transmission facilities. Dr. Gallick, Dr. Ogur, and Mr. Sullivan have participated in most of the litigated FERC proceedings involving market-based rate applications.

FERC requires that market-based rate applicants demonstrate (1) that they cannot withhold or restrict services and significantly increase price for a significant period of time; and (2) that they cannot discriminate unduly in terms of price or conditions. To show a lack of market power, an applicant must show that its customers have sufficient “good alternatives” or that it can mitigate its market power. FERC’s analytical framework to show a lack of market power consists of three steps: (1) define the relevant markets, (2) measure the applicant’s market share and the market concentration, and (3) evaluate other relevant factors.

To gain Commission approval to charge market-based rates, the applicant must file a detailed market power study demonstrating that it lacks market power. Similarly, opponents of the application have an opportunity to identify deficiencies in the applicant’s market power analysis as well as to submit their own market power analysis. BWMQ has a wealth of experience in conducting market power studies, including defining relevant markets, identifying good alternatives, computing market shares and HHI statistics, and designing mitigation measures to address any remaining market power concerns. BWMQ can provide an initial market power study to help the client determine whether it is likely that market-based rates can be justified. If so, BWMQ can perform a more rigorous market power analysis that could support an application for market-based rates or an intervenor opposing the application. If the application is set for hearing, BWMQ can provide written testimony and exhibits on the market power issues.

Brown Williams can assist you with many other services not explained in detail here. Some of them include: assisting with electronic filings; advising on regulatory compliance; preparing tariff filings and general terms and conditions of service; assisting energy projects in assembling supplies and transportation compatible with the economics of the projects; helping you to renegotiate out-of-market energy contracts; assisting with energy nominations and in balancing supplies and markets; helping to prepare filings under Section 311 of the NGPA; performing due diligence financing studies; property valuations; evaluating open access issues; performing pipeline asset refunctionalization studies; evaluating storage projects; assisting with the unique regulations pertaining to offshore pipelines; performing market power and market manipulation studies; developing econometric models; assisting entities in initiating or responding to regulatory investigations; and performing studies of entity specific or industry inflation.