Responding to regulators’ data rate-case requests can often set off fire drills within a utility. Requests may arrive with little notice, in nonstandard formats, and on tight deadlines. For our client, IT rate-case demands are multiplied across multiple operating companies (OpCos) spanning several states and a shift toward multiyear plans (MYPs) in those jurisdictions.
IT has to contend with different—and evolving—requests from numerous regulatory bodies, commissions, and intervenors. Timing adds additional pressure. Commissions regularly request responses within 10 business days and, sometimes, within five. This results in project teams scrambling to respond to the data request and provide key data artifacts to illustrate project objectives, financials, and timelines.
Oftentimes, project teams will be managing multiple data requests from different OpCos, creating further complexity. And, in some cases, the original project team has moved on. Emails have been deleted. With few processes and procedures in place, information is difficult to track down.
As a result, the utility may provide slightly different responses to different states submitting requests at different times. Inconsistencies like those can lead to rate-increase disallowances. With a large capital investment planned over four years, the company wanted to transform how it gathered and cataloged documentation around IT projects in its rate cases so it could respond quickly and consistently. IT needed the right tools and processes to consistently demonstrate the validity of its proposed rate filings, no matter who was asking, or when.
Rate-case management capabilities weren’t ready for the demands of new technology projects
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Today, our client has a dedicated IT rate-case management function (RCMF), a clearly defined team, and an increasingly proactive approach to meeting rate-case demands.
A centralized intake form and standard submission procedures are uniform across all operating companies. As a result, IT is able to quickly identify the information needed to respond rapidly to regulator requests.
New governance around data storage, formatting, and management help ensure that the RCMF is the central point of contact within IT. OpCos responding to IT-specific data requests can call on RCMF for assistance in responding quickly and effectively.
The rate case team provides specific skills, continuity, and accountability for IT’s ability to meet rate-case requests. The team has a bird’s-eye view that empowers it to impact the process in numerous ways:
• Fine-tune governance to further simplify processes and minimize risk
• Maintain a feedback loop with IT to improve processes and reduce pressure on IT planners
• Forecast rate-case requests and create response plans proactively, avoiding last-minute fire drills
• Identify opportunities to leverage past responses in completing new requests, reducing duplicative efforts
• Implement and evolve repeatable processes, improving efficiency and consistency
• Improve data quality through better collection and organization procedures and quality checks.
While IT faces the same challenges as before in terms of the volume and variability of the rate-case requests it receives, it now has a centralized team within IT to provide consistent and robust responses in a timely manner.
Providing a single source of truth for every project is building trust between utility companies, regulators, consumer advocates, and customers. And that trust is helping to reduce risks to multiyear pricing and to the equitable sharing of incremental costs for safe and reliable energy.
A new team and program have transformed how IT responds to rate-case challenges
With a commitment to continued transformation, the new RCMF got to work on additional initiatives that include:
• Performing a workflow gap analysis across each of the OpCos
• Helping OpCos prioritize process improvements
• Undertaking historical IT project data collection and cleanup
• Establishing tiered intake-response benchmarks.
The benefits of the new function will pay dividends far beyond IT. For example, improvements in how IT, Finance, and Regulatory teams work together on IT rate cases will improve how these groups work together overall, including during planning cycles and when evaluating project management. As a result, the investment made in IT will contribute to improved trust and confidence enterprise-wide.
In addition, the company now has the kind of data platform that can support the use of powerful generative artificial intelligence (GenAI) tools. In time, our client could leverage capabilities that other energy companies are using to streamline, automate, and accelerate key areas of rate case management. Here’s an overview of what GenAI can do:
• Enables the automated extraction and transformation of data from various sources, such as financial systems, market reports, regulatory filings, and third-party databases
• Helps ensure the accuracy, completeness, and consistency of the data used for rate-case analysis and reporting, as well as compliance with data privacy and security policies
• Applies advanced analytics and machine learning techniques to generate insights, forecasts, scenarios, and recommendations for rate-case planning and execution
• Creates interactive dashboards and reports that present data and analysis in a clear and compelling way, allowing for easy exploration and collaboration among stakeholders
• Continuously monitors and evaluates the performance and impact of the RCMF, as well as the feedback from users and regulators, and uses this information to improve the data and models over time.
Ready for future demands and opportunities including GenAI
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