Essentials of Regulatory Finance provides participants with the skills needed to apply the principles of corporate finance to utilities.
Combining intensive instruction on theory and application, supplemented by real life examples,
ERF provides the equivalent of graduate level instruction under the guidance of one of the most highly respected academics in energy finance.
Classwork consists of lectures and problem sets that illustrate the nuances of finance issues in this complex sector under the current regulatory environment.
What You Will Learn
- A thorough understanding of the issues in cost of capital calculations, capital allocation frameworks and alternative capital structures
- Familiarity with the key metrics for assessing risk and performance
- The advantages, drawbacks and impact of capital-raising instruments common to utilities
- Knowledge of equity performance measures, including economic value added (EVA), dividend discount model (DDM), cash flow return on investment (ROI) and key financial risk ratios
- Exposure to the ways utilities utilize hedging and other risk management practices
- A grasp of the effects of regulation and rate cases on a company's financial decision-making frameworks and financial outlook
Your Instructor
Roger Morin, PhD (Primary Instructor)
Dr. Morin is Emeritus Professor of Finance at the College of Business Administration, Georgia State University and Distinguished Professor of Finance for Regulated Industry at the Center for the Study of Regulated Industry at Georgia State University. Dr. Morin is also chairman and CEO of Utility Research International, an enterprise engaged in regulatory economics/finance consulting and formal training activities.
Dr. Morin has taught at the Wharton School of Finance at the University of Pennsylvania, Amos Tuck School of Business at Dartmouth College, Drexel University, McGill University, and Georgia State University, among others. In addition, he has developed and conducted numerous executive development programs for professional trade associations, corporations, and universities. Dr. Morin was a faculty member of Advanced Management Research International, and is currently a faculty member of SNL Center for Financial Education.
He has authored or co-authored several books, monographs, and articles in academic scientific journals on the subject of finance. They have appeared in a variety of journals, including the Journal of Finance, the Journal of Business Administration, International Management Review, and Public Utility Fortnightly. He has published three widely-used treatises on regulatory finance: Utilities' Cost of Capital, Regulatory Finance, and more recently, New Regulatory Finance. His most recent book, Driving Shareholder Value: Value-Building Techniques for Creating Shareholder Wealth, published by McGraw-Hill is widely used as a reference text in executive education training programs.
Dr. Morin has engaged in extensive consulting activities on behalf of numerous Fortune 500 corporations and legal firms in matters of financial management and corporate litigation. He is a leading expert witness in matters of corporate finance, and has appeared as an expert witness in some 200 cases before some 50 federal and provincial/state regulatory boards in United States, Canada, and abroad, including the Federal Energy Regulatory Commission and the Federal Communications Commission.
He holds a Bachelor of Engineering Physics degree, an MBA in Finance from McGill University, Montreal, Canada, and a PhD in Finance and Econometrics from the Wharton School of Finance, University of Pennsylvania.
The full agenda is not yet available for this event.
Follow this event to receive an alert when the agenda becomes available.
Seminar Agenda
DAY ONE8:30 am
Registration and continental breakfast open9:00 am
The Regulatory Process – Overview and Key Issues- Cost of service, revenue requirements and rate cases
- Computation of revenue requirements
- Rate base and rate of return
- Rate case issues in the current regulatory environment
10:00 am
Capital Allocation and Economic Value Creation- Net Present Value (NPV) vs. revenue requirements
10:30 am
Break10:45 am
Risk Analysis and Financial Statements- Accounting vs. economic metrics
- Essential ratios for measuring risk and performance: Interest coverage, fixed charge coverage, dividend payout, ROE, market value-to-EBITDA, ROTC
- Impact of business risk and competition on financial ratios
- Risk profile of utilities
- Influence of unregulated activity
- Impact of the current financial environment
11:30 am
Determining Credit Ratings12:00 pm
Lunch1:00 pm
Rate of Return and Value Creation- Spread and return on invested capital (ROIC)
- Linking capital budgeting and returns
1:30 pm
Cost of Capital and Capital Structure- Understanding risk and return in capital markets
- Modern portfolio theory and asset pricing models
- Cost of equity methodologies and illustrations
- Practical applications illustrated through case study
- Divisional cost of capital – unbundling risk and return across segments: generation vs. transmission vs. distribution
- Appropriate capital structures in a restructured regulatory environment
- Optimal capital structure simulation model
- Case Study: Florida leverage formula
3:00 pm
Day One concludesDAY TWO8:30 am
Continental breakfast opens9:00 am
Utility applications and cutting edge techniques- Contemporary rate of return techniques
- The new performance metrics applied to utilities
- Cutting edge techniques in capital allocation
- Case studies
10:00 am
Break11:30 am
Performance-Based Regulation and financial implications: Alternatives to Traditional Ratemaking- Focused vs. integrated rate of return incentives
- Price cap regulation
- Market basket ratemaking
- Innovative rate mechanisms
12:00 pm
Lunch1:00 pm
Risk-Mitigating Mechanisms and Regulatory Policies3:00 pm
Program concludes
Venue
The venue is not yet available for this event.
Follow this event to be informed when the venue is available and stay informed on other changes.
Who Should Attend this Seminar
Corporate finance, treasury, investor relations or corporate strategy/development professionals at power or gas companies. Professionals in investment banking, project finance or equity-fixed-income research. Traditional asset managers, as well as asset managers and investors at private equity, sovereign and hedge funds. Consultants, accountants and lawyers who advise power and gas clients. Industry regulators and staff. Ratings agency professionals. Others seeking a thorough understanding of corporate finance issues and analyses for regulated utilities
Prerequisites and Advance PreparationThis program presumes an understanding of basic accounting and finance concepts, as well as familiarity with utility business models.
Program LevelBasic level. This fundamental course begins with basic material and then proceeds to the intermediate level.
Delivery MethodGroup-live.
Hotel and Seminar Information
This two-day seminar will be held at the hotel listed below. The seminar will start promptly at 9:00 AM and will finish at 3:00 PM on the first day. On the second day, the seminar will resume at 9:00 AM and will finish at 3:00 PM. The program includes continental breakfast, lunch and all program work materials. Dress is business casual.
Gleacher Center450 North Cityfront Plaza Drive
Chicago, IL 60611
Telephone: (312) 464-8787
View Seminar Location WebsiteBecause of the diversity of hotels found in the area, we will not be holding a block of sleeping rooms with one particular hotel.
