Berkeley Lab, with funding support from the U.S. Department of Energy’s Energy Transitions Initiative (ETI), developed a user-friendly Microsoft Excel-based pro-forma electric utility financial model. The Standardized Utility Pro-forma Financial Analysis (SUPRA) tool provides regulators, policymakers, utilities, and third-party development organizations in island and remote communities with a relatively simple and publicly accessible financial analysis tool to better assess island utility opportunities to manage, mitigate, and/or improve its financial situation, and quantify the financial impacts from pursuing changes to its regulatory and business model. SUPRA’s functionality includes the following:
- Up to ten (10) different characterizations representing municipal and/or investor-owned utilities;
- Development of an annual revenue requirement for a ten (10) year analysis period based on a variety of different operating, maintenance, and capital cost categories, each characterized by a first year value and an independent compound annual growth rate;
- Identification of major capital asset additions and retirements;
- Feedback effects between certain utility costs and changes in retail sales or peak demand due to customer adoption of distributed energy resource (i.e., energy efficiency, demand response, solar photovoltaic systems, electric vehicles);
- Rate setting for up to four (4) customer classes during user-identified scheduled general rate cases that incorporate current/historic test year data as well as regulatory lag;
- Application of utility surcharges, revenue adjustment mechanisms, and other types of balancing accounts to ensure more timely recovery of utility incurred costs (e.g., fuel adjustment clauses, revenue decoupling mechanisms);
- Implementation of utility or third-party incentive programs to promote customer adoption of distributed energy resources;
- Implications from catastrophic events (e.g., hurricanes) on utility costs and collected revenues;
- Quantification of the utility’s financial health including cash position, debt service coverage, and days liquidity, as well as earnings and return-on-equity for investor-owned utilities; and
- Ability to directly compare the 10-year present-value of key utility physical and financial metrics for any two (2) of the developed utility characterizations.
SUPRA is based on a more extensive and robust pro-forma financial model (FINDER) developed by Berkeley Lab in 2015. Berkeley Lab researchers have used FINDER in a number of research projects over the past several years as well as several technical assistance activities with various state regulatory agencies and energy offices (e.g., AZ, NV, MA, MI, MN).