Understanding Depreciation for Electric Cooperatives

Date: Tuesday, May 16, 2023
Time: 02:00 PM ET / 01:00 PM CT / 12:00 PM MT / 11:00 AM PT [Prevailing Time]
Presenters: Larry Feltner, Managing Partner, The Prime Group LLC, Jeff Wernert, Principal, The Prime Group LLC
Moderator: Wayne Sine, CPA, MBA, Director of Education, National Society of Accountants for Cooperatives
Learning Objectives:
1. What’s involved in a Depreciation study, the data needed to complete a study, different methodologies for evaluating depreciation, and how often a cooperative should consider conducting Depreciation studies.
2. Develop a basic understanding of survivor curves (i.e. the “Iowa Curves” used for utility plant)
3. Considerations in the determination of Depreciation Rates including salvage, removal, and failure rates.
4. Learn how Depreciation rates impact retail rates
Field of Study: Accounting
Program Level: Basic
CPE Credit: 1 Credit Hour
Delivery Method: Group Internet-based
Prerequisite(s): No advanced preparation or prerequisites are required for this course.
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Course Description

Depreciation is an often overlooked part of utility accounting which can have a large impact on the retail rates cooperatives charge their members. Appropriately setting depreciation rates can allow the cooperative to collect the capital cost of an asset over the equipment’s useful life equitably from all members. Depreciation rates should be evaluated periodically to ensure that there is an appropriate matching between the recovery of the cooperative’s original cost of plant and the useful economic life of the assets in service. Depreciation studies are the primary tool for cooperatives to evaluate their depreciation rates and make adjustments to ensure this matching takes place. This webinar will go over the details of a Depreciation Study, what data is needed to conduct a study, different methodologies used, how new technologies like LED lighting can impact depreciation, and retail rate-making considerations of Depreciation.

Presenter and Moderator Bios

Presenter: Larry Feltner, Managing Partner, The Prime Group LLC

Larry Feltner is a Managing Partner with The Prime Group LLC. He has more than 30 years of experience in preparing cost-of-service studies, developing retail electric and gas rates and wholesale electric rates, developing line extension policies supported by rates, performing economic evaluations, assisting with the development of depreciation studies, and adjusting depreciation rates, providing support in regulatory proceedings, marketing support, and forecasting and planning. He also conducts training for cooperative boards of directors and staff personnel on cost-of-service studies, rate design, line extension policy, and capital credit policy. Since joining The Prime Group in 2000, his accomplishments include developing performance-based rates, 4-part demand rates, time of use rates, distributed generation rates, net metering rates, community solar rates, electric vehicle rates, standby rates, and developing tracking mechanisms to recover purchased power costs, environmental costs, fuel supply costs, and gas supply costs. He also has experience in designing and negotiating electric and gas special contracts with large industrial and commercial customers.

Presenter: Jeff Wernert, Principal, The Prime Group LLC

Jeff Wernert is a Principal with the Prime Group. Since joining The Prime Group in 2009, Jeff has performed numerous cost-of-service studies for utilities across the country, developed retail and wholesale electric rates for dozens of utilities, unit cost analyses for unbundled and time-differentiated rate designs and four-part rates, assisted with the development of depreciation studies and adjusting depreciation rates for cooperatives, assisted in retail rate case filings in Kentucky, Indiana, and Maryland participates in a number of industry stakeholder groups for G&Ts across the US, and made several presentations to cooperative utility Boards, trade groups and member meetings for cooperatives.

Moderator: Wayne Sine, CPA, MBA, Director of Education, National Society of Accountants for Cooperatives

Wayne Sine is an experienced and highly knowledgeable professional in the field of Tax. Wayne recently retired as Tax Director from his company, Southern States Cooperative. He has extensive experience working with agricultural cooperatives and has been a long-time member of the NSAC. He is extremely active in the NSAC, serving as both past Chapter President of the Atlantic Chapter, and past Chair of the Tax Committee, and is currently serving as the NSAC Director of Education.. Wayne's career is marked by several accomplishments, and he has always been involved in many organizations, spreading his knowledge. Wayne is a member of the Legal, Tax, and Accounting (LTA) Committee for the National Council of Farmer Cooperatives. He is also Past Chair of both the Tax Committee of the Virginia Chamber of Commerce and the Virginia Manufacturers Association. Wayne also served on the Tax Policy Committee at the Virginia Society of CPAs and served as past Region Vice President for the Tax Executives Institute.

Cost
Free for NSAC Members / $56.00 for Non-Members

Delivery System

• All programs are delivered using the Zoom platform.
• Confirmations will include log-in instructions.
• Participants are able to participate using any device with an Internet connect (if the device does not have speakers, the participant can also dial-in) or they can participate with audio only by dialing in.
• All registrants will receive a link to the CLN’s recording by email within 48 business hours of event’s conclusion.
• There will be assistance available to help with technical and connectivity issues up to 10 minutes prior to the start of the presentation.

Registration

All registration is done on-line and each guest must provide their name and email address to participate. All NSAC members may register for free. Non-members may register for a nominal fee.

Refund Policy

NSAC will not issue refunds for CLNs. If a registrant is unable to participate in the CLN and provides notification to info@nsacoop.org 48 hours prior to the session, a credit will be provided for a future CLN. Alert the NSAC staff member monitoring the CLN if technical difficulties are encountered and technical support will be provided to eliminate problems with future CLNs.

Additional Information

Live participation is required for CPE credit and polling questions must be answered to document your active participation. All registrants will receive an email following the session with links to the slides and/or handouts, and a link to the CLN recording (unless otherwise stated). If you are unable to participate in the live session, you can still watch the recorded session, but you will not be eligible for CPE credits. Those eligible for credits will receive their certificate by email with 7 business days.

For more information regarding NSAC CLNs or administrative policies such as complaint and refund, contact the NSAC Headquarters, 7946 Clyo Road, Suite A, Centerville, OH 45459, 937-222-6707, or info@nsacoop.org.