research Market Intelligence /marketintelligence/en/news-insights/research/average-u-s-electric-gas-roe-authorizations-in-h1-18-down-from-2017 content
BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
PRIVACY & COOKIE NOTICE
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *

* Required

In this list

Average U.S. Electric, Gas ROE Authorizations In H1'18 Down From 2017

Power Forecast Briefing: As retirements accelerate, can renewable energy fill the gap?

Power Forecast Briefing Discusses Improved Spark Spreads and Profitability Projections for ERCOT and PJM

Power Forecast Briefing Examines How Three Key U.S. Power Markets Are Impacted by Retiring Capacity


Average U.S. Electric, Gas ROE Authorizations In H1'18 Down From 2017

Highlights

The average ROE authorized in cases for electric and gas utilities decided during the first half of 2018 was lower than the averages seen in cases decided during calendar 2017.

Aug. 02 2018 — The average return on equity authorized electric utilities in rate cases decided in the first two quarters of 2018 was 9.65%, somewhat below the 9.74% average for cases decided in calendar 2017. There were 26 electric ROE determinations in the first six months of 2018 versus 53 in the full year 2017.

This data includes several limited issue rider cases; excluding these cases from the data, the average authorized ROE was 9.58% in rate cases decided in the first half of 2018, somewhat below the 9.68% average for the full year 2017. The difference between the ROE averages including rider cases and those excluding the rider cases is largely driven by ROE premiums of up to 200 basis points approved by the Virginia State Corporation Commission in riders related to certain generation projects.

For vertically integrated electric utilities, the average ROE authorized was 9.72% in cases decided during the first half of 2018 versus 9.8% for cases decided in calendar-2017. For electric distribution-only utilities, the average ROE authorized in the first half of 2018 was 9.18% versus 9.43% in all of 2017.

The average ROE authorized gas utilities was 9.55% in cases decided during the first two quarters of 2018 versus 9.72% in full year 2017. There were 13 gas cases that included an ROE determination in the first six months of 2018, versus 24 in full year 2017. RRA notes that the 2017 data includes an 11.88% ROE determination for an Alaska utility. Absent this “outlier,” the 2017 gas ROE average is 9.63%.

In the first six months of 2018, the median authorized ROE in all electric utility rate cases was 9.6%, unchanged from full year 2017. For gas utilities, the median authorized ROE in cases decided in the first six months of 2018 was 9.5% versus 9.6% in 2017.

Over the past several years, the persistently low interest rate environment has put downward pressure on authorized ROEs. As shown in the graph below, the annual average ROE has generally declined since 1990 and has been below 10% for electrics since 2014, and below 10% for gas utilities since 2011.

Contact us to access more regulatory research, deep asset-level data, and industry monitoring solutions.

Learn more about our regulatory coverage
Request Demo

The Times They Are A-Changin' – A New Era For FERC And Transmission ROEs?

Learn More

Offshore Wind Ready To Take Off In The United States

Learn More