expertise
UTILITY REGULATION
Alternative Regulation
Overview
The term Alternative Regulation (Altreg) encompasses a wide range of alternatives to the traditional Cost of Service (COS) approach to utility regulation, where base rates are reset only in periodic rate cases. Performance based regulation (PBR) is the most common form of Altreg around the world today. The basic idea is to weaken the link between a company's rates and its own unit cost so that returns are more sensitive to performance. Strengthened incentives and lessened concerns about cross-subsidies can permit regulators to sanction greater operating flexibility. Plan parameters can be calibrated to share the benefits of better performance with customers. Utilities can earn superior returns for superior performance.
A variety of mechanisms are available to craft PBR plans. Some permit automatic rate adjustments for changing business conditions and thereby facilitate extension of the period between rate cases. Others permit a utility's rates to be trued up only partially to a utility's current costs. As one example, allowed gas cost can be based partly on a company's actual cost and partly on an external benchmark. As another, efficiency carryover mechanisms can help a utility avoid a full trueup of its revenue requirement to its cost (during the rate case that concludes a PBR plan) so that they can keep some of the benefits of efficiency gains achieved during the plan.
Recent developments have increased the potential contribution of PBR to the economy. Economic forces are placing upward pressure on the unit cost of utility operations.
- The long slide in interest rates from the peak levels of the 1980s has ended.
- Input price inflation volatility has increased.
- Growth in sales per customer has slowed and for many gas utilities, actually declined.
- Many utilities are boosting plant construction.
Under cost of service regulation, utilities will under these conditions file more frequent rate cases that raise regulatory cost and weaken performance incentives. The last time these conditions were prevalent (from 1974 to the mid 1980s) America's utility industry experienced a costly slowdown in productivity growth that led, ultimately, to the restructuring of much of the U.S. electric power industry. With nations overseas showing stronger commitments to PBR and power market competition, North America today runs the risk of a "productivity gap" that can erode its competitive position.
In North America , formal PBR plans have been approved for energy utilities in diverse jurisdictions.
| Alberta | Michigan | |||
| British Columbia | Missouri | |||
| California | Mississippi | |||
| Connecticut | Minnesota | |||
| Florida | New York | |||
| Idaho | Ontario | |||
| Illinois | Oregon | |||
| Kentucky | Quebec | |||
| Louisiana | Rhode Island | |||
| Maine | South Dakota | |||
| Maryland | Tennessee | |||
| Massachusetts | Washington |
The Federal Energy Regulatory Commission (FERC) and Canada's National Energy Board (NEB) use PBR to regulate oil pipelines. Many other North American energy utilities have operated under less formal mechanisms that substantially relax the cost of service link. These include the extended rate freezes under which many utilities operated under the terms of power market restructuring plans. PBR is used even more extensively in North America to regulate telecommunications, utilities and railroads. Overseas, the privatization of many utilities has in the last 15 years forced governments to choose a regulatory system. The majority have chosen PBR over cost of service regulation. Countries such as Britain and Australia are recognized as PBR leaders.
- Gas procurement PBR provides many local distribution companies with protection from price volatility without the high prudence risk that comes with rapid cost passthroughs. This advantage is potentially useful in the regulation of power and fuel purchases by electric utilities.
- PBR helps railroads and telcos serve markets with diverse competitive pressures from a common set of assets. This advantage of PBR can help power distributors pursue efficient diversification into businesses, such as broadband in power lines (BPL), where the realization of scope economies from shared inputs is a key to success.
Revenue Decoupling
Revenue decoupling is an approach to Altreg that has been used for two decades in North American utility regulation. In a decoupling plan, rates are reset periodically to ensure that a company's revenue matches its revenue requirement. This makes utility finances less sensitive to the slowdown in use per customer that can accompany high energy prices and/or aggressive demand side management (DSM) programs. Utilities are therefore more likely to embrace DSM. A well designed decoupling mechanism can help utilities avoid frequent rate cases that might otherwise be triggered by slow volume growth. Automatic adjustments for DSM reduce the need for exact estimates of DSM savings in rate hearings. Decoupling is also more effective than alternative approaches, such as straight fixed variable pricing, in promoting energy conservation.
Decoupling plans usually involve a revenue adjustment mechanism (RAM) that escalates the revenue requirement in the absence of a rate case. Five approaches to RAM design have been established.
- Under a revenue per customer (RPC) freeze, revenue per customer is fixed for the term of the plan. The revenue requirement then grows automatically with the number of customers served. The formula may apply to the total revenue per customer or individual rate classes. This is the single most popular approach to decoupling today. Although used primarily by gas distributors (e.g. Baltimore G&E), who experience declines in average use, it is now used as well by electric utilities in Idaho and Maryland. RPC freezes don't compensate utilities for input price inflation, which has accelerated substantially in recent years. As a consequence, many utilities operating under RPC freezes have been compelled to file frequent rate cases. The other four approaches to RAM design that we describe do not have this failing.
- Under revenue per customer indexing, the allowed revenue per customer is subject to automatic escalation for price inflation. This can in principle be accomplished by having a company's cost per customer rise at the average rate of a suitably chosen peer group. However, most RPC indexes approved to date have relied on the theoretical result that the growth in cost per customer is the difference between input price and productivity growth. These indexes have inflation - X formulas, where X reflects a productivity target and also corrects for any inaccuracy of the chosen inflation index as a measure of energy utility input price inflation. This approach has a solid scientific foundation and is apt to generate considerably more attrition relief than a revenue per customer freeze. Utilities who have operated under this kind of RAM include Enbridge Gas Distribution, Southern California Gas, and Vermont Gas Systems.
- Under the “inflation-only” approach to RAM design, the revenue requirement is adjusted only for growth in a familiar macroeconomic inflation measure such as the Gross Domestic Product Price Index. This is tantamount to a revenue per customer index in which X is set equal to customer growth. This approach has been approved for use in decoupling plans for Southern California Gas, and the gas and electric services of Pacific G&E and San Diego G&E.
- Under the “all-forecast” approach, revenue requirement escalation depends on a multi-year forecast of the growth in total cost. This is tantamount to a rate case with multiple forward test years. The revenue requirement in the “out” years is usually scheduled to rise in a “stair-step” pattern. This approach to RAM design has been used extensively in California and is now being used in New York state. It has the disadvantage of being non-responsive to unforeseen hyperinflation.
- Under the “hybrid” approach to RAM design O&M expenses are typically escalated using an index, whereas capital cost escalation is based on a multi-year forecast. This general approach has been the third most popular overall and has been used chiefly by California utilities.
Revenue decoupling has been a major focus of our recent work. PEG personnel have filed testimony in support of 6 approved decoupling mechanisms to date. A special strength is the design of revenue per customer indexes.
Altreg for Major Plant Additions
Many utilities today need to make major plant additions to replace aging assets and/or meet demand growth. Major additions to generation plant are most common and these are especially risky in an era of volatile energy prices and changing climate policy. Under COS regulation, major plant additions can cause rate shock and subject utilities to a risk of prudence disallowance that isn't matched by a high allowed rate of return.
- Expensing of preconstruction costs
- Advanced approval of construction plans
- Guaranteed recovery of approved capital costs
- Formula rates
- Capital spending trackers
Rate trajectories can be sculpted to smooth the impact of plant additions on customers. Mitigation of rate shock is facilitated when capital cost recovery is guaranteed so that utilities can recover cost more evenly over the years. Major plant additions can also be facilitated by increasing the expected return from investment. This can be achieved via rate of return premia, competitive bidding to establish capex budgets, incentivized capex budget caps, and innovative generation pricing deals such as California's (expired) plans for nuclear plants.
A central challenge in the regulation of vertically integrated utilities today is securing funding for needed major plant additions while maintaining strong performance incentives. PEG believes that funding for major plant additions can be embedded in multi-year rate plans that generate strong incentives using the all forecast or hybrid approaches to the design of attrition relief mechanisms that we describe in the decoupling section above. The design of O&M escalation indexes used in the hybrid approach is a company specialty.
PEG Capabilities
PEG possesses North America's most experienced staff of energy Altreg consultants. Our Madison office alone has over forty man-years of Altreg experience. We routinely extend the frontier of PBR with cutting edge research. Applications we have worked on include most major services furnished by energy utilities:
- ELECTRIC POWER: Transmission, Distribution, Customer Care, Energy Procurement, and Bundled Power Service
- NATURAL GAS: Transmission, Distribution, and Procurement
Many of the leading PBR jurisdictions in the world are now located overseas. PEG is active in many of these venues, including Australia, Britain, and Canada. We are also committed to sharing our expertise with less developed countries.
Plan Design
PEG has helped many energy utilities design PBR plans. We have worked on a variety of PBR mechanisms:
- Price caps
- Revenue decoupling
- Earnings sharing mechanisms
- Service quality and other benchmark incentive mechanisms.
We are not wedded to any single approach to Altreg and are committed to helping our clients find the approach that makes sense for them. Our plan design services include the monitoring of Altreg developments across utility industries and around the world. This includes Altreg for major plant additions. Clients can quickly access our extensive collection of Altreg documents.
Incentive Power Model
The benefits to utilities from alternative regulatory systems are critical issues in Altreg plan design and advocacy. Utilities care about earnings levels and risk. Customers care about price levels and stability. In research for several clients, PEG has developed a sophisticated model to quantify these impacts of regulation for alternative concrete regulatory systems. For each system considered, the model generates results for:
- Strength of incentives
- Earnings
- Customer benefits
Using a sophisticated optimizing algorithm, we have modeled how rational companies respond to several key features of regulatory systems. These include:
- Plan Term (e.g. 2 - 10 years)
- Rate Reset Provisions (e.g. full rate case, interplan benefit sharing)
- Earnings sharing mechanisms (e.g. symmetric vs. asymmetric, deadbands)
The model also considers how a utility's response to a regulatory system differs for different kinds of performance incentives. For example, it can consider how responses vary with the up front costs and project payback periods. Our results show that if the Altreg plan is not designed appropriately, some initiatives will not be pursued and utilities and their customers will both lose. Results can also help managers plan for success under Altreg. For example, preliminary results suggest that some of the biggest benefits of a Altreg plan may not be realized unless there is timely implementation.
Our Incentive Power model can help clients appraise established regulatory options, identify promising new options, and present supportive evidence.
Empirical Research
Altreg plans often require a solid foundation in empirical research. We have undertaken a wide range of Altreg-related empirical work, including the calculation of industry input price and productivity trends for many utility services. PEG personnel have provided the research supporting many approved indexing plans for energy utilities. We are currently placing service quality Altreg on a comparably scientific foundation. For example, we have developed deadbands for service quality mechanisms that are based on rigorous statistical tests of change in quality performance.
Regulatory Support
A sound regulatory strategy is essential to the ultimate success of a PBR initiative. PEG provides a full range of regulatory support services, from involvement in technical and settlement conferences to expert witness testimony. Our experience as expert witnesses in PBR proceedings has no rival in the consulting industry. Our record goes beyond appearances on the witness stand to include the achievement of solid results for clients.
Publications and Public Appearances
PEG has organized, chaired, and sponsored a series of highly acclaimed national forums on PBR. We have also helped the Edison Electric Institute and the American Gas Association organize PBR conferences. Contact us if you need a speaker on PBR issues. PEG personnel have also made a number of contributions to the literature on PBR, including influential white papers for EEI and the Electric Power Research Institute. Articles have been published in respected professional journals.
Benchmarking
What is Statistical Benchmarking?
Statistical benchmarking is a scientific approach to performance measurement that makes extensive use of data on utility operations. Indicators are chosen that reflect important dimensions of company performance. Company values are then compared to benchmarks that reflect the performance of other utilities. The change in a company's performance over time can also be measured.
Benchmarking has long been used by utility managers, including Boards of Directors, to appraise operating efficiency. Today, it is also playing a role in regulation. Utilities, intervenors, and regulators have all used benchmarking to appraise the reasonableness of recent historical cost and forecast test year cost projections. The results can be used to help set current rates and the out-year provisions of multiyear rate plans. Companies investing in utilities overseas are especially likely to encounter this approach to regulation.
PEG Experience
PEG is a leading consultant on statistical benchmarking for energy utilities. Our personnel first testified on benchmarking in 1992, and pioneered the use of advanced benchmarking techniques in North American regulation. PEG partner Mark Newton Lowry has chaired several benchmarking conferences. Our methods are also useful in management since they produce the most accurate performance measures available. We can help managers track trends in their company's performance and identify areas of strength and weakness.
Available Methods
PEG has developed a range of sophisticated benchmarking tools.
Unit Cost Indexes Unit Cost metrics are most commonly used in North American utility cost benchmarking. A unit cost index is the ratio of cost to a measure of operating scale. It facilitates cost comparisons between companies with different operating scales.
Productivity Indexes A productivity index is the ratio of an output and an input quantity index. A productivity trend index captures the change in a company's cost over time that is not due to changes in its input prices or operating scale. Productivity level indexes capture differences in the costs of sampled companies that are not due to differences in their input prices or scale. Since input prices and operating scale are major cost drivers, productivity indexes are useful measures of operating efficiency. They permit the use of data from companies facing different input prices and operating scales in benchmarking a company's efficiency. Since a company's cost rises with input price inflation, productivity indexes are also useful in helping companies gauge changes in their operating efficiency.
Productivity indexes are widely used in government and industry as performance measures. They are most commonly employed to measure performance trends over time. For example, they can measure the annual productivity growth of a company and compare it to that of other companies in a specified region. This is a great way to appraise the ongoing success of efficiency initiatives.
Productivity indexes can be calculated at various levels of detail. Total factor productivity (TFP) indexes summarize the efficiency with which all inputs of a company are utilized to provide a bundle of services. While partial factor productivity indexes can address the productivity of specific input groups (e.g., O&M expenses).
Econometric Cost Models An econometric cost model explains the relationship between utilities' costs and an array of quantifiable business conditions in their service territories. Model specifications are guided by economic theory. Model parameters are estimated using historical data on the costs and business conditions of a sample of utilities. Statistical tests can be used to ensure that the model contains only significant cost drivers. The model can then be used to predict a utility's past, current, or future cost level given its exact business conditions. This reduces the need to choose a peer group of companies. Models can also be used to predict the change in a company's cost given the expected change in local business conditions.
-
Econometric cost models have important advantages over productivity indexing in performance measurement.
- The model can consider the impact on cost of a wider array of business conditions than can be integrated into a productivity study. Examples include the extent of undergrounding of a power delivery system and whether companies distribute both gas and electricity.
- Statistical tests can be conducted of hypotheses regarding deviations from efficiency norms. Confidence intervals used in these tests reflect, as they should, the size of the sample and the success of the cost model in explaining the variations in cost in the historical sample.
Experienced benchmarkers will have encountered the challenge of deciding which measure of output should be used in efficiency research. A distributor, for instance, may find that it stacks up much better on a cost per customer basis than on a cost per line mile or volume delivered basis. The output quantity indexes we use in our benchmarking work help to finesse this problem. These feature multiple output quantity measures with weights that reflect their relative importance as drivers of utility cost.
Capital Measurement Capital accounts for the largest share of the cost of most utility services and is the dominant share of the cost of "wire and pipe" businesses. Capital cost containment is therefore the single most important dimension of long run utility operating efficiency. Many benchmarking vendors nonetheless focus only on O&M expenses due to the difficulty of comparing capital costs across utilities. These studies take little account of the amount of capital utilized even though it has a major impact on the amounts of O&M inputs used. PEG uses rigorous capital measurement methods that can surmount this barrier to efficiency measurement. These methods take account of the differences between companies in the age of plant and the cost of plant construction.
Econometric Quality Models The service quality of utilities also varies with the business conditions they face. Business conditions influencing quality are often volatile. Thus, quality should be expected to vary between utilities and to change from year to year at the same utility. PEG has developed econometric quality benchmarking models that predict the quality level of a utility given local business conditions. We have also developed scientific tests of change in quality effort. These state of the art services are useful in setting quality targets and in evaluating the prudence of quality effort.
Other Methods Other benchmarking methods, including data envelopment analysis (DEA), are sometimes used in the regulatory arena. PEG personnel are thoroughly familiar with DEA and can advise clients on the comparative advantages of alternative benchmarking methods.
Applications
PEG can provide index and econometric cost benchmarking studies for all of the major services of gas and electric utilities and relevant combinations thereof.
-
ELECTRIC POWER
- Power Generation
- Supply (Generation & Power Procurement)
- Transmission
- Local Delivery
- Customer Care
- Distribution (Local Delivery and Customer Care)
- T&D (Transmission, Local Delivery, and Customer Accounts)
- Bundled Power Service
- Reliability
-
NATURAL GAS
- Transmission
- Storage
- Local Delivery
- Customer Care
- Distribution (Local Delivery and Customer Care)
- Integrated Transmission, Storage, and Distribution
- Procurement
For each service, studies are available for detailed cost categories as well as for total cost and we can appraise performance on both a level and growth rate basis.
Benchmarking Workshops
Many clients today want to strengthen their in-house benchmarking capabilities. PEG can conduct benchmarking workshops to help staffers new to benchmarking get up to speed and to sharpen the skills of more experienced staffers. Workshops can be held on site, at our Madison or Pasadena offices, or at an attractive retreat location. PEG can also provide necessary data for effective benchmark research.
Expert Witness Testimony
PEG personnel have testified on benchmarking for some of North America's best known utilities. Utilities have also submitted our research to regulators overseas, where formal rate cases are rare. Impressive results have been achieved for clients in several instances.
Other Statistical Cost Research
PEG's expertise in statistical cost research has a number of other useful applications in utility regulation.
Cost Forecasts
Indexes and econometric models are both useful in the preparation of cost forecasts for internal budgeting and forward test years. For example, it is well established that
Growth Cost = Growth Input Prices - growth Productivity + growth Output
PEG can prepare utility specific input price indexes, output metrics, and tough, but attainable productivity targets that permit custom forecasts of O&M expenses and total cost. A formula of this kind, developed by PEG, is currently used to establish O&M budgets for power distributors in Australia. This research is also useful for quantifying the financial attrition that results from historical test years and delays in making rate case decisions.
Rate Design It is generally understood that energy distributor rates don't accurately reflect the manner in which output growth affects costs. More cost-causative rates would feature higher customer charges and lower volumetric charges. Evidence to make this case traditionally relies on cost allocation research. This kind of research often leads to haggling over the inherently arbitrary allocation of common costs. PEG has developed a rigorous and defensible new way to estimate the long run marginal cost of customer and volume growth. This can be a useful supplement to other kinds of rate design evidence. Our method involves the estimation of a (long-run) cost function that include customers and volumes as output variables. The research uses well-established statistical methods and historical data on the cost of U.S. utilities and the cost drivers that they faced.
Scale Economies Estimates of economies of scale and other aspects of the cost structure of utility services have uses in power distribution management and regulation. For example, we helped the Comision Reguladora de Energia in Mexico decide how many gas distributors to create in Mexico City. Our research was nominated for an award for the best applied economic research in that country.
Code of Conduct Issues
PEG personnel have been active in fashioning public policies regarding utility company diversification into competitive markets and codes of competitive conduct. We have authored several Edison Electric Institute white papers on these issues, including The Cost Structure of Power Distribution, Branding Electric Utility Products: Analysis and Experience in Regulated Industries, and Controls for Cross-Subsidization in Electric Utility Regulation. Our brand names paper was filed in a California code of conduct proceeding and has been credited with influencing the CPUC's decision on the brand name issue. We have testified in support of relaxed restrictions on utility diversification in Wisconsin.
Industry Structure
The efficient structure of the energy industries has been a key policy issue for nearly two decades. PEG personnel have performed several pathbreaking studies that shed light on this issue.- For Mexico's energy regulatory commission, we prepared a study of future scale economies in gas distribution that supported their decision to establish two franchises in metropolitan Mexico City.
- For the Edison Electric Institute (EEI) and the National Electricity Distribution Forum of Australia, we have written white papers on the cost structure of power distribution.
- For a group of Massachusetts power distributors, we prepared a study and filed comments on scale economies in local power delivery, metering and billing.
- For Hawaiian Electric, we have studied and testified on the natural monopoly characteristics of Hawaiian power markets.
- For Western Power, we have studied the natural monopoly characteristics of the power industry of western Australia. We have also performed a critical examination of problems with retail competition initiatives around the world.
- We have written two white papers for the Edison Electric Institute (EEI) on metering and billing competition.
- We have written white papers on the cost structure of power distribution for the Edison Electric Institute and the Electricity Supply Association of Australia.
INTERSTATE Gas Transmission
PEG personnel are active in gas transmission proceedings before the Federal Energy Regulatory Commission (FERC) and Canada's National Energy Board. We provided econometric models, market power analyses, and expert testimony in the first FERC case where an interstate natural gas pipeline successfully received authority to charge market-based rates. We recently testified in a proceeding on alternative plans to expand gas transmission capacity to Wisconsin.
Mergers and Restructurings
As two major forces, competition and consolidation, alter the landscape of utility operations, PEG has been in the forefront helping companies develop and implement effective business and regulatory strategies. We have specialized software and analytic tools to aid in strategic decisions. These include:
- Models to estimate cost and revenue synergies related to mergers.
- Models to prepare pro forma balance sheets, income statements and cash flow statements for merging companies, both with and without projected synergies and merger related costs.
- Share price and dividend models to track the various merger components and to provide valuable information to boards of directors and senior management as to a potential merger's accretive or dilative effects.
We have developed complex marketing and demand analyses for utilities moving from regulated to competitive markets. In most of these cases, PEG provided expert testimony before either state or federal regulatory commissions, or both. We have developed presentations for boards of directors and upper management identifying the strategic issues involved in moving from a regulated to a competitive environment, and assisted in developing appropriate strategies for implementing these changes.
For several utility and non-utility clients, we have identified and screened potential merger candidates and acquisition targets in the United States and abroad. We have analyzed the financial aspects of potential mergers and issued fairness opinions. We have analyzed and provided expert testimony regarding vertical and horizontal market power issues related to mergers.
Rate of Return Analysis/WACC
PEG is often asked to determine a just and reasonable Return on Equity (ROE) as well as a Rate of Return (ROR) and Weighted Average Cost of Capital (WACC). In addition to our work in the United States, our experience includes international/country risk adjustments for various nations in Latin America and Asia. PEG uses these analyses for regulatory proceedings, due-diligence, and forming opinions.
Other Utility Services
PEG personnel have addressed a wide variety of additional issues in utility regulation. Here is a partial listing.
- Gas and power purchase contracts
- Hydroelectric relicensing
- Natural gas storage
- Rate design
Civil Litigation
PEG has provided litigation support in several fields, including antitrust, intellectual property, taxation, health, and the environment. The Pasadena office has taken the lead in this field. Our effectiveness in litigation is enhanced by our expertise in such varied industries as agriculture, automobiles, computers, electronics, electric power, food processing, metals, natural gas, oil pipelines, petroleum, petrochemicals, pharmaceuticals, pesticides, postal services, retailing, real estate, cable, and telecommunications.
We strive to ensure that we have no stake in the matters for which we are retained. This enables us to apply objective ideas and analyses to the issue at hand. We have not limited our practice to working for only plaintiffs or defendants. For example, we have worked for defendants against claims brought by the government in tax and other courts, and we have worked for the government in antitrust matters and cases involving a bankÂ’s failure to properly escheat unclaimed bond funds to the state government. We have worked for environmental groups and have defended industrial clients against inappropriate environmental damage claims brought by both private and public plaintiffs. We have developed damage analyses for plaintiffs in patent infringement and other intellectual property cases. We have also provided defense testimony in intellectual property cases, exposing flawed damage analyses presented by opposing experts. PEG also has extensive expertise in designing surveys and critiquing surveys used in a wide variety of litigation and management consulting situations.
The use of econometric methods in litigation support is a PEG specialty. Partner Jeff Dubin is an Adjunct Full Professor of Economics at UCLA's Anderson School of Business where he teaches econometrics. He is supported by a talented staff that includes our PhD econometrician, Lullit Getachew.
Antitrust and Market Power
PEG has provided expert testimony and analysis in a variety of antitrust and market power cases. We have addressed a wide-ranging set of issues, including but not limited to allegations regarding monopolizing open heart surgery in a Wisconsin hospital, price fixing allegations on a natural gas pipeline, unfair marketing allegations involving an electric utility merger, market power analyses for oil pipelines, natural gas pipelines, and energy marketers, price consequences of mergers (cardio ultrasound equipment and bakeries), and price fixing in the corn-syrup manufacturing industry.
Contract Disputes
PEG personnel have provided expert analysis and testimony in a wide range of contract disputes, providing independent analyses for both plaintiffs and defendants.
Copyright and Patent Infringement
PEG personnel have provided expert analysis in many copyright and patent infringement cases. We have ascertained damages in disputes ranging from the similarity in greeting card design to instant cameras to micro motors used in automobiles and small appliances.
Environment
PEG has extensive experience in natural resource damage assessments. Our personnel have worked in more than a dozen cases critiquing government sponsored contingent valuation models (CVM), hedonic property analyses, and stigma effects, travel cost models, habitat equivalency analyses (HEA), and more. PEG also performs alternative damage assessments, and designs counter surveys. Our work for clients has drawn on the academic research of Drs. Cicchetti and Dubin.
Preservation and Development
PEG personnel have been involved in several high profile disputes over preservation vs. development. These have ranged from issues concerning placement of telephone wires across historical sites to the development of new ski areas to the optimal sitting of the Trans Alaska Pipeline.