Utility Cost Recovery for Grid Investment: Prudence, CWIP, Riders, Overruns, Abandoned Projects

This CLE course will explore the legal and regulatory issues arising when utilities seek to recover the costs of investment in new generation, transmission, distribution, and grid modernization projects. The panel will examine "prudence" and "used-and-useful" standards, construction work in progress, riders and trackers, cost overruns, and recovery of costs associated with canceled or abandoned projects.

Utilities are accelerating infrastructure investment in energy generation, transmission, and distribution. Recovery of those investments is not guaranteed or automatic. State utility commissions may examine whether the investment was needed, whether the utility acted "prudently," whether the resulting asset is "used and useful," and whether the suggested recovery mechanism fairly allocates costs across customers.

Risks may increase when a project encounters delays, cost escalation, or other developments that undermine the original model assumptions. Projects that are canceled or abandoned before entering service present further recovery challenges. Key is developing an effective record demonstrating the rationale behind management decisions, consideration of available alternatives, thorough project oversight, and more.

Listen as our authoritative panel examines the standards and strategies governing utility cost recovery for major capital investments.