GUERNSEY’S economists and financial analysts provide expert cost of capital testimony for a broad group of clients in many regulatory jurisdictions. Our analysts evaluate the effects of the current economic environment, regulatory and financial theory, cost of equity, cost of debt, return, capital structure, financial integrity, market structure, industry structure, business and financial risks, incentive regulation and deregulation policies on the total cost of capital.

We provide complete rate case services including direct and rebuttal expert testimony, cross-examination and deposition support, data request responses, support in preparing petitions, responses, briefs, and interaction with legal counsel and commission staff when necessary. GUERNSEY consultants are familiar with recognized cost of capital methodologies such as the discounted cash flow methods, the capital asset pricing model, risk premium models, the arbitrage pricing model and comparable earnings analysis.

Angie Salyer 405-416-8203

Relevant Projects:

GUERNSEY’s costs of capital experts have provided testimony in the following jurisdictions:

Federal Power Commission
Federal Energy Regulatory Commission
Interstate Commerce Commission
Alabama Public Service Commission
Alaska Public Utilities Commission
Arizona Corporation Commission
Arkansas Public Service Commission
Colorado Public Utilities Commission
Florida Public Service Commission
Georgia Public Service Commission
Illinois Commerce Commission
Iowa Commerce Commission
Kansas Corporation Commission
Kentucky Public Service Commission
Louisiana Public Service Commission
Maryland Public Service Commission
Missouri Public Service Commission
Michigan Public Service Commission
Nebraska Public Service Commission
New Mexico Public Service Commission
New York Public Utilities Commission
Power Authority of the State of New York
Nevada Public Service Commission
North Carolina Utilities Commission
Oklahoma Corporation Commission
South Carolina Public Service Commission
Tennessee Public Service Commission
Tennessee Regulatory Authority
Texas Public Utilities Commission
The Texas Railroad Commission
The Virginia Corporation Commission
The Public Service Commission of Wyoming

Related Publications:

The following are examples of publications which are relevant to our cost of capital studies:

“Gas Distribution: Now a Higher-Risk Business,” Public Utilities Fortnightly, September 1, 2002, Cicchetti, Mark A.

"Irregular Incentives," Public Utilities Fortnightly, June 15, 1993, Cicchetti, Mark A.

"Utility Allowed Returns and Market Extremes," Public Utilities Fortnightly, March 1, 1993, Murry, Donald A., Gehuang, D. Nan and Harrington, Bryan M.

"The Quarterly Discounted Cash Flow Model, Effective and Nominal Rates of Return, and the Determination of Revenue Requirements for Regulated Public Utilities," National Regulatory Research Institute Quarterly Bulletin, June 1989, Cicchetti, Mark A.

"Adjustments to the Capital Structure:  Pro-Rata versus the Tracing of Funds," FPSC Working Paper, March 1986, Cicchetti, Mark A.

"Reconciling Rate Base and Capital Structure: The Balance Sheet Method," Public Utilities Fortnightly, June 27, 1985, Cicchetti, Mark A.

Other Related Publications:

“Equality of Interest Rates Revisited: The Multi-Country Evidence,” Forthcoming in International Economic Journal, Zhu, Zhen with Chiou Wei Song Zan.

"Time-Varying Forward Bias and the Expected Excess Returns," Journal of International Financial Markets, Institutions and Money, 2002, Zhu, Zhen.

"Sources of Export Fluctuations: Empirical Evidence From Taiwan and South Korea, 1981-2000," with Chiou Wei Song Zhang, Journal of Asian Economies, 2002, Zhu, Zhen.

"Are Long-Term Bond Yields Excessively Volatile?" Journal of Economic Studies, Vol. 28, No. 4, pp 433-445, 2001, Zhu, Zhen.

"The Effect of Exchange-Rate Risk on Exports: Some Additional Empirical Evidence," Journal of Economic Studies, Vol. 28, No. 2, pp 106-121, 2001, Zhu, Zhen.