Expert Witness Services
Mr. Baryenbruch acts as an expert witness on financial matters for utility clients in their regulatory proceedings. In particular, Mr. Baryenbruch is an expert on utility/affiliate relations. He has presented testimony on the fairness of utility/affiliate relations in approximately 50 rate cases for 30 utility clients before 14 state public utility commissions. Several utility clients also use Mr. Baryenbruch’s affiliate transactions evaluation as the mechanism for demonstrating on-going compliance in annual reports to their regulators.
Mr. Baryenbruch’s expertise covers the following types of client utility/affiliate transactions:
- Service Company – Corporate services such as executive management, information technology, finance, human resources, legal and supply chain.
- Regulated Operating Utility Affiliates – Shared services such as operations and maintenance activities.
- Unregulated Affiliates – Unregulated services that may be delivered to the customers of regulated utility affiliates.
- Shared IT Infrastructure – Shared use of the enterprise IT infrastructure and application systems.
- Shared Facilities – Buildings, equipment and infrastructure whose use is shared by regulated and unregulated affiliates.
Aspects of Mr. Baryenbruch’s assessment of affiliate transactions include the following:
- Proper Pricing – Asymmetric pricing (lower of cost or market; higher of cost or market) is followed so the regulated utility ratepayers are not subsidizing unregulated affiliates.
- Cost Reasonableness – Charges for services provided to the regulated utility by an affiliate are in line with the cost of affiliate services paid by other regulated utilities.
- Necessity of Services – The services that affiliates provide are necessary and would be required even if the regulated utility were a stand-alone water utility.
- Regulatory Agreement Compliance – Affiliate transactions adhere to the orders of the regulated utility’s regulators.
- Appropriate Governance Practices – The regulated utility exercises proper control over affiliate services and charges. Such control mechanisms include board and management oversight, budget approval, plan versus actual reporting and analysis, invoice review and approval and service level monitoring.
Mr. Baryenbruch has developed benchmarking techniques to support his determination of the reasonableness of affiliate transactions. His benchmarking metrics facilitate the comparison of a client’s cost of services from affiliates to those provided by affiliates of other utility operating companies. Data employed in this analysis is publicly available thus can be subjected to examination by all parties to the regulatory proceeding.