Suez water rhode island, inc. - RI Public Utilities Commission
Exhibit
Docket No._
SUEZ WATER RHODE ISLAND, INC.
V/AKEFIELD, RHODE ISLAND
RATE OF RETURN
DIRECT TESTIMONY
OF
HAROLD V/ALKER, III
DECEMBER 2017
Prepared by:
GANNETT FLEMING
VALUATION AND RATE CONSULTANTS, LLC
-s*lz-
E]
Valley Forge, Pennsylvania
TABLE OF CONTENTS
INTRODUCTION SUMMARY OF RECOMMENDATION ....... PRINCIPLES OF RATE REGULATION AND FAIR RATE OF RETURN ... INVESTMENT RISK.... DESCRIPTION OF SUEZ WATER RHODE ISLAND, INC. THE INDUSTRY.. COMPARABLE GROUP CAPITAL STRUCTURE ....... EMBEDDED COST RATE FINANCIAL ANALYSIS RISK ANALYSIS.. CAPITAL COST RATES COMMON EQUITY COST RATE ESTIMATE DISCOUNTED CASH FLOW CAPITAL ASSET PRICING MODEL... RISK PREMIUM SUMMARY OF COMMON EQUITY COST RATE..... OVERALL RATE OF RETURN RECOMMENDATION APPENDIX A.
1
I
J 4 5 6 9
t2 t6
T7
20
....... 33
.34 .44 .48 .53 .55 ............1
TERMS, ABBREVIATIONS AND ACRONYMS
Terms, Abbreviations and Acronyms
Deftred
CAPM
Conmrission
Corpany Conparable Conpanies Corrparable Group Cost ofCapital DCF
DPS EPA EPS Financial Risk GICS GO
IOU
[?verage Long- term U. S. Treasury Secr?rities
M/B Moody's
NARUC
Non-Systematic Risk PUC ROE RP S&P SIC SWR SWRI Systematic Risk Value Line Water Group
Capital Asset Pricing Model
Rhode Island Public Utility Conrnission
Suez Water Rhode Island, Inc.
Water Group Followed by Ana?ts
Water
Followed byAna?ts
Investor-required cost rate
Discounted Cash Flow
Dividend per share
U. S. Environmental Protection Agency' s
Eamings per share
L,everage
Global Industry Classification System
General Obligation Bonds
lnvestor Owned Utilitres
Fixed cost capital
Base Risk-Free Rate
Market-to-Book Ratios
Moody's Investors Service
National Association of Regulatory Utility Con?rnissioners
Conpany-Specific Risk
Rhode Island Public Utitty Conrnission
Return on Equity
Risk Premilnn
Standard & Poor's
Standard Industrial Classification
SUEZ Water Resornces Inc.
Suez'Water Rhode Island, lnc.
Non-Diversifiable Risk
Value Line Investment Swvey
'Water Group Followed byAna?ts
11
1
2 a.
A. 4
5 a.
6 A.
7
8 a.
9
10 A.
11
t2
13 a. t4 A.
15 T6 T7
l8 t9 a.
20 A.
2t
22 23
INTRODUCTION
PLEASE STATE YOUR NAME AND BUSINESS ADDRESS.
III. My name is Harold'Walker,
My business mailing address is P. O. Box 80794, Valley
Forge, Pennsylvania 19484.
BY WHOM ARE YOU EMPLOYED AND IN WHAT CAPACITY?
I am employed by Gannett Fleming Valuation and Rate Consultants, LLC as Manager,
Financial Studies.
WHAT IS YOUR EDUCATIONAL BACKGROUND AND EMPLOYMENT
EXPERIENCE?
My educational background, business experience and qualifications are provided in
Appendix A.
SCOPE OF TIMONY
WHAT IS THE PURPOSE OF YOUR TESTIMONY? The purpose of my testimony is to recommend an appropriate overall rate of return that Suez Water Rhode Island, Inc. ("SWRI" or the "Company") should be afforded an opportunity to eam on its water utility service rate base. My testimony is supported by
Exhibit HW-1, which is composed of 19 Schedules.
SUMMARY OF RECOMMENDATION
WHAT IS YOUR RECOMMENDED COST OF EQUITY? My recommendation is that the SWRI be permitted an overall rate of retum of 7.82o/o,
including al0.5o/o cost of common equity, based upon the Company's capital structure at
December 31,2017. My recommended cost of common equity reflects SWRI's unique
risk characteristics.
I
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related download
- commonwealth of kentucky kentucky public service
- are small investors naïve about incentives ulrike
- suez water rhode island inc ri public utilities commission
- prepared direct testimony of roger a sdge
- project number dzt 0701 stock market simulation an
- stock doc the pursuit of happiness innervisions
- sell side analysts and gender aqr capital management
- small cap research e qure
Related searches
- craigslist rhode island apartments
- rhode island craigslist
- rhode island tdi claim status
- rhode island disability form
- rhode island electrician license lookup
- rhode island department labor
- rhode island real estate license lookup
- rhode island holiday pay requirements
- rhode island holiday pay
- rhode island paid holidays 2020
- rhode island department of labor
- rhode island dlt 1099