Cost of Capital Testimony

We provide expert witness testimony on measuring the cost of capital, which is the return a regulated utility must pay its investors to raise debt and equity financing on reasonable terms and fulfill their obligation to provide reliable electric, gas and water The cost of debt is the interest rate the company must pay their bondholders. The cost of equity is the expected return investors demand to purchase shares and cannot be published like an interest rate on a bond. Instead, the cost of equity, often referred as return on equity (ROE) in utility rate case proceedings, must be calculated by applying financial models to published data such as the stock price, dividend yield and expected growth. The Discounted Cash Flow (DCF) method is widely used and often given a primary role in determining the ROE to set rates for a regulated utility company and calculating rates for transmission service.

The accurate calculation of the Cost of Capital balances the interests of consumers and investors and promotes the efficient allocation of resources. While our testimony is an impartial evaluation our analyses take into account commission policy, precedents, and established rules. Overall, we strive to ensure decision makers are adequately informed so as to represent the goals of their constituents as optimally as possible.

Rothschild Financial has testified in over 400 cases in the following states and territories:

|Alabama | Arizona | Connecticut | Colorado | Delaware | FERC | Florida | Georgia | Illinois | Kentucky | Maryland | Maine | Massachusetts | Minnesota | New Jersey |North Dakota|

|New York | Nova Scotia | Oklahoma | Oregon | Pennsylvania | Rhode Island | South Carolina | Vermont | Washington, DC | Washington|