On a matter before the Maine Public Utilities Commission, IIC, Inc. studied ridership patterns and rate structures to determine the competitive advantages realized by a large partially regulated ferry service provider vis-a-vis small tour and charter companies.
We worked with an extensive database containing ferry service trip logs to perform analyses that showed capacity utilization of a fleet of boats as well as the rates charged for ferry service compared with the rates charged for private tours and charters. We critiqued a cost allocation method and proposed alternative methods of allocating costs that more properly reflect the division of costs between the regulated and unregulated portions of the business to demonstrate that the large ferry company had an unfair competitive advantage in providing unregulated tour and charter service.

Deregulation has caused confusion over the role of a formerly regulated company's treatment of "non-core" assets that are used in competition with other companies.
IIC, Inc. has analyzed the proper treatment of such assets from a cost allocation and pricing perspective. We have found that companies frequently are not prepared to set up accounting systems to allocate costs on a distributed cost basis and consequent pricing in competitive (non-core) markets often penalizes other competing firms because such prices do not recover fully allocated costs. We have helped identify such situations involving a gas utility and also formulate reasonable cost allocation methodologies to ensure that costs are fully distributed and prices are not unfair or unreasonable to competing firms.

Regulation of oil and natural gas pipelines falls under the aegis of the Federal Regulatory Commission (FERC) and many rates and proposed rate increases are still justified based on traditional rate making cost of service analysis.
IIC, Inc. provides expert economic and financial analysis of pipeline rate-making methodologies, cost of service analysis, and evaluates the justification for market-based rates. Recently, IIC, Inc. has been instrumental in obtaining highly favorable settlements for several shippers involved in various rate proceedings before FERC by demonstrating that the rates being charged were unjust and unreasonable. IIC, Inc. has provided in-depth analysis of cost of service filings and associated cost allocation models, as well as detailed knowledge and understanding of the financial theory underlying these models.

Assessing the reasonableness of rates and whether shippers can ship on a non-discriminatory basis is a cornerstone of the Federal Energy Regulatory Commission's regulation of oil and gas pipelines.
Such work requires a thorough understanding of recent changes in ratemaking methodologies including Order 154, rate indexation, and market-based rates. IIC, Inc. has assisted a number of clients to determine whether rates being charged are fair and reasonable and whether other terms and conditions are appropriate. We have also consulted on the appropriate indexation method that FERC should use, and have also provided detailed assistance to FERC in its revamping of the Form 6 reporting requirements.