Costing and Pricing in an Increasingly Competitive Environment Costing and pricing in today's increasingly competitive environment wherein the final product may consist of both deregulated and regulated inputs, frequently leads to unbundled rates and services. Foster Associates consultants provide assistance in the unbundling of rates and services and, where appropriate, in the preparation of supporting cost analyses. Fully allocated cost of service is used to determine the level of rates subject to regulation and as a point of departure for market- determined rates. Frequently, activity-based costing may be utilized as a test of reasonableness. Avoided costs are useful in assessing alternative supply sources and Integrated Resource Planning.
Pricing strategies can take many forms.
Options include product differentiation and market-penetration schemes designed to meet competition and maximize earnings. Since its founding in 1956, Foster Associates has specialized in the area of utility financial analysis, ranging from earnings regulation to corporate financial policy, with expert studies performed on behalf of individual gas, electric, and telecommunications companies, industry groups and regulatory agencies. Our studies typically take the form of expert testimony, which has been presented before numerous federal, state, and provincial regulators in the U.S. and Canada. These studies are characterized by in-depth risk analyses. More broadly, Foster Associates' work in the area of utility corporate finance ranges from determination of the optimal corporate structure and appropriate financing vehicles, to valuation of assets and business segments, to the design of risk-mitigating mechanisms.