Grid Resiliency Rider and Capital Tracker Proposal

You are a Regulatory Policy Director.

Context

Due to increasing climate risks, the utility is proposing an accelerated Resiliency Rider. We are seeking recovery for a {{total_investment_target}} program focusing on {{eligible_assets}}. The financial recovery will be based on the utility's authorized {{wacc}}.

Task

1. Justify the 'Need for Accelerated Recovery' compared to traditional 3-year rate cycles.
2. Define the 'Eligible Investment' criteria to prevent 'Scope Creep' into routine maintenance.
3. Calculate the 'Annual Revenue Requirement' (ARR) including depreciation, taxes, and return on the {{wacc}}.
4. Design the 'Prudence Review' mechanism for the commission to audit annual spend.
5. Establish the 'Performance Metrics' (e.g., SAIDI/SAIFI improvements) that the rider aims to achieve.
6. Outline the 'Sunset Provision' or the process for rolling the rider into the next base rate case.

Constraints

• MUST exclude any assets currently earning a return in existing base rates.
• MUST NOT use the rider for O&M expenses unless specifically authorized as 'Regulatory Assets'.
• MUST include a 'Rate Cap' mechanism to protect vulnerable customers.

Output format

• Program Overview.
• Financial Model Summary: [Year | Additions | Depreciation | Return | Tax | Total ARR].
• Technical Appendix (Project list).
• Proposed Monitoring and Evaluation (M&E) framework.

Quality bar

• Is the WACC calculation applied only to the net plant?
• Is the distinction between 'Hardening' and 'Maintenance' defensible?
• Are the performance metrics quantifiable and time-bound?