VIS has authored a technical primer for NARUC on depreciation expense within electricity tariff regulation, as part of the USAID-supported Cost-Reflective Tariff Toolkit. The report provides a detailed framework for regulators to assess and apply depreciation methods that align with cost-reflective principles. It outlines asset valuation techniques, service life estimation, and grouping strategies, and compares depreciation rate-setting approaches including straight-line, accelerated, and deferred methods. The primer also evaluates the regulatory implications of depreciation decisions on tariff stability, investment incentives, and utility cash flow. Designed to support emerging market regulators, it equips stakeholders with tools to ensure transparency, economic efficiency, and intergenerational equity in tariff design.The primer is available at the link below.
https://pubs.naruc.org/pub.cfm?id=6ADEB9EF-1866-DAAC-99FB-DBB28B7DF4FB