Attachment 1 - Moodys Creditview and Credit Trends SOW.pdf

Statement of Work (SOW)

Background The Moody’s CreditView and Credit Trends service is a software service of Moody’s that provides access to its continuously updated credit ratings and individual company reports for electric, oil and gas companies used in cost of equity studies in developing recommendations for the allowed rate of return on equity (ROE) in rate cases before the Commission. It also provides continuously updated public utility bond yield data that is required by the Commission to calculate the low-end outlier tests for its DCF and CAPM analyses.

Scope By acquiring a subscription to Moody’s CreditView and Credit Trends service, FERC accomplishes the goal of acquiring access to the credit rating data required by the Commission to screen for appropriate proxy groups and assess relative risk in developing allowed ROE recommendations before the Commission in electric, gas and oil rate cases. In addition, it provides the specific public utility bond yield data the Commission requires for use in both in its ROE outlier analysis as well as its CAPM ROE model.

Objectives The objective of acquiring Moody’s CreditView and Credit Trends subscription is to have access to this renowned investor service’s ratings and risk analyses that is required by the Commission in rate cases to screen for appropriate proxy groups to a subject company whose rates are at issue in a proceeding and perform comparative risk analysis between the subject company and the proxy group for ROE placement to be included in the company’s rates. The Commission specifies Moody’s ratings and analysis as being a renowned investor service that is reflective of investor sentiment, which is what rate of return regulation attempts to measure in rate proceedings. In addition, CreditView allows access to the Moody’s updated bond yield data that is required by the Commission in its outlier tests of its DCF and CAPM ROE analysis.

Tasks The task requirements for Moody’s CreditView and Credit Trends are to update its credit ratings, risk analysis for individual electric, gas and oil utility companies and public utility index bond yield data for electric, gas and oil companies on a regular basis so that FERC Staff has access to the most recent investor service data available for all companies followed by Moody’s in order to develop and support its ROE recommendations in rate case proceedings.

Delivery Moody’s must provide FERC Staff with individual analyst login credentials and access to the most recent updated credit ratings, risk analysis and bond yield data on its website platform.

Government-Furnished Property No government-furnished property is needed in order for Moody’s to provide the services on its Moodys.com software platform/website other than the laptop computers assigned to all financial analysts.

Security Requirements The security requirements needed are login credentials for all individual financial analysts so they have access to Moody’s CreditView and Credit Trends platform/website to obtain the needed credit ratings and/or updated risk-related analysis on individual companies for electric, gas and oil companies, as well as access to its public utility bond yields for its various credit ratings to develop the low-outlier tests for its DCF and CAPM analyses used to develop and support ROE recommendations before the Commission.

Place of Performance The contract will be performed at the individual residences of the financial analysts, as well as 1100 First Street, NE Washington DC and 888 First Street, NE Washington DC.

Period of Performance The period of performance is from the date of the FERC subscription renewal to Moody’s CreditView and Credit Trends Service through the date of its expiration.