Attachment 1 - US Economic Statement of Work.pdf

Statement of Work (SOW)

Background

As the Commission’s trial staff, the Office of Administrative Litigation (OAL) seeks to assist entities such as electric utilities, natural gas pipelines and petroleum products pipelines to resolve without litigation disputes regarding rates, terms and condition of service and related issues. Where such resolutions are not possible, OAL develops comprehensive evidentiary records in litigated cases to help assure just and reasonable rates, to promote competitive markets and to obtain other results consistent with the public interest. OAL seeks to settle or litigate cases in a timely, efficient, and equitable manner.

SOW Format: Scope

The OAL Technical Division uses IHS Markit’s US Economic Service Long Term & Capitol Cost subscription to maintain its access to data on past, current and forecasted economic and energy related data. Continued access to this information provided by IHS Markit is critical to performing our day to day duties as part of the Commission’s trial staff.

SOW Format: Objectives

The OAL analysts use this subscription to obtain economic and energy information. OAL financial analysts obtain economic data such as inflation rates and gross domestic product figures. This information is essential in determining nominal and real rate of return on equity figures used, for example, in oil pipeline cases set for hearing before the Commission. The financial analysts provide expert testimony before an administrative law judge on rate of return that is in Trial Staff’s cost of service used to support its recommended rates. OAL’s energy industry analysts use the subscription to read articles and obtain data on long-term economic forecasts, energy demand, resource availability in all the electric utility, natural gas pipeline and oil pipeline industries. The information is used, for example, to support forecasts on the demand for electricity, natural gas and oil pipeline throughput and reserves of natural gas and oil. The data is available by industry and region which enables the analysts to drill down specifically to the area of issue in a rate proceeding. Analysts use this information to determine depreciation rates, salvage rates, usage patterns in determining cost allocation and rate design, just to name a few.

The articles, economic and energy information from the subscription is also used to corroborate forecasts from other sources such as the Energy Information Administration and the US Bureau of Economic Analysis Survey of Current Business. Such corroboration is critical in developing well supported testimony before the Commission so that the Commission has a complete record to issue its opinion.

SOW Format: Tasks

The task requirements for IHS Markit, Inc. are to update economic and energy information to include inflation rates and gross domestic product figures so that OAL analysts can determine nominal and real rate of return on equity figures used in cases set for Commission hearing.

SOW Format: Delivery

US Economic Service:

• Connect access for all topics related to the long-term forecast analysis and the three alternative scenarios

• Semi-annual reports on the four scenarios

• Forecast Tables in Excel for each scenario (together and split by scenario)

• Long-Term U.S. Economic Outlook – PDF

• U.S. Executive Summary––PDF

• Long-Term Forecast Spreadsheets (Excel)

• Long-Term Forecast Banks (Aremos and Eviews)

• Data Browser access to all Long-Term (30-yr) Forecast data

• Print version of Long-Term U.S. Economic Outlook mailed to client

• Access to the U.S. Macro team

Capitol Cost Service:

• 10-year Forecasts of Key Inputs – Updated Quarterly

• 10-year commodity forecasts for key construction sector inputs (steel, energy, cement, copper)

• US Regional wages rates and analysis of supply for key skilled labor categories (welders, pipe-fitters, electricians, boilermakers) for 10 US Regions

• Quarterly forecast analysis – price, demand, and supply detail

• Analysis of the market fundamentals (next 6 months) and the 10-year outlook

• Online as well as quarterly print publication

• Monthly Updates on Commodity Prices

• Commodity Price Watch – provides analysis of price changes and the fundamentals driving key costs

These services also provide access to cost analysts, seminars, and webinars.

Custom forecasted indicators are provided upon request. IHS Global Inc provides access, search, and retrieval of its electronic databases and publications installed on its server at its facilities and made available through its search interface. The interface environment is HTML. The system is accessed, and search results are delivered via the Internet/Web. Access is controlled through passwords for individual users; each user must have their own unique username and password combination for access to subscription content.

SOW Format: Government-Furnished Property

No government-furnished property is needed in order for IHS Markit to provide the services on its US Economic Service Long Term & Capital Cost subscription website.

SOW Format: Security Requirements

The security requirements needed are login credentials for five (5) financial analysts so they have access to website to obtain economic forecasts.

SOW Format: Place of Performance

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

SOW Format: Period of Performance

The period of performance is from the date of the FERC subscription renewal commencing October 15, 2022, until all options are exhausted.